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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Splitit partnered with Alipay to power the firm’s Pay After Delivery payment option.
Splitit is leveraging Checkout.com’s payment-acquiring capabilities to facilitate Alipay’s Pay After Delivery.
Splitit was founded in 2012 as PayItSimple. The company rebranded in 2015 under its current name.
Installments-as-a-service company Splititannounced a new tie-up with global payments platform Alipay this week. Under the partnership, Splitit will power Alibaba Group-owned AliExpress’ Pay After Delivery.
The new payment option enables shoppers to pay after delivery using their existing credit card. Pay After Delivery leverages Splitit’s Installments-as-a-Service platform that embeds a branded experience within AliExpress’ checkout flow.
Splitit, which leverages Checkout.com’s payment-acquiring capabilities to offer the new installment service, was founded in 2012 as PayItSimple. Splitit’s Installments-as-a-Service tool is similar to well-known buy now, pay later (BNPL) technologies in that it enables consumers to pay for a good or a service in installments, interest-free.
Splitit’s tool differentiates itself from BNPL, however, because it is completely white-labeled and offers customers a merchant-branded experience. Because of this, during the checkout flow, customers are not redirected to a third party. What’s more, because Splitit relies on a consumer’s existing credit card, the company does not require additional credit checks. All of this results in less friction for the customer and better control over customer relationships for the merchant.
“Our work with Alipay is a testament to the flexibility of Splitit’s platform and the strength of our new partnership with Checkout.com. Together we are providing a valuable resource for sellers and shoppers by powering payment after delivery,” said Splitit CEO Nandan Sheth. “We are thrilled to collaborate with two exemplary companies like Alipay and Checkout.com. I look forward to building on this initial launch by expanding into other markets in the future.”
Splitit is based in Atlanta with offices in London and Australia, as well as an R&D center in Israel. The company is listed on the Australian Securities Exchange (ASX) under ticker code SPT and also trades on the US OTCQX under ticker SPTTY and STTTF. Splitit has partnered with both Stripe and Shopify in recent years to act as an installments-as-a-service option for their merchant clients.
PayPal-owned Xoom has added international money transfers to its Debit Card Deposit product.
Leveraging a partnership with Visa, U.S. users can send funds directly to recipients’ eligible Visa debit cards.
Debit Card Deposit originally launched domestic transfers in 2020.
PayPal’s international money transfer service Xoomadded a new debit card feature today that will help users send money across international borders. Leveraging a partnership with Visa, Xoom’s Debit Card Deposit product now facilitates international money transfers.
Debit Card Deposit originally launched in 2020 to allow customers to send funds within the U.S. Today’s addition will enable Xoom customers in the U.S. to use the Xoom mobile app or web interface to send money across the international border directly to friends or family using their debit card. Recipients, who will receive the funds on their eligible Visa debit card, will be able to access the funds in real-time.
“We know that getting funds quickly and easily is important for many of our customers, which is especially true around the winter months and the holidays when people are sending money to their friends and family around the globe,” said PayPal Vice President of Remittances Wei-Lin Lee. “This expansion, through our partnership with Visa, will help more customers around the world get a fast and convenient way to access necessary funds needed for everyday essentials.”
Funds can be sent to 25 countries, including Bosnia and Herzegovina, Bulgaria, Costa Rica, Croatia, Czech Republic, Great Britain, Greece, Guatemala, Hungary, Indonesia, Israel, Italy, Jamaica, Lithuania, Malaysia, Pakistan, Philippines, Romania, Singapore, Slovakia, Spain, Sri Lanka, Thailand, Ukraine, and Vietnam. Xoom will add more regions later this year.
Xoom was founded in 2001 and was acquired by PayPal in November of 2015 for $890 million. The company enables peer-to-peer money transfers that can be sent directly to the recipient’s bank account or debit card. Recipients also have the option to pick up physical cash at brick-and-mortar partner locations or receive the cash at their doorstep via a delivery.
Payroll and compliance company Deel is acquiring digital governance platform Capbase.
Terms of the deal were not disclosed.
Deel will leverage Capbase’s expertise to launch a new product dedicated to equity management and issuance.
It has been a week of consolidation in the capitalization table management space. Fidelity announced plans to acquire Shoobx this week, and payroll and compliance company Deel recently unveiled that it is acquiring digital governance platform Capbase.
