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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Courtesy of San Francisco, California-based fintech Prelim, community banks and credit unions will have new tools to connect with enabling technologies and systems to enhance their offerings to their customers and members. A specialist automating the customer experience for financial institutions of all sizes, Prelim has unveiled a new proprietary framework technology that, with a single line of code, will enable smaller FIs to connect their core systems with mobile and commercial banking, digital account opening, and treasury management solutions.
“We enable community FIs to more effectively compete in the marketplace by providing a modern, efficient customer journey by leveraging the easy-to-use API connectors,” Prelim founder and CEO Heang Chan said. In a statement, Chan highlighted the operational and resource challenges that most community banks and credit unions must overcome in order to provide the same high-level of digital customer service as their larger, more tech-savvy rivals. “By distilling system interfaces down to a single line of code, we are bringing a new level of accessibility, control, and convenience to financial institutions as they implement their digital roadmaps,” Chan explained.
Founded in 2017, Prelim has raised $2.1 million in seed funding from investors including S2 Capital, Fuel Capital, and Liquid 2 Ventures – as well as angel investor Max Altman and Flexport founder and CEO Ryan Petersen. A Y Combinator alum, Prelim unveiled enhanced digital account opening functionalities for business banking accounts in May, as well as a Status Center tool to make it easier for financial institutions to collect and manage business client data to facilitate pre-approvals and small business loan applications. The company unveiled its enhanced capabilities to support treasury origination and management services in June.
Prelim includes Pacific Western Bank, Climate First Bank, and Advantage Credit among its customers. The company says that some of the biggest banks in the country use its white-labeled, low-code/no-code technology to automate and enhance the digital experience.
From the renewed emphasis on contactless commerce to the promise of real-time payments, the business of facilitating transactions for goods and services is as hot a subsector of fintech as any other. To this end, we caught up with Jeff Kump, Head of Payments for recently rebranded CSG Forte, a unified payments platform based in Allen, Texas, to talk about innovations in payments, the power of enabling technologies, and the role played by companies like CSG Forte.
Since 2006, Kump has been tasked with leading and growing CSG Forte’s operational and cross-functional teams. Additionally, he has proven instrumental in advancing CSG Forte’s corporate development and growth strategy, serving as Forte’s COO and CFO before the company’s acquisition by CSG in 2018. During his tenure at Forte, the company was recognized by the Inc. 5000 as one of America’s Fastest Growing Companies for eight consecutive years. The company is an alum of our developers conference, FinDEVr, having hosted presentations on payment technology at events in 2014, 2015, and 2016.
What problem does CSG Forte solve and who does it solve it for?
Jeff Kump: To start, we offer one of the most complete and customizable payments solutions in the world, enabling companies to scale digital payments smarter and grow their business faster while also reducing costs.
Offered as a unified end-to-end payments platform, our technology was purposefully engineered to make it easy for companies and integrated software providers to set up, integrate, quickly adapt to changing needs and scale fast—because speed so often translates to success. We have done this by managing the entire payment lifecycle within a single platform, fueled by modern APIs and RESTful architecture that transforms their payments operations into a competitive business strategy.
This agile foundation has also helped us to succeed across hundreds of industries. It can be difficult to find a partner both competitive on price and legitimately equipped to provide the custom solutions necessary to succeed. Our team leverages deep yet specific channel expertise to support our customers’ verticals, including security, compliance, and integration.
Our unique approach to payments has enabled us to grow rapidly – outperforming larger competitors and transforming payments from an expense to a critical growth driver. From 2010 to 2018, Forte was, for example, listed on the Inc. 5000 list as one of America’s Fastest Growing Private Companies. Today, we work with over 70,000 merchants across hundreds of industries in North America.
What impact did the COVID-19 pandemic have on your business? What are some of the biggest takeaways from 2020?
Kump: When COVID hit, many companies were forced to transform how they interact and support their customers and employees. The pandemic also had a lasting impact on the payments industry, but maybe not in the way that many expected.
