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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Insurtech company Oyster received $3.6 million in seed funding.
The round was led by New Stack Ventures.
Oyster was founded in 2021 by Blend, Stripe, and Strategy& alumni Vic Yeh, Jon Patel, and Nikhil Kansal.
Insurtech company Oysterreceived $3.6 million in funding this week. The Seed Round was led by New Stack Ventures with contributions from Global Founders Capital, Conversion Capital, Cambrian Ventures, SNR VC, Kearny Jackson, Valia Ventures, Interlace Ventures, V1 VC, and a group of angel investors.
Oyster a new take on insurance. It provides merchants an embedded insurance tool to integrate into their point-of-sale that offers customers insurance for a good or service they are about to purchase. Oyster will use today’s investment to fuel its point-of-sale insurance platform and add more merchant partners. The company’s list of merchant partners currently includes Bulls Bikes, Jewels by Grace, Zooz Bikes, Bario Neal, Area 13 Ebikes, and The New Wheel.
“You can buy a $5,000 ebike or engagement ring online in just a few clicks and get it delivered the next day. Want to get insurance for that purchase? Good luck! It’s an offline process that can take many days and lots of paperwork,” said Cambrian Ventures Founding Partner Rex Salisbury. “Oyster is offering embedded insurance for high growth ecommerce categories to allow consumers to seamlessly insure some of their most important possessions at point of sale in a few minutes. It’s a huge opportunity to move personal insurance into the digital age.”
Oyster differentiates itself by offering affordable insurance rates for products including bikes, ebikes, jewelry, phones, collectibles, and electronics. The company provides full coverage from theft, loss, and accidental damage– and many policies offer a zero dollar deductible.
The company was founded in 2021 by Blend, Stripe, and Strategy& alumni Vic Yeh, Jon Patel, and Nikhil Kansal. The team recognized the insurance market as one of the last financial sectors to be disrupted by the technological innovations of the past two decades. “The insurance industry is still in the early innings of digital transformation,” the company said in a blog post announcement. “As such, we’re accelerating the speed of innovation in order to provide the best-in-class products and services to our customers and partners.”
What does it take to be a fintech analyst? You have to be willing to get things wrong on occasion. Along with that, you need to be able to admit when you’re wrong. This becomes most apparent every December, when it comes time to share predictions on what the fintech industry can expect in the coming year.
Many of my predictions for 2023, which you can find published in this month’s eMagazine, were shaped from looking back at the trends I predicted for the latter half of 2022. Here’s a look at some of those trends, along with an assessment of how I did and a prediction for how the trend will fare in 2023.
Prediction #1: Beginning the era of “neo super apps”
How I did: Wrong. With every other fintech company claiming to be a super app these days, this prediction is slightly subjective. In my opinion, however, we haven’t entered an era of neo-super apps.
What to expect: A year ago, I would have identified the first potential U.S. super app as PayPal. However, Walmart has been making strides in this area and is getting ready to compete in the fintech arena. As a bottomline, we are still a ways out from super apps taking over fintech.
Prediction #2: Accelerating M&A activity
How I did: Somewhat correct. In comparing M&A activity to pre-pandemic 2019 levels, M&A activity has indeed increased. Though year-end data for 2022 hasn’t been published yet, according to FT Partners’ Q3 2022 Fintech Insights Report, there have been 998 deals so far in 2022. While this represents a slight increase over the 986 M&A deals conducted in 2019, it is a large slide from the 1,486 deals closed last year.
What to expect: The recent economic decline is causing companies to watch their pockets closely and mitigate risk where they can. Many large fintechs have already made major layoffs in order to maintain their bottomline or reduce their burn rate. These factors will contribute to both lower deal numbers and deal volume in 2023.
Prediction #3: Dwindling conversation around digital transformation
How I did: Correct. While the need for digital transformation across verticals has not subsided, the continuous pulse of conversation around digital transformation has eased up.
What to expect: This does not mean that digital transformation is over. In fact, many of the conversations we can expect to have in 2023– such as embedded finance, banking-as-a-service, and personalization– are built on the foundation of digital transformation.
Prediction #4: More discussion around Central Bank Digital Currencies (CBDCs)
How I did: Correct. In the U.S., the Federal Reserve has not taken much action toward creating a CBDC other than issuing a discussion paper on the topic. However, there has been a flurry of activity around CBDCs across the globe. In December of 2021, nine countries had launched a CBDC, while today, 11 have launched their own CBDC. Similarly, CBDC development has increased. In December of 2021, 14 companies had a CBDC in development, while today there are 26 countries with a CBDC in development.