Deel, which launched as a payroll and compliance platform for international employees and contractors, has acquired one of the biggest players in the capitalization table management arena, Capbase. Terms of the deal were not disclosed.
Deel will leverage Capbase’s expertise to launch equity management and issuance services that can help businesses operating with legal and tax questions such as taxable events, local laws, required reporting, and more– across 90 different geographic regions.
“We looked at U.S. compliance and realized it was a very, very hard thing to do,” Deel Co-founder Alex Bouaziz told TechCrunch in an interview. “Equity is such an important part of companies, so enabling other companies to grant it across geographies and at scale felt like something we should tackle.”
Capbase was founded in 2018 to help startups manage the complexities of securities transactions. The company’s services range from helping companies with incorporation, setting up their board, purchasing shares, managing their capitalization table, finding funding, and facilitating due diligence for potential investors and buyers. Capbase has raised a total of $6 million in funding.
After the deal closes, Capbase will continue with business as usual, but Deel will leverage the company’s expertise to launch a new product dedicated to equity management and issuance. All of Capbase’s 20 employees will join the Deel team.
San Francisco-based Deel was founded in 2018 and enables companies to hire employees across the globe and pay them in more than 150 currencies. The company was valued at $12 billion last May and has raised a total of $680 million in funding. Deel has made a total of five acquisitions, including this week’s Capbase buy. Deel’s previous acquisitions have focused on payroll, HR, and work visa management.
The Consumer Electronics Show (CES), a tech event that showcases the latest advancements in consumer electronics and technology, is a must-attend conference for those working in the field of tech. But what if you work at a bank?
This year, U.S. Bank sent five representatives to walk the floors of CES to scout out what’s new and what’s possible when it comes to banking technology. Among the group attending last week’s technology showcase were U.S. Bank Chief Innovation Officer Don Relyea and Senior Vice President and Head of Applied Foresights Todder Moning.
We caught up with Relyea and Moning to get their thoughts on the show.
You’ve just returned from CES. Tell us about what U.S. Bank was looking for at the show.
Don Relyea: We are looking for several things. We go to get an understanding of how ready for primetime various technology verticals are for mass consumer applications. We also go to detect new disruptive technology trends well in advance of their readiness for consumers, so we can prepare to take advantage of opportunities – as well as avoid (or leverage) a disruption. A good example is how, a decade ago, we detected the early rise of natural language processing and started testing and learning with it, eventually leading to us being ahead of the curve in releasing an industry-leading voice assistant a decade later.
Todder Moning: We think about it like a “tech safari” or a “future safari” – allowing us to see a lot of the new products or emerging R&D work across multiple tech spaces and across multiple industries. It helps us to see what consumers, business owners, and our employees are going to be experiencing in their lives and helps us better understand what financial solutions are going to become most important to them. We look for how the spaces and tech we follow are progressing and for the weird or unexpected. That gives us new ideas that we take back to start work in our innovation labs and business lines.
Was there any tech on display that had the potential to help improve the user experience?
Relyea: More than I could ever tell you about. A big trend we saw in this space was the leveraging of AI for hyper-personalization across every industry. Companies in so many different verticals were converging AI, digital twins, the cloud, and the sensors in your consumer devices to create highly personalized and useful consumer experiences.
A great example is Incheon Airport (Seoul, South Korea) using a digital twin combined with AI, IoT sensors and consumer phones to give travelers a navigational guide like none other: an augmented reality robot avatar that will lead them around the airport wherever they need to go. Another one I loved was an AI scanner that analyzes your face and detects your skin condition in order to recommend skin care products. When the point of sale becomes your bathroom instead of the mall, that will be a gamechanger.
Moning: Yes, a lot of it.
Sustainability and waste tracking
New experiences in the automotive and transportation industries
The broad use of sensors, AI, displays, and wearables that are bringing services, health, and wellness directly to the consumer
Easier interconnectivity in smart homes and smart devices across product brands to finally start making those contexts easier
Continuous advancement in VR/AR glasses for digital and virtual experiences
Automation and autonomy in vehicles, robots, and other appliances/devices that will help assist or do things for people
How about tech for back office operations?
Relyea: Again, I’ll go to the Incheon Airport example. Not only did a friendly little robot provide guided navigation, but also the airport used the digital twin for operational efficiencies as well, helping to manage air traffic, vehicle traffic, foot traffic, and physical plant operations.