While contactless and mobile payments certainly received their fair share of attention, it was the rapid rally around electric payments that was critical to the success of social distancing, stay-at-home orders and bill payments. Merchants and governments across a range of verticals turned to CSG Forte to get smart in e-commerce – quickly enabling their websites to handle online orders, introducing store-specific apps that allow their customers to shop more easily from home or encouraging pay-by-phone.
We also saw a surge in self-service payments kiosks and anticipate this interest in these kiosks will increase for businesses and consumers alike who want to arm themselves against future emergencies, rely less on cash, and encourage social distancing habits post-pandemic. Kiosks are a flexible solution, offering a breadth of payment options to support both people using cash (including underbanked populations) and payers who prefer to avoid human interaction. Moving forward, you will see a rise in VR (Voice Response)-enabled and Conversational AI-enabled kiosks that minimize the number of times payers need to touch the screen or keypad.
Related to the rise of contactless payments, it has not all been hype. As consumers have returned to their normal in-person shopping habits, more and more merchants have turned to CSG Forte in the last year to put in place the point-of-sale infrastructure that supports contactless options and mobile pay.
Which of the main payment trends – digitalization, tokenization, contactless, the security/fraud challenge etc. – will have the most impact on payments in the near term? What will businesses need to do in order to successfully take advantage of these trends?
Kump: We think that digitalization is the most important trend for businesses to follow and act on right now – paving the way for the rise in virtual cards, contactless, and other payments advancements.
Reinforced by COVID, industries are shifting from paper methods to digital processes, and more transactions are taking place online. Digital payment solutions can improve security, accuracy, efficiency and profits, giving businesses a competitive advantage in a digital economy. For instance, ACH payments are more secure and considerably faster than paper checks, cost less to process, and leverage advanced technologies to protect against check fraud, data breaches, and identity theft.
The challenge of digitalization is addressing the security concerns it presents. With increasing digitalization, hackers gain more access to sensitive data, leaving individuals and enterprises vulnerable. Over half of U.S. merchants have faced a data breach at some point – in 2017, over 19% reported an incident. About 60% of consumers say they will actively avoid businesses that have experienced a recent data breach, especially when it involves credit card information.
With that in mind, businesses should invest in technologies such as End to End (E2E) encryption, EMV, and tokenization that can mitigate risk related to fraud and security breaches caused by bad actors. E2E encryption can be used alongside digital platforms that support point-of-sale (POS) transactions and IVR phone payments; the technology hides payment information and converts it into an unreadable code as it is transmitted across the payment network that is decrypted with a private key upon reaching the intended destination. Merchants who have POS devices that accept contactless payments are able to securely transmit payment data using EMV technology that works by generating a one-time transaction code. The code is unique to each purchase, eliminating the fraud risk of duplicate credit cards that often occurs with magstripe cards. Tokenization is used for eCommerce, recurring and automated transactions, and stored cardholder data. Tokens replace the payment data with a randomly generated code that can only be exchanged for real data by the payment processor that stores it. These are often used by merchants that offer automatic/recurring payments like subscription- or membership-based services. Tokens are easy to use and effective for the security they provide. Any cybercriminal that gets their hands on tokenized data will find it unreadable, as only payment processors can exchange tokens for real data, ensuring both external and internal protection.
Implementing secure technology such as E2E encryption and data tokenization can help protect businesses from enduring the negative and costly impact of fraud and data breaches that can also cause reputational harm to their brand. CSG Forte has several solutions that are out-of-box and/or easy to integrate and can reduce the scope and burden of managing PCI and Nacha compliance requirements. Businesses that do not have these protections in place should engage a trusted payment processor, such as CSG Forte, to assist with implementing these necessary security measures.
CSG Forte announced a partnership with CivicPlus this spring. This reflects one trend – government modernization – that was accelerated by the pandemic. Can you tell us more about the partnership, including how it came about?
Kump: Government modernization is a hot topic indeed. With many offices closed to the public in 2020 and into 2021, government agencies turned to CSG Forte to quickly evolve the way they do business. In response to sky-high demand, we doubled down on our partnerships and innovations that empower the government vertical in the last year – joining forces with CivicPlus, gWorks, SeamlessDocs, and Accela, to name a few. In 2020, we were also named a preferred partner by Nacha for Government Agency ACH Payment Gateways.