What to expect: In the U.S. the discussion around CBDCs will progress, especially now that the FTX scandal has brought to light the need for more governmental intervention and oversight.
Prediction #5: BNPL takes a backseat
How I did: Wrong. Though there have been many publications warning consumers about the dangers of misusing BNPL tools, we are still seeing a regular pulse of new BNPL launches throughout the industry. And while the CFPB published a study on the growth of BNPL and its impact on consumers, the organization has not implemented any formal regulation restricting BNPL players’ movements in the market.
What to expect: I’m refreshing this prediction for 2023. Consumers have over-leveraged themselves when it comes to BNPL, and it is not only starting to catch up with them, but it is also catching up with the BNPL companies themselves. According to the CFPB’s study, “Lenders’ profit margins are shrinking: Margins in 2021 were 1.01% of the total amount of loan originated, down from 1.27% in 2020.”
Additionally, though the CFPB has been vague on the timing, there is looming regulation facing BNPL tools. “Buy Now, Pay Later is a rapidly growing type of loan that serves as a close substitute for credit cards,” said CFPB Director Rohit Chopra. “We will be working to ensure that borrowers have similar protections, regardless of whether they use a credit card or a Buy Now, Pay Later loan.”
Subsiding talent acquisition
How I did: Correct. Though companies will always face difficulties trying to secure quality employees, we are no longer seeing the tech talent war that we experienced in 2021. In fact, in the latter half of 2022, we saw the opposite. A handful of fintech companies, including Plaid, Autobooks, MX, Klarna, Brex, Stripe, Chime, and more, have laid off sizable portions of their staff.
What to expect: The painful reality is that the layoffs will likely continue into 2023 as the economy continues to contract.
Thoma Bravo has acquired business spend management software company Coupa for $8 billion.
The deal is expected to close in the first half of 2023.
The acquisition follows rumors that Vista Equity Partners had planned to acquire Coupa earlier this year.
Private equity firm Thoma Bravoannounced this week it is scooping up business spend management software company Coupa for a total of $8 billion. The all-cash transaction will make Coupa a privately held company and is expected to close in the first half of next year.
Coupa was founded in 2006 to offer businesses spend management solutions that help them view and control their indirect spending. Some of the company’s business spend management tools include e-invoicing, travel and expense management, spend analysis, treasury management, and more. Coupa went public in 2016 and has a current market capitalization of $5.98 billion.
“For more than a decade, we’ve been building an incredible Business Spend Management Community and have proudly cemented our position as the market-leading platform in our category. We’re looking forward to partnering with Thoma Bravo and accelerating our vision to digitally transform the Office of the CFO,” said Coupa Chairman and CEO Rob Bernshteyn. “While our ownership may change, our values do not. Every one of us at Coupa will continue to put our customers at the center of everything we do and help them maximize the value of every dollar they spend.”
Today’s report follows last month’s rumors that Texas-based private equity firm Vista Equity Partners planned to purchase Coupa. Vista Equity Partners is not only a well-known investor in the fintech space, it has also made a handful of large acquisitions in the fintech space in the past few years, having acquired tax compliance firm Avalara earlier this year and cloud identity solutions provider Ping Identity in 2016.
Interestingly enough, Thoma Bravo acquired Ping Identity earlier this year for $2.8 billion after Vista Equity Partners exited its investment in the company. Thoma Bravo takes a buy-and-build approach in which it acquires similar companies and consolidates them to create synergies and develop companies with greater scale, scope, and broader service offerings. Among Thoma Bravo’s other investments in the fintech space are Bottomline Technologies, Digital Insight, SailPoint, Ellie Mae, and Kofax.
Regarding the company’s Coupa purchase, Thoma Bravo Managing Partner Holden Spaht said, “Coupa has created and led the large and growing Business Spend Management category. We’ve followed the company’s success for many years and have been impressed by its consistent track record of delivering high levels of value for its global customer base. We look forward to partnering with Rob and the rest of the management team to keep investing in the company’s product strategy while driving growth both organically and through M&A.”
The partnership enables AvidXchange to expand on the global payments capabilities it launched last month.
The partnership will help AvidXchange offer its U.S.-based clients an embedded payment experience, creating a more convenient payment process.