Moning: To be candid, the fintech part of the show was pretty sparse. It’s been that way in years past too. CES is typically far less interesting when it comes to technology we might directly implement to our systems, and much more interesting in seeing how we can integrate into the experiences where consumers would want to use their money. Which, we’re seeing more and more – particularly with embedded finance – is kind of everywhere.
When it comes to implementing ideas like these at a bank, is it better to be on the leading edge to gain a first-mover advantage? Or is it better to wait for other firms to jump in first?
Relyea: It really depends on the use case. In some cases, with fintechs and reg tech, it may be better to be an early mover. In others, where the maturity of the technology is not clear, it is better to wait until the technology achieves a good level of maturity.
Moning: It depends. We like building prototypes to try ideas first. We also like collaborating with or investing in startups when it makes sense. We will go first when it makes sense and we’re ready, like when we were first in ApplePay, first in Zelle, first in real time payments networks, and first to have smart chat services with all three major smart-speaker brands. Other times, we’ve seen the first-in-market attempts by others at really new technology fall flat or miss the mark. So first-mover vs. fast-follower really depends on each opportunity.
If U.S. Bank was exhibiting at CES, what would be the newest tech you would showcase?
Relyea: We get so much out of exploring the show floor, and so we find other ways to launch and showcase our own innovations, but we’re rather proud of our Smart Assistant, including the launch of our Spanish language version this year – the nation’s first voice assistant for banking in Spanish. Other candidates would be some of our work within the real time payments space, perhaps some of our blockchain initiatives or the recent launch of our financial education program for college athletes, which we are doing in collaboration with Opendorse. There are a lot of digital innovations happening across U.S. Bank that combine the best of digital with our amazing team members.
Moning: Some of our voice tech stuff is pretty cool, at the leading edge. We’ve done some really good things with real time payments in auto and some other areas. Our approach tends to be more of one where we work quietly behind the scenes until just the right time to launch it to the public, rather than showcasing our work in prototype or in pilot. I’d love to share more, but we’ll hold some of those cards close to the vest.
Outside of fintech applications, what was the coolest thing you saw at the show?
Relyea: I liked the MPC micro power chip that pulls low amounts of power from dirt and moisture. I haven’t seen anything quite like it before – that can charge a battery array and light an off-grid structure. I’m looking forward to when their tech is commercially available.
Moning: It would have to be the BMW Dee, a concept car that had “e-Ink” panels all over the outside of it, including the windows, and changed color in real-time based on music or your mood. As a sustainability concept, the Under-Ocean Farming that Siemens was showing was amazing. And from Caterpillar, the giant equipment company, they were showing remote autonomy, where you could control a real excavator that was in Peoria, Illinois from a seat at CES in Las Vegas. Pretty incredible.
Fidelity Investments has acquired equity management company Shoobx, marking Fidelity’s first acquisition since 2015.
Terms of today’s deal were not disclosed.
The acquisition will help Fidelity expand its offerings for startups and early-stage companies.
Fidelity Investmentsannounced this week it has acquired equity management company Shoobx. Financial terms of the agreement were not disclosed and the deal marks Fidelity’s first acquisition since it purchasedeMoney Advisor in 2015 for $250 million.
Ultimately, the move will help Fidelity expand its offerings for startups and early-stage companies. In fact, today’s acquisition contributes to Fidelity’s growing portfolio of tools that support the startup ecosystem. Fidelity Labs, the organization’s innovation arm, has invested in several startups and fintech companies, and has developed its own technology to improve the investment process.
Fidelity will integrate Shoobx’s technology into its Stock Plan Services business, an arm that offers equity compensation plan recordkeeping and administration services. Part of Fidelity’s Workplace Investing division, the Stock Plan Services is a workplace benefits provider that serves almost 700 companies with 2.5 million end users holding $250 billion in plan value.
Shoobx was founded in 2013 and helps private companies streamline compliance related to incorporation, raising capital, and exiting so that they can focus on their business. That’s because Shoobx helps them manage their shareholders, the shares they own, and information such as the share class, the price paid for the shares, and any information on options or warrants.