CivicPlus and our CSG Forte team have been bumping into each other for a couple of years now, having been involved in similar projects with local municipalities and state governments. After a few of these encounters, and one where we helped them to quickly get some new accounts deployed, the idea of a true partnership truly took root – and is what we announced this spring.
By partnering with CivicPlus, we can offer over 4,000 local governments a full end-to-end payments solution that accelerates the evolution of traditional payments services and meets the needs of today’s digital-savvy citizens while providing key capabilities needed to drive an industry-leading online payments experience. This includes:
Enhanced security: E2E encryption protects sensitive card data throughout the transaction lifecycle
Seamless payments: Secure, online payments received instantly through an intuitive, easy-to-use platform
Check processing with verification: Gives government agencies the ability to accept checks with confidence, providing checking account validation. Verification capabilities meet new requirements set forth by Nacha
Updated payment status: Automatically records the payments status to keep the system updated in real-time
What else can we expect from CSG Forte over the balance of 2021?
Kump: First off, we just rebranded the business. Previously known as Forte Payments Solutions, the holistic CSG Forte rebrand includes a new logo, website, and social pages that position CSG’s payments business for rapid growth into new regions and across the hundreds of verticals it serves.
As we look at innovation and product enhancements for the remainder of the year, our focus at CSG Forte is to simplify the customer experience and improve their journey. Consumers are increasingly interested in Apple Pay and Android Pay, among others, so we are enhancing our product roadmap to include digital wallet options for merchants. Additionally, we are transforming the way that we manage transaction monitoring to ensure a seamless processing experience for merchants.
Our customer-centric approach is also focused on developing solutions that minimize compliance burdens such as Nacha’s “Supplementing Fraud Detection Standard” mandate, which impacts many of our merchants who leverage ACH services, as well as accelerating value delivery to merchants by reducing onboarding time so they can begin processing transactions faster. We will continue to evolve our payments platform to align with the voice of the customer and ensure we are not only meeting but exceeding their expectations, making ordinary customer experiences extraordinary.
Jeff Kump is Head of Payments at CSG and leads the newly rebranded CSG Forte business, where he oversees go-to-market strategy and new opportunities in the global payments market. Kump previously served as Head of Operations for Forte, focusing on continuous business process improvement, risk and fraud management and providing an unparalleled customer experience.
London-based digital “super platform” Capitalise.com has raised $13.8 million (£10 million) to support a new, integrated risk management service to provide credit insights beyond traditional credit reports. Investors in the round include Experian, QED Investors, Gauss Ventures, Hambro Perks, and Post Finance.
Capitalise.com helps SMEs secure the financing they need in order to grow their business. The company leverages its accountant-as-adviser approach to ensure that small businesses access smarter, more appropriate funding sources and avoid the kind of short-term, ill-fitting financing solutions that often result in high rates and high fees.
Paul Surtees, company CEO and co-founder, pointed to the COVID pandemic as the impetus – at least in part – for the new offering. “Everybody has had to think differently during the pandemic, including us, so we created a virtuous circle in which SMEs and their advisors are shielded from risk and helped to grow.”
With its new risk management service, Capital Reports, Capitalise.com empowers accountants to defend their small business clients from potential and unforeseen risks to their client’s or their supplier’s credit positions. These risks may come in the form of potential defaults, or a company’s need or propensity to borrow, and gives them real-time access to a curated panel of both mainstream and alternative lenders. The service, available as both a paid and a free subscription and powered by credit data from Experian, will be available to approximately 500,000 small businesses through their accountant partners. Capitalise.com stated that an additional 500,000 SMEs will be able to access Capital Reports via API and Open Banking partnerships.
“Managing credit risk is central to lender activity but SME owners typically overlook it,” Capitalise.com co-founder and Chief Product Officer Ollie Maitlaind explained. “This restricts their growth and jeopardizes their survival.” He emphasized the fragility of supply chains as exposed by the global health crisis and noted that, as businesses emerge from the worst of the pandemic, “their ability to recover and protect capital … will be crucial.” Maitlaind added that upon successful launch in the U.K., Capitalise.com plans to bring the service to the South African market later this year “with more countries to follow.”
