• Pinwheel is integrating its technology into digital banking solution Lumin Digital.
• Under the partnership, Lumin will leverage Pinwheel’s Prime and Verify tools that will offer a deposit switching solution and verified income and employment information, respectively.
• Lumin expects the move will improve both account activation and acquisition ROI for its financial services clients.

Payroll data connectivity platform Pinwheel announced today it is integrating its technology into digital banking solution Lumin Digital.

Pinwheel will help Lumin bring its financial institution clients frictionless account activation technology. By adding Pinwheel’s deposit-switching solutions, Lumin expects it will improve both account activation and acquisition ROI.

“This partnership provides our customers options for deposit switching solutions and is paramount to helping them achieve their goals,” said Lumin Chief Product Officer Sean Weadock. “Pinwheel is advancing their market in terms of ease, coverage, and security.”

Under the partnership, Lumin will leverage Pinwheel Prime and Verify. Pinwheel Prime is Pinwheel’s two-click deposit switching solution, which digitizes the direct deposit switching process to provide real-time insights into customers’ income. This increased visibility into customer data helps financial institutions form deeper relationships and increase the customer lifetime value.

Pinwheel’s Verify product allows financial institutions to improve their underwriting processes by accessing their customers’ verified income and employment information. Because Pinwheel is a Consumer Reporting Agency (CRA), financial institutions can legally use the income and employment data for credit decisioning.

“Between traditional financial institutions and neobanks, consumers have many choices, so we want to help banks and credit unions make their deposit switching process for customers as easy as possible,” said Pinwheel Partnerships Lead Brian Karimi-Pashaki. “In a recent survey, we discovered that 72% of consumers say they would be more likely to make a bank their prime bank if it offered Pinwheel Prime at acquisition, which is reason enough to want to get our technology into the hands of as many financial institutions as possible.”

New York-based Pinwheel was founded in 2018 and in addition to its Prime and Verify products also offers Earnings Stream, an early wage access tool; Taxes, a tool to help retrieve and assess customers’ tax forms; Digital, which offers third party companies digital payroll connectivity solutions; and Smart Branch, a tool to deliver Pinwheel’s digital payroll data connectivity solutions in-branch. Pinwheel helps third party apps connect to over 1.5 million employers using over 1,800 platforms, which cover up to 100% of U.S. workers paid via direct deposit. With more than $77 million in funding, the company counts Block, Citizens Bank, Acorns, Credit Karma, and others among its clients.

Founded in 2016, California-based Lumin has integration, referral, and reseller partnerships with multiple, major financial services players, including Larky, Constant, Glia, Envestnet, Paymentus, Jack Henry, Atomic, BioCatch, and others.

Photo by Skye Studios on Unsplash

• Quantexa is launching its Q Assist technology suite to augment decision-making among its clients and employees.
• HSBC announced it is an early adopter of Q Assist and will pilot the technology as part of Quantexa’s Lighthouse Program.
• BNY Mellon is also currently evaluating joining the Lighthouse Program.

Decision intelligence solutions company Quantexa announced today that HSBC has selected its newly launched Q Assist, a technology suite to help organizations augment decision-making among frontline and information workers. 

The Q Assist Technology Suite helps clients leverage context aware generative AI without having to invest much in infrastructure, tooling, or add skilled human resources. Specifically, employees can tap into copilots, linked data, Quantexa’s knowledge graph capability, and more to enhance the accuracy and reliability of generative AI models. The Technology Suite is comprised of an integration layer that serves as a framework of tools, connectors, and APIs that link Quantexa’s Decision Intelligence Platform with LLMs and conversational AI systems; a prompt management and sharing capability that integrates with external prompt tools and frameworks; and a copilot that allows users to query large and disparate data via a natural language interface.

Along with the launch of Q Assist, Quantexa also unveiled its Lighthouse Program for early adopters. “Quantexa’s engineering principle of shaping solutions to deliver maximum customer value has allowed our clients to play an integral role in helping to shape the product requirements for Q Assist,” said Quantexa CTO Jamie Hutton. “Through the company’s Lighthouse Program for early adopters, we have the benefit of working with industry leaders that provide valuable feedback throughout our roadmap process.”