Payment automation solutions company AvidXchangeannounced this week it has selected international money transfer company Wise (formerly known as Transferwise) to expand its international payment capabilities.
“Partnering with Wise to provide our customers with best-in-class international payment capabilities was an easy decision because of their market-leading platform and seamless integration capabilities,” said AvidXchange Chief Growth Officer Dan Drees. “Together, we stand firm as leaders and remain dedicated to making our customers’ payments process more efficient regardless of country lines.”
AvidXchange launched its global payments last month to create an embedded cross-border payment solution for its middle market business clients and their suppliers. Piloting the launch is Oracle NetSuite. The company will enable its clients to access the tool using AvidXchange’s SuiteApp within NetSuite’s SuiteCloud platform.
AvidXchange offers a range of payment automation products, which include invoicing, electronic bill payment, accounts payable automation software, purchase order requisitions, and more. The company serves a range of industries, including real estate, construction, financial services, hospitality, healthcare, and more.
Today’s partnership with Wise helps AvidXchange offer its U.S.-based clients an embedded payment experience that creates a more convenient payment process. The integration enables users to pay both domestic and international suppliers, all within the AvidXchange platform. Wise also offers AvidXchange clients more visibility into fees, gains, and losses to help them better control costs and view cash flow.
“Current systems don’t allow businesses to easily send, spend, or receive money internationally,” said Wise Platform Head Steve Naude. “Through our collaboration with AvidXchange, Wise is helping businesses gain access to a faster, more cost-effective and seamless way to manage finances with domestic and international suppliers in multiple currencies and countries. With 50% of transfers sent instantly, always at the mid-market rate, AvidXchange customers can now have confidence knowing they are saving time and money with each transaction.”
With more than 50 bank and business clients, Wise is one of the best-known players in the international remittance market. The London-based company was founded in 2010 with a simple mission: money without borders.
AvidXchange was founded in 2000 and currently processes over $140 billion transactions annually across its network of more than 680,000 suppliers. Despite its long tenure in the space, AvidXchange has only been a public company for a little over a year. The company debuted on the NASDAQ in October of 2021 and currently has a market capitalization of $1.69 billion.
This is a sponsored post by Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems
The use of analytics within the financial services sector has evolved over the years, with some suggesting that it could be about to evolve even further, moving from a landscape where decisions are “data-dictated”, rather than “data-informed.”
There is a distinct difference between the two concepts and the role, or lack of, that humans play in each scenario. In the case of data-informed, humans remain in the loop to make decisions and take the appropriate actions based on data and analytics, whereas data-dictated refers to applications executing programmatic actions automatically in response to some stimulus or event.
So, are financial services organisations really at a point today where human insight is no longer a vital requirement of the decision-making process and are there really just two types of data-related decision-making at play? In short, no. But it’s not completely black and white, as discussed in a recent Economist Intelligence webinar. Instead of just two options, today’s financial services firms typically implement four different categories of analytics: panoramic, predictive, prescriptive, and programmatic. Depending on the use case and the organisation, each of these types of analytics provide businesses with immense value.
Panoramic, predictive, prescriptive, and programmatic
Firstly, panoramic is about providing the business with a real time, accurate, expansive view of what’s happening inside and even outside the organization. For financial services, that might be the real-time liquidity across an entire firm.
Predictive, on the other hand, calculates the probability that events are likely to occur. For example, what’s the probability the Bank of England will cut interest rates if inflation pressures ease, as has been mooted, and how will this impact the firm’s positions?
Prescriptive analytics analyzes data to suggest the most appropriate actions to take, based on what is likely to occur, or what is already happening. This type of analytics would allow an investment bank for example to continuously predict the probability that their total market exposure will breach their risk utilization limits. With the right data and analytics platform in place, firms can also obtain prescriptive guidance that presents various options they can take to prevent or eliminate a breach, with the expected outcomes and trade-offs associated with each option.
These insights allow risk managers, who tend to have extensive experience in handling these kinds of situations, to make decisions based on their experiences, and guided by data-driven prescriptive analytics. For instance, it can help them to determine whether to initiate a hedge or unwind some positions. Prescriptive analytics therefore ensures experienced experts remain in the loop and at the heart of decision-making, rather than actions happening programmatically.