Founded in 2014, Capitalise.com made its Finovate debut two years later at our fintech conference in London. The company’s total equity funding now stands at more than $18 million.
A collaboration announced late last week between a pair of Finovate alums will give small businesses new options when it comes to digital receipt and expense management.
Toronto, Ontario, Canada’s Sensibill, which won Best of Show for its FinovateFall demo of its digital receipt insights solution, has partnered with FreeAgent. The U.K.-based cloud accounting software company will combine Sensibill’s technology within its own new Auto Extract feature to help SMEs transition from manual expense management and receipt tracking to a modern, automated process.
“By joining forces with FreeAgent, we’re eliminating the time and money businesses have traditionally spent manually entering data into clunky and cumbersome spreadsheets and systems,” Sensibill Chief Technology Officer Danny Piangerelli said. “Instead, we’re delivering item-level details that enable faster, better expense management.”
Sensibill’s customer data platform blends ethically sourced, enriched SKU-level data with real-time, actionable insights to help FIs achieve personalization at scale. Integrated into FreeAgent’s Auto Extract technology, the technology enables businesses to capture, organize, and categorize their receipts digitally and accurately link them with corresponding bank transactions.
“Automation is at the center of our business,” FreeAgent co-founder and CEO Roan Lavery said, “which is why partnering with Sensibill was a natural choice.” Lavery added the collaboration will help increase satisfaction and engagement among customers while relieving SMEs and their accounting team from the “administrative hassles,” costs, and inaccuracies that plague most manual, expense management processes.
Founded in 2007 and making its Finovate debut in Europe in 2013, FreeAgent was acquired by NatWest five years later for $73 million (£53 million). The company currently has more than 110,000 small businesses, freelancers, and contractors in the U.K. using its technology for a variety of key business tasks – from invoice and expense management to project management and sales tax calculation.
With more than 60 million users across 150+ financial institutions in Canada, the U.S. and the U.K., Sensibill was founded in 2013 and has raised more than $50 million in equity capital. Founded by current CEO Corey Gross, the company has forged partnerships this year with fellow fintech CAARY, as well as with Maryland-based SkyPoint Federal Credit Union ($182 million in assets) and AbbyBank, a full-service community bank based in Wisconsin with assets of $616 million.
Recent news headlines have underscored the long-standing relationship between fintechs in India and the UAE.
This week, we learned that Indian payment solution provider PayMate has teamed up with both Visa and Citi to automate business payments in the UAE. The collaboration will involve both accounts payables and receivables, enabling institutions to benefit from end-to-end payment automation.
Access to PayMate’s platform also will give corporations in the UAE the ability to take advantage of longer Days Payable Outstanding (DPO) as purchasers, as well as make supplier payments earlier. The platform, which auto-reconciles both made and received payments in real-time, also allows for settling of corporate card payments directly into the accounts of suppliers.
A Visa-certified Business Payment Solution Provider (BPSP), PayMate is looking to leverage its relationship with Visa into offering both its platform and working capital solutions to other countries in the region. More than 105,000 Indian businesses currently use the PayMate platform.
Also this week we learned of that a partnership between the National Payment Corporation of India (NPCI) and UAE-based Mashreq Bank will bring Unified Payments Interface (UPI) to the UAE to support Indian business and leisure travelers to the country.
Unified Payments Interface is an instant, real-time payment system launched by NPCI that enables multiple accounts to be controlled via a single mobile app. The solution supports a wide range of banking features ranging from money transfers to bill sharing and billpay to merchant payments. Introduced in 2016, UPI currently facilitates 10% of all retail payments in India, and has more than 100 million monthly active users in the country. Last year, $457 billion in value moved on the UPI platform, and analysts believe that UPI will top both Visa and Mastercard in India by 2023.