HSBC is participating in the Quantexa Lighthouse Program, making the firm an early adopter of Q Assist. The technology suite will help HSBC streamline the processes of analysis, investigation, and reporting for its knowledge workers; reduce the firm’s reliance on data science and operations teams; offer its customer facing teams access to enriched data and insights in order to improve the customer experience; and enable teams to accelerate the decision-making process while improving traceability of decisions. HSBC anticipates that, within the first year of deploying Q Assist, the technology will help democratize analytics and accelerate processes, ultimately leading to productivity gains.

“This new solution has the potential to enhance the efficiency and accuracy of complex tasks such as anti-money laundering investigations and sales strategies by providing trusted data and contextual analytics,” said HSBC Global Chief Operating Officer of Commercial Banking David Rice. “The introduction of contextual analytics and innovation will enable HSBC to concentrate our resources more productively and ultimately help our customers.”

Quantexa noted that BNY Mellon is also currently evaluating joining the Lighthouse Program. “The next phase in our innovation efforts will see us exploring the potential of enabling frontline workers across the bank to use Gen AI to act on the data insights confidently and reach new levels of efficiency in the process,” said BNY Mellon, Cheif Data Officer Eric Hirschhorn.

Quantexa expects to make Q Assist available publicly outside of its Lighthouse program by early 2025.

Photo by Google DeepMind

• The U.S. Small Business Administration plans to issue a new SBA loan option for small businesses.
• The new pilot program will extend lines of credit of up to $5 million and will charge an annual fee and a maximum interest rate that is 3% to 6.5% higher than the prime rate.
• Lenders will receive a 75% guaranty on loans larger than $150,000 and an 85% guaranty on loans smaller than $150,000.

The U.S. Small Business Administration (SBA) announced plans this week to issue a new government-backed SBA loan option for small businesses. SBA Administrator Isabel Casillas Guzman unveiled the news in an interview with CNBC, which broke the news.

The new pilot program, which will extend lines of credit of up to $5 million, will allow business owners to either fund specific projects or borrow against their assets. Borrowers will be charged an annual fee and will face maximum interest rates that are 3% to 6.5% higher than the prime rate, topping out at around 12% to 15%.

The new loans aim to bring more compelling offers to both lenders and borrowers than the SBA’s existing 7(a) loan program. The 7(a) loan program incentivized lenders to loan to small business owners by providing guaranties to the lenders. Last year, the program backed 57,000 loans valued at $27.5 billion.

And even though the loan amount represents a 7% increase from 2022 levels, Guzman expressed that the growth is less than ideal. The same is true for two other SBA products, the SBA Express loan, which offers up to a $500,000 line of credit, and the CapLines loan product, which didn’t appeal much to lenders because of its complicated structure.

“This product is our aim to increase access to a simpler working capital line,” Guzman told CNBC. “It basically takes the best of our various options to create a pilot program to see if we can get more borrowers an affordable working capital line, versus just a pure reliance on credit cards.”

Lenders may find the new loans especially appealing, as they limit risk. Lenders receive a 75% guaranty on loans larger than $150,000 and an 85% guaranty on loans smaller than $150,000. “In an environment of higher interest rates, we want to make sure that the SBA is an option for more businesses,” Guzman said in the CNBC interview.

The SBA’s new working capital offering may impact the competitive landscape. Fintechs and traditional banks have provided lines of credit and working capital solutions with varying degrees of accessibility and interest rates for a long time. However, the SBA’s new government-backed line of credit promises accessibility and affordability for the borrower, as well as a 75% to 85% guaranty for the lender. While fintechs often attract small businesses with their quick approval processes and attractive user interfaces, they can come with higher interest rates and less favorable terms compared to traditional banks. Banks, on the other hand, offer more stable and lower interest rates but have rigid credit requirements and slower processing times. The SBA’s new program, which will go live “in the coming months,” will help bridge these gaps.

Photo by Amina Filkins