The final of the four Ps is about executing real time programmatic actions based on predictive and prescriptive analytics. Often, programmatic analytics are employed when there’s no time for human intervention, for cases like fraud prevention, pre-trade analytics, trading, and customer next-best action. Programmatic actions are also deployed in use cases when there’s simply no need for a human to be in the loop, which allows the organization to streamline operations and improve productivity.
Pragmatic application of the four Ps
Consequently, rather than moving away from a data-informed (human in the loop) to data-dictated (no human in the loop) state, the financial services sector is instead opting for the pragmatic application of any or all of these four Ps of analytics.
This use of analytics is providing firms with the capabilities needed to gain a 360-degree view of enterprise data, delivering a wide range of benefits to the business including better compliance, increased revenue generation, and improved decision support. When financial business leaders are empowered by real-time data and analytics, they are able to make decisions based on accurate and current data, not data that is weeks old, thereby eliminating errors and missed business opportunities.
Additionally, by incorporating advanced analytics into real-time processes flows, dashboards, and reporting, businesses can obtain better insights to guide decision-making, helping to understand what happened, why it happened, and what is likely to happen.
Armed with a current, trusted, and comprehensive view of what’s happening in the moment ensures financial services firms are prepared for events and disruptions that are likely to occur, can manage events and disruptions faster as they arise, and are in the best position to take advantage of new opportunities as they present themselves.
Challenger credit card X1 has raised $15 million, bringing its total funding to more than $60 million.
Along with today’s announcement, X1 is also unveiling a new in-app stock investing tool that will enable cardholders to purchase stocks using points.
X1 will use the funds to fuel growth and roll out new services for its members.
Challenger credit card X1 has raised $15 million this week. The funds bring the company’s Series B round to $40 million and elevate its total funds to more than $60 million. The investment was led by Soma Capital and included contributions from Brian Kelly (The Points Guy) and Kyle Vogt.
While the self-described smart credit card did not provide an exact valuation, the company said that today’s round increases X1’s total valuation by more than 50% over where it stood four months ago, when the company raised $25 million in Series B funding.
X1 will use the funds to fuel growth and roll out new services for its members. One such new feature is X1’s new investing platform that enables cardholders to buy stocks in the X1 app using their rewards points. X1 will guide investors by recommending stocks based on the cardholder’s spending habits, risk preferences, investment goals, income, and time horizon. The new capability will begin rolling out to select cardholders in the coming weeks.
The company said in the press release that it has future plans to expand the stock purchasing features “to compete with more traditional investment options.” Based on this, we can expect features common to Acorns and Robinhood such as spare change investing and automatic investment deposits.
For a card with no annual fee, X1’s rewards are hard to beat. The company offers cardholders 2x points on every dollar spent, 3x points on every dollar spent for the year if transactions exceed $15,000, and 4x points on each dollar for one month of purchases for each referral. X1 has paid out more than $10 million in rewards points since exiting its beta last October.
“With X1, we want to build an iconic and enduring consumer finance brand in an industry that’s long overdue for disruption,” said X1 CEO and Co-founder Deepak Rao. “We’re honored by the reception our card has continued to receive and to have raised this funding from Soma Capital, an early investor in more than 20 unicorns. With our innovative new investing platform, we’re excited to reimagine yet another sector in the consumer financial market.”
Outside of its rewards structure, X1 has other unique features that help differentiate itself in the crowded credit card market. The company has a stainless steel card and offers users virtual card numbers that they can set to expire on a specified date in order to avoid forgetting a subscription or a free trial period. The former automatically expires after one use, while the latter automatically expires 24 hours after it is activated.
Finastra and Clinc have partnered to integrate Clinc’s conversational AI technology into Finastra’s Fusion Digital Banking platform.
Finastra will offer its 8,600 financial instiution clients access to Clinc’s AI virtual assistants to help mitigate the load on call centers while providing quality answers to end users.
Finastra was founded in 2017 as a merger between Misys and D+H.
Financial software company Finastra has tapped conversational AI fintech Clinc this week. The two have partnered to integrate Clinc’s Virtual Banking Assistant technology into Finastra’s Fusion Digital Banking platform.
The added capabilities will enable Finastra’s 8,600 financial institution clients to increase digital engagement with their customers. Clinc’s Virtual Banking Assistant helps banks manage common banking requests through different channels, which ultimately helps reduce the volume of calls into the call center.