And while bringing UPI to the UAE will be a major boon for Indian travelers and expats in the country, the UAE stands to benefit as well from the support that additional digital payment activity will provide to the UAE’s digital payments ecosystem.
“We are delighted to collaborate with NIPL (NPCI International Payments) to introduce their mobile-based real-time payment systems to our customers in the UAE,” EVP and Head of Payments for Mashreq Bank Kartik Taneja said. “Given the position of UAE as an international commerce and tourism hub, retail merchants in the Emirates always enable the latest payment methods that are expected by our international clients.”
It is worth pointing out that Indians represent the largest expatriate community in the United Arab Emirates, its more than 3.4 million members representing more than 38% of the UAE population. And while this is no surprise to anyone who has visited the UAE, the impact of this sizable population on the fintech industries of both nations is notable. In the summer of 2019, the Dubai Startup Hub, a project of the Dubai Chamber of Commerce and Industry, announced its intention to “woo” Indian fintechs to the UAE with a $100 million fund for financial services startups.
Underscoring Dubai’s role as a “testbed” for enabling technologies like blockchain and AI,” Manager of the Entrepreneurship Department at the Dubai Chamber of Commerce Natalia Sycheva noted that Indian startups represented more than 30% of the total start-up community in the country. “When we decided to launch the programme of attracting overseas start-ups here,” Sycheva said, “naturally the first choice was India, as 30% co-founders of our Dubai Startup Hub have Indian origin.”
Here is our look at fintech innovation around the world.
What have the companies that have won Best of Show at FinovateFall in recent years been up to since receiving top honors from our Finovate audiences?
With FinovateFall 2021 right around the corner, we thought now would be an excellent time to check in with some of the celebrated alums from our most recent autumn events.
2020
Q2, which won Best of Show honors at FinovateFall 2020 for its online digital marketplace that enables collaboration between fintechs and financial institutions, acquired fellow Finovate alum ClickSWITCH in April of this year.
Also in April, FinovateFall 2020 Best of Show winner Monit secured $5.2 million in seed funding for its finance app that gives small business owners insights and personalized guidance to help them manage their businesses better. The round was led by TTV Capital.
Lendsmart secured pre-seed funding in a round led by INV Fintech in February. The investment came after the company earned a Best of Show award at FinovateFall 2020 for a demo of its AI-driven technology that brings automation and transparency to the lending process.
2019
Zogo, which leverages partnerships with financial institutions to promote financial literacy among the young, raised an undisclosed sum a little over a year after making its Best of Show winning appearance at FinovateFall 2019.
Winning Best of Show in its FinovateFall debut in 2019, digital charitable giving platform Pinkaloo was acquired by philanthropic services firm RenPSG in the spring of 2021.
Multiple-time Best of Show winner MX, which picked up its latest Best of Show trophy at FinovateFall 2019, secured $300 million in Series C funding in January of this year, driving its valuation to $1.9 billion.
Digital customer service innovator Glia, another company that has earned multiple Best of Show trophies from Finovate audiences – including at FinovateFall 2019, raised $78 million in January of this year.
Cinchy not only raised $10 million in Series A funding after a Best of Show winning demo of its data collaboration platform at FinovateFall the previous autumn. The Canada-based company also secured an additional $10 million in funding in May of this year, as well.
2018
White-label digital banking solution provider Meniga, which picked up a Best of Show award at FinovateFall 2018, secured a $11.8 million investment this spring in a round led by Velocity Capita and Frumtak Ventures.
In a Series A round led by Canaan Partners, Bumped raised $10.4 million in new funding last November. Earning a Best of Show award in its debut at FinovateFall in 2018, the company enables brands to give their customers free stock for their purchases, turning shoppers into shareholders.
FinovateFall returns to New York City next month, September 13 through 15. To get your ticket and save your spot, visit our FinovateFall hub today. Register by September 3rd to save up to 12% off your ticket.
Moven’s platform is powered by core processing technology from fellow Finovate alum Q2. CorePro, as the technology is named, will give these community banks the ability to build a solution with a front-end based on financial wellness and a backend able to interact with a variety of legacy core systems.