“Given the success of our commercial relationship with Shoobx and the increasing demand from private companies to support them as they scale and grow, including helping their employees manage their financial well-being, acquiring Shoobx was a natural next step in our relationship,” said Fidelity Workplace Investing Head Kevin Barry. “Together, we will accelerate the development of new and innovative solutions designed to help private companies confidently navigate the complex journey all the way through to an exit or IPO.”
Fidelity and Shoobx first partnered in 2021 to provide an equity management solution to the private market. At the time, Fidelity offered a Shoobx-branded tool that combined Fidelity’s equity compensation and benefits administration with Shoobx’s equity management capabilities, board management tools, and data room solutions.
Digital identity solutions company Jumioannounced yesterday that Singapore car-sharing company GetGo has selected its technology to help onboard new drivers.
As one of the largest car-sharing services in Singapore, GetGo seeks to offer a user-friendly online ecosystem that promotes shared and sustainable mobility. The company was founded in 2020 to help users rent and share cars, enabling users to book a car using their mobile phones. GetGo focuses on simplicity, flexibility, and accessibility. These three attributes add up to one thing– customer centricity.
In order to help drivers onboard to the GetGo platform, GetGo will leverage Jumio’s identity verification tools that leverage biometrics and AI to automatically authenticate GetGo users. Jumio will help GetGo protect its fleet of 1,700 vehicles against theft by requiring drivers to provide a valid government-issued ID and a selfie. The partnership will reduce the time it takes GetGo customers to onboard down to minutes.
“Jumio’s facial verification technology allows GetGo to simultaneously raise its trust and safety standards while enhancing its customer onboarding experience,” said GetGo Product Lead Lionel Fong. “GetGo looks forward to a long-term partnership with Jumio in pushing the boundaries on bringing a reliable and frictionless verification experience to the masses.”
Jumio was founded in 2010 and came close to collapse when it filed for bankruptcy in 2016. After restructuring, Jumio sold to Centana Venture Partners, which acquired the company for $850,000 two months after its bankruptcy filing.
Jumio has come a long way since its dip in 2016. The company has processed over one billion transactions from over 200 countries and territories. What’s more, Jumio acquired KYC and anti-fraud solutions company 4stop in 2021 and compliance firm Beam in 2020. The company’s most recent funding round took place in March of 2021 when it closed a $150 million round from Great Hill Partners, bringing its total funding to $255 million.
Business payments technology company Nuvei will acquire B2B payments company Paya.
Nuvei anticipates the purchase will help it add integrated payment capabilities, diversify its business, and grow in the B2B payments space.
The deal is expected to close for $1.3 billion.
Payment technology solutions provider Nuveiannounced this week it has acquired B2B payments company Paya. The all-cash transaction is expected to close for $9.75 per share for a total value of around $1.3 billion.
Paya’s payment technology helps businesses accept payments and get paid faster and more efficiently. The company’s solutions range from payment acceptance, disbursement, and ACH, to marketing services and developer integrations.
Canada-based Nuvei anticipates the purchase will help it add integrated payment capabilities, diversify its business, and grow in the B2B payments space. Specifically, combining Paya’s integrated payment capabilities into Nuvei’s platform will add value and growth potential. Additionally, Nuvei will be able to leverage Paya’s integrations with 300 independent software vendors and commerce solutions to enter into the software-led market.
“The proposed acquisition of Paya is a powerful next step in the evolution of Nuvei, creating a preeminent payment technology provider with strong positions in global eCommerce, Integrated Payments and business-to-business,” said Nuvei Chief Executive Officer Philip Fayer. “The proposed transaction will combine two people-first, technology-led, high-growth payment platforms. It will accelerate our integrated payment strategy, diversify our business into key high-growth non-cyclical verticals with large addressable end markets, and enhance the execution of our growth plan.”
Founded in 2003, Nuvei offers global card acquiring services, alternative payment methods, crypto payments, fraud and risk management, analytics and more. The company serves businesses across a range of industries in more than 200 global markets, facilitating 150 currencies. Nuvei went public in 2020 and now has a market capitalization of $5.58 billion.
Today’s buy marks Nuvei’s 6th acquisition. The company acquired Smart2Pay and BaseCommerce in 2020, and purchased Mazooma, Simplex, and Paymentez in 2021.
Allianz Trade, Santander Corporate & Investment Banking (Santander CIB), and Two have partnered to launch a new B2B buy now, pay later (BNPL) tool.