Clinc was founded in 2015 to build what it calls a “human-in-the-room” level of virtual assistant powered by AI technology and machine learning. The company’s solution understands natural language and leverages elements from the user’s inquiry– such as wording, sentiment, intent, tone of voice, time of day, location, and relationships– to craft an answer that is not only human-like, but also useful in answering the original question.
“We are incredibly pleased to be able to offer our AI solution to banks in collaboration with Finastra, whose FusionFabric.cloud platform is viewed around the world as a leading financial technology ecosystem,” said Clinc CEO Jon Newhard. “Our Virtual Banking Assistant, which can be integrated seamlessly as part of a digital transformation strategy, enables financial institutions to engage customers efficiently but without losing the personal touch. This is vital in an era when increasing numbers of consumers are demanding authentic and intuitive experiences from chatbots.”
Clinc’s technology will be available in Finastra’s FusionFabric.cloud, a marketplace that helps financial services firms find pre-built, ready-to-integrate apps into their Finastra products. Since launching in 2017, FusionFabric.cloud has had 566 customers sign up and has helped form more than 153 partnerships.
“Financial institutions worldwide will benefit from increased access to Clinc’s innovative chatbot technology,” said Finastra Chief Product Officer, Universal Banking Narendra Mistry. “Understanding how real people talk and interact is critical as banks and credit unions work to ensure that the customer experience remains strong while embracing new technologies. We’re delighted to welcome Clinc to our technology ecosystem, and for Finastra’s customers to be able to easily offer conversational AI as part of their digital strategy.”
Finastra was founded in 2017 as a merger between Misys and D+H. The latter acquired Mortgagebot in 2011 for $232 million. Mortgagebot was among the first companies to demo at a Finovate event. The company won Best of Show at FinovateFall 2007. Finastra’s technology spans lending, payments, treasury and capital markets, and universal banking. The U.K.-based company counts 90 of the world’s top 100 banks as clients.
The following is written by Lance Boyer, a recent college graduate and a Gen Z journalist.
Generation Z made up about 40% of active U.S. consumers in 2020, according to Fast Company. It also has more buying power than any of the Generation X, Boomer, or Silent generations. And it’s growing rapidly.
Generation Z is better off than the Millennial generation too. “Core” Millennials graduated high school and college into one of the worst economies in living memory. Despite the pandemic recession, Generation Z’s job and earning prospects have improved.
Financial technology providers can’t ignore Gen Z any longer. If you’re in the business of making budgeting, banking, and investing accessible to mobile users in the United States, you need to tailor your offerings to Gen Z — and now, not in 10 years.
That means designing your mobile app with younger users in mind. Here’s where to start.
5 Key Mobile Features for Gen Z Users
If you plan to market your mobile fintech app to Gen Z users, ensure it includes these five features.
1. A Unified View of User Finances
Most of the best personal finance apps have something in common: they give users a unified view of their finances inside and outside the app.
Your app shouldn’t only show balance and transaction information for accounts accessible directly through the app (if any). It should also display real-time or near real-time data from securely linked external accounts. It’s ultimately the user’s choice to link or not link these accounts, but your app should create as little friction as possible in that decision.
This adds a layer of development complexity for apps with money management functionality, as opposed to “simpler” budgeting apps that should link to external accounts. But it’s well worth the added investment and will increasingly become essential as the lines between banking and budgeting apps blur.
2. Social Sharing Capabilities
And not just standard Facebook, Twitter, Instagram, and Snapchat integrations. That’s old news.
Your app needs to make it easy — and fun and worthwhile — for users to generate their own content within the interface. Venmo does this simply but very well by allowing users to make transaction details public. Find an equal balance between privacy and disclosure in your product.
3. Stringent Privacy Controls (Beyond What’s Required by Law)
Your fintech app should have stringent privacy controls above and beyond what’s required by applicable law.
Your app shouldn’t make “low privacy” the default, and certainly not because you’re banking on monetizing your users’ data. That data is valuable, but you should come by it honestly. Gen Z is much more digital savvy than older generations and knows “if you’re not paying, you’re the product.”
You can undoubtedly incentivize users to share more with a freemium model or rewards for more sharing if you make it clear that you have users’ interests at heart.
4. Flexible Subscription Options
The more control you give your users over how and when they pay for your product, the more trust you’ll earn and the more you’ll make from them in the long run.
Don’t overcomplicate your payment options. Too many choices paralyze the user. Simple, straightforward payment verticals — one for pay as you go, one for pay for what you use, one for annual or quarterly subscriptions, and so on — are the way to go.