Keith Mansfield, Chief Operating Officer with the Louisiana-based b1 BANK, underscored how the partnership with Moven will enable the institution to offer its customers new tools to enhance their financial wellness. Mansfield added that working with Moven will also help the $3.9 billion AUM bank gain the kind of customer insights that will enable it to “compete with both larger banks and fintech competitors.”
Citizens Bank of Edmond ($350 million in assets) CEO and President Jill Castilla was even more direct, highlighting both the importance of “deliver(ing) exceptional products and exceptional customer service in an increasingly digital manner” as well as the key role that community banks play in the financial lives of a sizable number of individuals and families.
“No one is more skilled at developing relationships and meeting customer needs than community banks,” Castilla explained. She praised both Moven and Q2 as companies that not only understood this reality but also were “committed to bringing a first-class digital experience to underbanked and underserved communities in need.”
The initiative announced this week is not the first time Moven and Q2 have collaborated. Most recently, in the fall of 2020, the two companies teamed up to offer a turn-key digital bank-in-a-box that can be deployed by financial institutions in as few as 30 days. Combining financial data aggregation and savings tools from Moven with Q2’s CorePro cloud processing technology, the new offering provides real-time alerts and notifications, the ability to issue savings and demand deposit accounts, as well as instant external account verification, wishlist savings, and an emergency account.
“Community financial institutions are frustrated with their legacy core provider(s) and want flexibility and affordability in delivering solutions that empower the consumer,” said Bryan Clagett, industry expert and advisor who helped bring Moven and Q2 together for the project. “Digital banking, as we know it, is evolving quickly and bringing together fintech organizations that have complementary competencies is key to the future of the financial services industry.”
Courtesy of Blackhawk Network, championship-winning professional athletes aren’t the only ones headed to Disneyland. The branded payments solution provider announced late last week that it is leveraging its proprietary ScanIt solution to power retail ticket purchases using QR codes. Moreover, among the first customers of this new offering is none other than Disneyland, which will offer QR code ticket sales in major retailers throughout the state of California.
“Shoppers’ comfort with QR codes exploded in the last year,” Helena Mao, VP of global product strategy at Blackhawk explained. “Now, as consumers return to in-person entertainment, we are pleased to continue the innovation around QR codes with the introduction of entertainment and amusement park ticketing.”
Amusement parks are only one use case of Blackhawk’s technology. The company’s solutions can also be applied to other experiences that have historically relied on paper tickets, such as music concerts, museums, zoos, and other forms of live entertainment. Contactless, QR code-based payments also support the public’s growing preference for purchasing goods and services in the analog world the same way that they do in the digital world. Research conducted by Blackhawk, for example, suggests that 73% of consumers surveyed would prefer “online” payment methods – even when shopping “in-store.”
“Our technology affords retailers the luxury of a content selection that is no longer hindered by physical space,” Mao added. “And it gives shoppers access to a broader selection of digital content, such as e-tickets and digital gift cards, within a convenient purchase experience.”
To this end, Blackhawk Network has spent 2021 forging partnerships with a variety of companies. This year, the firm has teamed up with eGifting company Givingli, supermarket Tops Friendly Markets, digital asset marketplace Bakkt, and apparel retailer UNTUCKit. Most recently, technology from Blackhawk Network has been deployed to enable both PayPal and Venmo bring additional digital payment options to leading supermarket retailer Giant Eagle.
Blackhawk Network was founded in 2001, and has been a Finovate alum for almost ten years. A publicly traded entity on the NASDAQ – under the ticker “HAWK” – Blackhawk Network has a market capitalization of $2.5 billion. This year has featured a number of C-suite changes for the Pleasanton, California-based company, appointing former Google executive Nikhil Sathe as Chief Technology Officer in February, Cory Gaines as Chief Product Officer in May, and David McLaughlin as Chief Financial Officer in June.