The new tool leverages Allianz Trade to protect against the risk of default, Santander CIB for financing, and Two for the BNPL technology.
The launch comes one year after Santander’s digital consumer bank launched Zinia, a customer-facing BNPL solution.
A new three-way partnership is driving fresh innovation in the BNPL space this week. Trade credit insurance firm Allianz Trade, trade finance bank Santander Corporate & Investment Banking (Santander CIB), and B2B ecommerce payments platform Two have teamed up to create a BNPL tool for large multinational corporations.
Combining each firms’ expertise, the group has created a solution for corporations to offer a buy now, pay later (BNPL) tool for business buyers, enabling them to defer payments at checkout. Created by Two, the BNPL tool supports payments in multiple currencies and leverages Santander CIB for financing to offer sellers payment upfront while facilitating credit terms to buyers.
Allianz Trade protects against the risk of default. The firm will leverage its database that contains information on more than 80 million corporations to instantly assess credit requests via its API, helping Santander CIB make financing decisions instantly.
“Our solution will be distributed worldwide and aims to allow large corporates to develop their online sales by offering deferred payments to existing and new customers, without being exposed to non-payment risks, while benefiting from immediate and guaranteed payments,” said Allianz Trade Global Head of e-commerce François Burtin. “It is a turnkey solution combining the very best of our three firms, easy to set up and improving both seller revenue and user experience.”
Today’s launch comes one year after Santander’s digital consumer bank launched Zinia, a customer-facing BNPL solution for customers in Germany and the Netherlands.
Founded in 2020, Two seeks to fix the world of B2B ecommerce by offering a corporate BNPL tool. The Norway-based company has raised $3 million in seed funding. “At Two we are obsessed about delivering seamless ordering and buying for B2B buyers while removing and automating the operational processes for sellers,” said Two Cofounder Stavros Tamvakakis. “Business buying is not a one-size fits all and our product streamlines key steps in the journey (e.g. instant onboarding, ordering, underwriting, invoice distribution, payments, reconciliation) so that sellers do what they do best while we abstract the pain points of drop-offs, working capital tie up, risk, and manual work. Our ambitions are at a global scale, so we decided to take our partnership with Allianz Trade further by collaborating with Santander CIB, combining two powerhouses in insurance and banking to create a unique and innovative solution dedicated to large corporates.”
As the demand for direct-to-consumer BNPL tools increases, so will the demand for B2B BNPL tools. Other players in the B2B BNPL arena include Bespoke Financial, TreviPay, and Tranch. These tools rely on business credit and repayment data to mitigate risk, so partnerships with firms like Allianz Trade will prove to be essential in helping B2B BNPL newcomers ensure repayment.
Digital banking app for kids and teens, Greenlight, launched a financial literacy game today.
The game, Greenlight Level Up, is designed to teach financial skills to kids from kindergarten to 12th grade.
Only 23 states in the U.S. require schools to offer lessons in personal finance.
Greenlight, a digital banking app for kids and teens, unveiled a financial literacy game today called Greenlight Level Up.
The game aims to teach kids from kindergarten to 12th grade skills that they can use to improve their financial well-being. Many financial skills are not taught in schools. In fact, only 23 U.S. states require schools to teach a personal finance course. Greenlight Level Up offers lessons on earning, spending, saving, investing, managing credit, income, taxes, and more.
The game was crafted by academic and game design experts to keep kids engaged, using coins and stars as rewards.
Schools, teachers, and students can access Greenlight Level Up for free via Greenlight for Classrooms, an online financial literacy library for kids in grades kindergarten through 12. Greenlight for Classrooms will launch later this year.
Greenlight was founded in 2014 and offers a money management platform for families. The company has served five million parents and kids, offering them real-life experience in the financial world with credit and debit cards, along with a tandem mobile app. By using the cards with help from their parents, Greenlight helps kids build skills to manage their earnings, savings, spending, and giving; and empowers kids to learn to invest. In 2021, Greenlight raised $260 million in a round that valued the company at $2.3 billion.
Credit card company Yonder has tapped regtech company Cable to enhance its financial crime compliance.
“Now we’re starting to scale our member base, we needed a solution that could ensure our regulatory compliance as we grow,” said Yonder Cofounder and Chief Risk Officer Theso Jivajirajah.
Cable demoed its automated assurance technology at FinovateFall 2022 in New York.