5. On-Call Support
The misconception that Gen Z doesn’t like talking to real humans must go away. Sure, the average Gen Z’er isn’t apt to chat on the phone for hours, but if you consider texting a form of talking — and it is — then Gen Z is just as chatty as its predecessors.
Maybe, more importantly, Gen Z is happier to be micromanaged than its predecessors. The average Gen Z’er seeks positive reinforcement and isn’t afraid to ask questions.
Lean into these preferences by investing in on-call support for your fintech app. This is a big ask for smaller enterprises, so it’s OK to charge for this service as long as it’s optional. Albert’s Genius function is a great example. It’s a built-in financial sherpa operating on a pay-what-you-want model, starting at a few dollars per month.
Final Thoughts
Generation Z makes up a larger percentage of active U.S. consumers than the Millennial generation, and it’s about to have more buying power. Its oldest members are already aging into the coveted 25-to-54 age demographic.
If your fintech app isn’t tailored to Gen Z’s preferences, you’re already behind the curve.
Fortunately, your development team doesn’t have to reinvent the wheel to appeal to Generation Z. Including five key value propositions does the trick:
A single-dashboard view of user finances — both in the app and in external linked accounts
Seamless social sharing capabilities and user-generated content tools
Stringent privacy controls that keep users in the driver’s seat
Flexible payment options rather than one-size-fits-all subscription or flat-fee models
On-call human support, whether free or paid
These “big five” are just the start. You’ll likely find your younger users demanding additional features and functions. But the big five are non-negotiable. The sooner you work on them, the better.
Small business banking platform Tide has agreed to acquire lending marketplace Funding Options.
Tide will integrate Funding Options’ loan matching technology into its own business loan comparison site.
Financial terms of the deal were not disclosed.
A rising tide lifts all boats. Or in today’s case, a rising Tide lifts Funding Options. That’s because small business banking provider Tide has agreed to acquire lending marketplace Funding Options. Financial terms of the deal, which was first reported by AltFi News, were not disclosed.
U.K.-based Tide was founded in 2015 to help small businesses save time and money on banking and administrative tasks. The business bank accounts offer accounting tools, expense cards, invoicing, payment collection capabilities, business loan comparisons, and cashflow insights. Tide currently counts more than 450,000 sole traders, freelancers, and limited companies as clients.
By integrating Funding Options’ business lending comparison technology into its own, Tide will be able to offer small businesses a broader set of options when applying for a loan. That said, Tide plans to maintain the Funding Options brand as it exists today. Funding Options CEO Simon Cureton will continue to lead Funding Options and will also be charged with leading Tide’s business loan comparisons.
“With this deal, Tide is aiming to create one of the UK’s biggest digital marketplaces for SME credit, and to make it easier for small business owners to access this vital resource,” Tide CEO Oliver Prill told AltFi. “We know that getting credit is even more important to our members in these challenging times: not just in terms of the rising cost of doing business, but also when high street banks are typically slower to offer smaller businesses loans.”
Funding Options was founded in 2011 and now maintains a network more than 120 lending partners. Since launch, the company has matched small businesses with more than $812 million in working capital in increments ranging from $1200 to $5 million.
Once finalized, the deal will mark Tide’s first acquisition.
The following is a sponsored blog post from Finastra.
Post-pandemic recoveries stalled by rocketing energy prices are leading to calls for stalling a green transition that has already begun. But the costs to businesses due to climate-related weather events within the next four years will be over $1 trillion.
Investors and financial institutions are increasingly applying non-financial factors (Environmental, Social, and Governance) as part of their analysis process to identify material risks and growth opportunities. Also, there is a high interest coming from consumers in the sustainability of businesses and how they impact the environment.
But because of the broad range of indicators coupled with the lack of standards, transparency, and unified reporting makes it a challenge to assess and measure true, impactful ESG credentials and the sustainability of a business.
At the same time, many banks have started to embrace/experiment in the Metaverse including DBS Bank in partnership with The Sandbox with a focus on driving sustainability. Will this be an opportunity or a challenge for financial institutions keen to demonstrate their commitment to a more sustainable future?