Ramp’s 5-in-1 approach to enterprise spending management offers zero-fee corporate cards, accounting automation, billpay (including invoices, approvals, and payments), as well as expense management and real-time reporting that delivers insights that can be key to uncovering further savings opportunities. The platform offers automated expense reporting that includes collection and verification of more than 90% of receipts, and smart-rule powered automated reconciliation which, along with multi-entity and custom field support, enables accounting teams to close books up to 86% faster. Ramp integrates out-of-the-box with more than 100 different accounting, productivity, and security software packages from QuickBooks and Xero, to Slack and 1Password, to Google Suite and Okta.
According to company co-founder and CEO Eric Glyman, Ramp customers are saving 3.3% on average after switching to Ramp. This comes courtesy of a combination of savings insights, real-time spend reporting, and a 1.5% cashback policy. “This is tangible money saved that customers are reinvesting into activities that actually grow their business,” he said.
In addition to its funding announcement, Ramp also announced an acquisition. The company purchased “negotiation-as-a-service” platform Buyer which helps facilitate big-dollar business costs such as annual software contracts. The acquisition was the first for Ramp, which was founded in the spring of 2019; terms of the transaction were not immediately disclosed.
In a blog post at the Ramp website, Glyman noted that the funding raised, as important as it is, was not “the main news.” Instead, Glyman underscored the value of the financing automation platform Ramp is building, a platform that will help business save “even more time and money that we’ve done to date.” Glyman added that this will enable the company to move from providing savings insights based on the past to instead being “able to proactively save you money before you spend.” Everything from helping companies save money on travel expenses to enabling them to keep software costs low are on Ramp’s radar.
There were many lessons drawn from the economic response to the COVID pandemic in 2020. Among them was the role that digital technology can play in helping facilitate financial assistance to small businesses coping with lockdowns, quarantines, and a workforce wary of exposure to a deadly virus.
As many of our worst concerns about COVID-19 have begun to subside and economies have started to return to something approximating normalcy, the drive to make financing easier for individuals and small business remains an important part of a financial inclusion conversation that predates the pandemic. This is one of the reasons why we should expect to see more partnerships like the one announced today between Texas-based Cooperative Teachers Credit Union and AI-powered credit decisioning platform provider Scienaptic.
Courtesy of the new partnership, Cooperative Teachers Credit Union (CTCU) will be able to make faster, more accurate credit decisions for its members, as well as offer a range of additional financial options to them. Founded in 1953 “by teachers and for teachers,” CTCU currently serves more than 7,000 members and their families in East Texas and has more than $124 million in assets.
“Through the years, CTCU has grown in assets, in members, and in offerings,” the credit union’s president and CEO Tim Miller said. “We are excited to partner with Scienaptic and build upon this growth by tapping its AI-powered credit decisioning platform. Scienaptic’s AI will enable us to offer enhanced credit access to our members and improve their financial well-being.”
New York-based Scienaptic helps banks and credit unions move beyond outdated credit decisioning tools such as credit algorithms and traditional underwriting technologies that provide financial institutions with high credit loss rates and a subpar experience for potential borrowers. In contrast, Scienaptic drives traditional and alternative data through a powerful, preconfigured predictor library and explainable AI models to deliver more informed “yes/no” credit decisions, more accurate credit scoring and pricing, as well as more appropriate credit line levels for consumers. A boon for both credit underwriting and SME lending, Scienaptic’s platform is available as a hosted SaaS offering to keep capex costs low for its clients.
“By leveraging Scienaptic’s AI enhanced decision-making capabilities,” Scienaptic President Pankaj Jain said, “CTCU is positioned to create more approvals faster and strengthen member relationships, all while delivering an exceptional customer experience without increasing risk.”
The collaboration with CTCU is only the latest partnership Scienaptic has forged in recent weeks. In the month of August alone, the credit decisioning platform provider announced teaming up with automobile financing specialist Right Decision Financial Services, Oregon’s InRoads Credit Union, and the 140,000+ member Credit Union of Colorado.
For many, the economic inequality and low financial literacy that plague a country like South Africa are reasons to look elsewhere for fintech opportunities. But for New York-based Wahed, these same features are reason for not only optimism, but for investment and expansion.