London-based Yonder, a self-described “modern lifestyle” credit card, is giving its financial crime compliance a boost this week by partnering with regtech company Cable.
Yonder was founded in 2021 as a lifestyle card for U.K. consumers. The card costs around $18 (£15) per month and has a generous rewards system that enables users to earn points they can redeem for restaurant purchases, offers travel insurance, and does not charge fees for cross-border transactions. The company will leverage Cable to enhance its financial crime compliance and oversight processes.
“Now we’re starting to scale our member base; we needed a solution that could ensure our regulatory compliance as we grow, without any major headcount increases.” said Yonder Cofounder and Chief Risk Officer Theso Jivajirajah. “Cable’s automated monitoring across our financial crime controls helps Yonder address any issues right away, meet our regulatory requirements, and focus on serving our members better.”
Cable will offer Yonder access to its automated financial crimes assurance that will test each user account for compliance with the Bank Secrecy Act and Anti-Money Laundering requirements. By automating the process, Cable will help Yonder save time by automating reports and reduce risk by notifying the company immediately in the case of a breach.
Founded in 2020, Cable has raised $5.3 million in a seed round led by CRV and LocalGlobe. Last fall, before landing Quaint Oak Bank as a new client, the company demoed its automated assurance technology at FinovateFall 2022.
It can be difficult to pin down a birth year for fintech, but no matter how you look at it, our industry has come a long way. I was recently reminiscing and found a post published in 2003 by Finovate Founder Jim Bruene titled, The 10 Most Significant Innovations & Developments of 2003. These developments, Bruene said, “provide the best glimpse at the future of online financial services delivery.”
2003 was officially 20 years ago, which makes it a perfect benchmark. I’ve taken a look at the 10 developments and innovations that Bruene deemed “most significant” in 2003, and outlined some of fintech’s most recent updates and persistent struggles.
Phishing undermines trust (for now)
One of the original enemies to widespread adoption of online banking was phishing. In the last two weeks of December of 2003, one (now-defunct) organization had recorded 60 unique phishing attacks, sending an estimated 60 million fraudulent messages.
Those numbers don’t look so bad compared to today’s figures. The Anti-Phishing Working Group (APWG) recorded more than 14,000 phishing attacks per day in the third quarter of 2022, marking the worst quarter for phishing the organization has ever observed. However, while phishing persists, it hasn’t deterred the majority of users from adopting digital banking.
Banks move to boost security perceptions
In this section, Bruene referenced an increase in keylogging incidents, along with one bank’s efforts to circumvent keylogging attacks by adding a keypad on the screen to allow users to click the buttons to enter their PIN instead of typing on their keyboard. The bank also implemented a secondary password requirement.
While these workarounds likely mitigated some of the fraud, they simultaneously introduced more friction for end users. Today, many firms have implemented biometrics to eliminate keylogging. However, while biometrics may have gotten rid of keylogging attacks, the authentication method has not put an end to fraud.
Citibank launches interbank transfers (A2A)
Citibank added online interbank transfers in the fall of 2003, making it the first major U.S. bank to offer such a service. At the time, Citi tapped CashEdge (acquired byFiserv in 2011 for $465 million) to power the transfers.
Today, of course, the industry doesn’t consider account-to-account transfers an innovation. Rather, the service is now considered table stakes for all banking service providers. What has changed are the rails. A handful of banks have started piloting using the blockchain to transfer funds, especially in the case of cross-border payments.
Press turns positive toward online banking and other online financial activities
Twenty years ago, the dot-com crash was still fresh in the minds of both investors and everyday consumers. According to Bruene, 2003 was a turning point as consumers began to embrace the conveniences and efficiencies of online banking.
Today, while we’re not recovering from a dot-com crash, we are still reeling from the FTX scandal that took place late last year. It is estimated that around $1 billion to $2 billion in consumer funds were lost after the digital crypto exchange failed. And while the event will not result in negative press about fintech in general, it has already soured the press and industry analysts on crypto.
Bank of America hits seven million users
As you may imagine, adoption of Bank of America’s digital banking looked vastly different in 2003. “Bank of America had as many online banking customers as all U.S. banks combined had five years ago (at year-end 1998),” said Bruene. “The bank’s 7 million active users account for 43% of its checking account base, and 22% of all households. Year-over-year growth was an impressive 50%, with 2.3 million new active users.”