To help navigate these challenges Finastra invited three experts in ESG and Sustainable Finance alongside Christophe Langlois, their Global Marketing Lead, Fintech & Developer Ecosystem at Finastra, who hosted this insightful conversation:
Marcus Cree, MD Financial Technology and Services, GreenPoint Global
Tanuj Pasupuleti, CEO, Bankify
Jay Mukhey, Global Director of ESG, Purpose & Impact, Finastra
They discussed the following topics:
The case of ‘greenwashing’ in 2022 and how to identify it.
The main differences in terms of sustainable finance adoption and challenges between the key regions of the world?
The opportunities that come with sustainable finance.
The essential role open/API banking plays in fostering sustainable finance.
Metaverse from a sustainable finance standpoint.
To learn about the successful adoption of ESG and sustainable finance and what solutions are available right now on the market, watch the video by visiting this page.
Square is launching a credit card for its small business clients.
The American Express card will be powered by i2c and issued by Celtic Bank.
There is no word yet on a launch date, but Square said that more details will be released next year.
Move over, Brex, Divvy, and Ramp. Square is getting in on the business credit card game. The mobile payments company announced today it is expanding on its existing partnership with American Express to launch a new credit card that will be tailored for Square’s merchant clients.
Square already offers a small suite of banking tools, including checking, savings, and loans, but this is the company’s first ever credit card offering. Adding a credit card to the mix will not only round out Square’s in-house banking options, it will also help it compete in the increasingly profitable business banking arena.
“Small businesses can struggle to find fair and simple solutions for their credit needs. Square has spent years building a successful lending program to eliminate this barrier for sellers, and we’re uniquely positioned to innovate even further in this space to expand access to new types of credit products,” said Square Banking General Manager Luke Voiles. “We wanted to create a product on a payment network that has a strong track record of supporting small merchants, making this card a natural progression of our existing relationship with American Express.”
As with most fintechs that offer a credit card, Square is tapping a third party, i2c, to power the credit card offering, which will be issued by Celtic Bank.
According to Square, the credit card will integrate directly into the company’s banking suite to help businesses manage their cashflow and offer them visibility into their business’ finances. At the moment, there are not many details about the new American Express credit card, including the launch date, rewards benefits, or cost. However, Square said it will provide more information next year.
The only thing surprising about this announcement is how late to the game Square is. Square launched in 2009 when fintech was still in its infancy. The company debuted its lending arm in 2014 and remained relatively quiet until the challenger banking boom last year when it unveiled its savings and checking accounts.
In comparison, one of the largest challengers in the business banking arena, Brex, was founded in 2017. The company launched its business credit card offering in 2018 and was an overnight success. Multiple other new players joined in, including Ramp, Divvy, and Expensify. Perhaps Square plans to rely on its existing customer base to give it a competitive edge against the competition. The company had more than 64 million business clients as of 2020.
Embedded finance platform Railsr is teaming up with fraud prevention company Featurespace this week to bolster fraud prevention efforts for Railsr as a company, as well as for its clients.
Railsr will leverage Featurespace’s ARIC Risk Hub, combined with its own fraud teams, to provide its clients with a compliance tool to stay on top of regulations. The fraud tools will be available to Railsr clients with a single integration, making it easier for them to focus on growth while remaining compliant.
“As the market accelerates towards embedded finance, consumers expect a frictionless payment experience that is built into the transaction process. With Featurespace’s AI and ML capabilities, Railsr can provide an enhanced level of customer experience, making consumers’ lives simpler and safer,” said Railsr Global Head of Product for Fincrime and Operations Stuart Hartley.
The ARIC Risk Hub will enable Railsr customers to view and manage their fraud analytics, as well as offer them a single place to access Featurespace’s fraud and AML (FRAML) solutions.
“The Railsr platform is a natural fit for Featurespace,” said Featurespace Chief Commercial Officer Matt Mills. “As embedded finance increasingly becomes expected by consumers, making sure they are protected from fraud and financial crime must be expected in equal measure. Railsr have recognized this early and added a critical layer of self-learning technology to ensure their customers get only the best experience.”
Railsr anticipates the new fraud tools will be available within the next year.
Today’s news comes amid a string of high-profile partnerships for Featurespace last month, including with BBVA, Diebold Nixdorf, and Global Processing Services. Featurespace has more than 30 major bank clients including four of the five largest banks in the U.K. Among Featurespace’s customers are HSBC, TSYS, Worldpay, RBS NatWest Group, Danske Bank, ClearBank, and more.
Founded in 2005 by a university professor and his PhD student, Featurespace has raised $108 million, including its most recent investment of $37 million received in 2020.