The company, parent firm of a leading halal financial investment platform, announced this week that it has been granted a new regulatory license from the Financial Sector Conduct Authority (FSCA), South Africa’s financial markets regulator. The license will enable Wahed to launch its investment app in the sub-Saharan nation, making it easier for South Africans to grow their finances in a manner consistent with their cultural preferences and values.
“We are looking forward to making an impact in South Africa,” Wahed CEO Junaid Wahedna said. “We know we can help bridge the wealth divide in South Africa through our products. We combine fintech and values to create simple, accessible, and halal products – we are honored to be trusted and to launch in South Africa.”
With more than 200,000 customers in the nine different jurisdictions around the world, Wahed brings affordable and accessible investing to populations that are often overlooked and unable to use traditional investment solutions. The company enables individuals and families to invest in stocks and sukuks (Islamic bonds) – as well as in real estate and gold. Wahed offers free portfolio recommendations and the ability to invest in multiple accounts that may represent different investment goals – from saving for higher education to buying a first home. And with low, $100 account minimums, Wahed’s portfolios offer diversification among asset classes; efficiency and low cost; and optimization using modern portfolio theory to maximize returns based on the customer’s risk profile
Founded in 2015 and going live in the U.S. and the U.K. two and three years later, respectively, Wahed launched the first ever Halal equity ETF in 2019. By 2020, the company had topped more than 100,000 customers around the world. With its arrival in South Africa, Wahed looks forward to being able to serve the more than 446 million Muslims and others on the continent who need investment opportunities that are consistent with their faith and values.
“We are delighted to provide financial products that put the customer first,” General Manager for Wahed in South Africa Rashaad Kalla said. “South Africa has a thriving fintech ecosystem, an established banking sector, and a population that is hungry to reap the benefits of a new and better way to invest.”
Wahed has raised $40 million in funding from investors including Saudi Aramco Entrepreneurship Ventures, Rasameel Investment Company, Dubai Cultiv8, BECO Capital, and Cue Ball. In June, the company announced new U.K. General Manager Umer Suleman.
Here is our look at fintech innovation around the world.
Also participating in the Series B were Obvious Ventures, Foundation Capital, and Core Innovation Capital.
One is designed to help middle class families and individuals better manage their finances – without spending money on fees or requiring minimum balances. The company offers a high-yield savings account with a 1.00% APY, free ACH bank transfers, access to 55,000 no-fee Allpoint ATMs, and early access to earned wages when enrolled in direct deposit. One’s Pockets feature helps middle class families better organize their finances and pay bills by managing their money in Spend, Save, and Auto-Save categories. The latter Auto-Save category enables One accountholders to earn 3.00% APY on up to 10% of their direct deposit amount up to $1,000 per month.
“Stretched middle-income households and working families deal with financial stress on a daily basis and are largely unsupported by current offerings,” One CEO Brian Hamilton explained. “Every day we are marching towards changing this landscape to better serve customers and challenge the antiquated practices and uncompetitive pricing of traditional banking products. One offers features that can make a lasting financial impact for hard working people.”
In addition to helping accountholders better manage the money they make and save, One also offers tools such as its Credit Builder solution to enable them to improve their ability to secure affordable financing. Credit Builder allows accountholders to automatically build (or rebuild) their credit scores every time they use their One card. After linking their card to their Credit Builder Pocket, accountholders will automatically have money subtracted from their Credit Builder Pocket’s available balance and have those funds held back in order to make a complete, on-time and in-full payment to cover the cost of the transaction. As these payments are reported to primary credit bureaus, the account holder benefits from the positive impact the consistent, on-time payments have on their credit score.
Accountholders who are not eligible for Credit Builder can take advantage of One’s Credit Line offering. The Credit Line offering gives accountholders a low-cost, flexible financing option with a monthly grace period before interest (1% per month or 12% APR) is owed.
One was founded by Hamilton and former Intuit and PayPal CEO Bill Harris, who was also the founding CEO of Personal Capital. The company’s banking services are provided courtesy of Coastal Community Bank, an FDIC institution. One claims that its accountholders have saved more than $2 million via its auto-saving feature since the company’s launch.