Today, Bank of America serves 67 million retail and small business clients. Of those, 55 million use Bank of America’s digital banking services. In July of last year, those customers logged into their Bank of America accounts one billion times– a record number for the bank.
The decline of paper statements begins
While 2003 may have marked a decline in paper statements, it didn’t mark the beginning of the end. According to a 2017 Javelin Strategy & Research report, only 61% of checking account customers have committed to paperless statements. In the report, Javelin suggests that much of this is unintentional. “Consumers now reflexively reach for their smartphones in all aspects of their lives and banking is not an exception,” said Mark Schwanhausser, Director, Digital Banking at Javelin Strategy & Research. “The intent is not to take statements away from customers; it is to provide an alternative that convinces them that paper statements are as unnecessary and obsolete as a checkbook register.”
Banks redesign websites for Yahoo-like clarity
Of the ten developments on this list, this one is my favorite, and not only because of the use of Yahoo! as an example. Optimizing online user interfaces is a science, and by 2003, developers didn’t know as much as they do today about creating user-friendly services.
Today, the shining examples in tech have shifted from Yahoo! to the likes of Uber, Stripe, and Airbnb. And by now, most large firms’ digital experiences exhibit “Yahoo-like” clarity. Still, there will always be room for improving the user experience, especially as consumers become aware of new enabling technologies like open finance.
Real-time credit for remote deposits
In this section, Bruene applauded two FIs for offering consumers instant credit for mailed remote deposits. It baffles me to think about mailing in a paper check to deposit it. However, in a pre-smartphone era such as 2003, there weren’t many other options that didn’t require additional hardware or infrastructure.
Today, while consumers can deposit most checks via smartphone, the deposits still generally take two-to-three days to post in consumer accounts. As a bonus, most firms have discovered a way to turn remote deposits into a revenue generating opportunity by charging consumers for instant deposits into their accounts.
Identity Theft 911 provides a credible source to fight ID theft
Identity Theft 911 has a storied history. The company rebranded to CyberScout in 2017, was acquired by Sontiq in 2021, which was bought by TransUnion in late 2021. Regardless of the multiple transitions, all companies shared a similar mission. Today, TransUnion helps consumers build and grow their credit scores, offers credit alerts, fraud alerts, credit monitoring, and more.
What’s different about this industry today, however, is the number of competitors in the space. Many organizations offer free credit monitoring. Other, paid services offer monitoring and reporting from all three bureaus, identity theft insurance, and more.
Japanese buy now, pay later fintech Smartpay launched Smartpay Bank Direct, a tool that will enable users to pay for their purchases directly from their bank accounts.
Prior to today’s launch, Smartpay users could only repay using a credit card.
Smartpay is currently available in Japan, KSA, and the UAE. The company aims to expand into Singapore, South Korea, Taiwan, and other markets in Southeast Asia and MENA.
Japan-based Smartpay is launchingSmartpay Bank Direct, a tool that offers users a new way to pay for their online installment purchases.
Starting today, Smartpay users can pay for their buy now, pay later (BNPL) purchases directly from their bank accounts. The move is made possible by Smartpay’s partnerships with 67 banks and makes Smartpay one of the first consumer finance companies to leverage Japan’s open banking ecosystem.
Smartpay markets itself as a “payments experience” company, offering consumers a BNPL tool that enables consumers to pay for their purchases in three installments over the course of two months with no fees or interest. When the company launched its BNPL tool, consumers could only repay using their credit card. Today’s launch empowers them to pay directly from their bank account.
Japan revised its open banking approach in June 2018, when it required banks to offer open APIs within two years. After the start of 2020, the deadline was extended to September 2020. By that time, 97% of banks were in compliance.
“Since the launch of Smartpay just over a year ago, as Japan’s first BNPL solution payable by credit card, we have continued to expand our partner ecosystem with new retailers and an expanding customer base with revenue growth over 200% in the last three months,” said Smartpay founder and CEO Sam Ahmed. “It’s interesting that we have lifted merchant average order value more than 30% in four different merchant categories. We attract higher value consumers for the merchant through our eKYC process.”
Smartpay was founded in 2021 and is currently focused on Japan, KSA, and UAE markets. The company aims to expand into Singapore, South Korea, Taiwan, and other markets in Southeast Asia and MENA “in the medium term.”
