This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
European business finance solution company Qonto is seeking to acquire its competitor Penta.
Together, the two will serve more than 300,000 small business customers across Germany, France, Italy, and Spain.
Terms of the deal have not been disclosed.
Two European business finance solution companies have agreed to join forces. In the deal, which is expected to close in the next few weeks, Paris-based Qonto is seeking to purchase Berlin-based Penta. Financial terms have not been disclosed.
“When Steve Anavi and I founded Qonto in 2016, we had the ambitious goal of simplifying everyday banking for SMEs and freelancers across Europe,” said Qonto CEO Alexandre Prot. “Today, we’re already present in four European markets and, while I’m very proud of what we’ve achieved so far, we want to go even further: the natural next step was to join forces with Penta. We are thrilled to welcome the Penta team onboard. Together we’re going to be the finance solution of choice for one million European SMEs and freelancers by 2025!”
Penta launched in 2017 and now serves 50,000 small business customers in Germany. Qonto launched the same year and currently serves more than 250,000 clients across France, Germany, Italy, and Spain. The acquisition will combine Qonto’s brand strength, license, and core banking system with Penta’s local expertise.
Qonto is anticipating that Penta’s existing market presence will strengthen its operations in Germany. The combined entity will make Qonto a strong leader in the European digital business finance sector. After the acquisition is complete, the company will have more than 300,000 customers and 900 employees.
“With the combination of increasing customer numbers and rising revenues, we have gained even more substance in the past 18 months,” said Penta CEO Markus Pertlwieser. “We are very excited that we now have the chance to actively shape digital banking for business customers in Europe as a team with Qonto.”
Open-Finance.ai partnered with FICO to leverage the company’s Blaze Advisor decision rules management system.
Israel-based Open-Finance.ai will integrate Blaze Advisor into its open banking platform to offer real-time credit assessments.
This news comes as “Israel is on the cusp of major banking reform with the introduction of open banking,” said FICO VP of Partner Management in Europe, the Middle East, and Africa Mark Farmer.
Analytic decisioning platform FICO and risk, finance, and compliance software company Open-Finance.ai have teamed up this week.
Under the agreement, Open-Finance.ai will integrate the FICO’s Blaze Advisor decision rules management system into its open banking platform. Using FICO’s technology, Open-Finance.ai will assist its financial services clients to save time on consumer credit assessments by leveraging real-time, analytically driven appraisals.
For Israel-based Open-Finance.ai, this comes just as open banking legislation is gaining traction. “Israel is on the cusp of major banking reform with the introduction of open banking,” said FICO VP of Partner Management in Europe, the Middle East, and Africa Mark Farmer. “Automating decisions allows lenders to increase the efficiency of the lending process without sacrificing risk management regulatory rigour. This will speed up lending, increase customer satisfaction, reduce operational costs and drive economic activity.”
Open-Finance.ai anticipates the move will help remove human bias from lending decisions, improve risk decisions, and expand access to credit to more people.
FICO’s Blaze Advisor gives businesses a solution to make smarter, more transparent business decisions by offering companies multiple methods for rule authoring, testing, deployment, and management. To make this work, Blaze Advisor provides decision trees, scorecards, decision tables, graphic decision flows, and customized templates. The technology also supports business performance monitoring.
“Manual processes, a conservative approach and significant regulation have been a drag on growth of the Israeli market,” said Open-Finance.ai Co-founder Shay Basson. “Now, we have an ability to manage risk instantly, based on multiple data sources to provide an instant, yet risk-aware decision to credit and insurance consumers.”
Founded in 1956 and headquartered in California, FICO offers decisioning tools used by more than 650 clients, including nine of the top 10 U.S. banks and eight of the top 10 EMEA banks. Last year, FICO launched a new loan origination solution called FICO Originations Solution that seeks to automate the entire customer journey.
The $2.4 trillion consumer credit card industry has been getting crowded, but the increase in competition is not enough to stop X1, one of the newest players in the smart payment card space.
X1 was founded in 2017 to create a challenger credit card that fits today’s digital-first era. “With X1, we tossed the rulebook out and designed the first challenger card for digital natives,” said X1 Co-founder and CEO Deepak Rao. “X1 delivers a superior experience that feels both simpler and smarter than any other credit card on the market.”
Having exited private beta in October of last year, X1 now has cardholders in 50 states and its card has been used in more than 100 countries. The company reports that a card transaction takes place every five seconds, and it is on track to see $1 billion in annualized spend this year.
Helping to fuel this success is a $25 million Series B funding round the company received this week. The investment was led by FPV, with Craft Ventures, Spark Capital, Harrison Metal, SV Angel, Abstract Ventures, the Chainsmokers, and Global Founders Capital also participating. X1’s total funding now sits at more than $45 million, which the company will use to invest in product innovation and scale.
So why is a newcomer experiencing this kind of success so early on? The answer may lie in how X1 is differentiating itself from the competition. The company offers four major features that set it apart from incumbent credit card providers. Cardholders can:
Benefit from income-based credit limit
X1 says it bases cardholder credit limits on their current and future income, rather than on their credit score, which is a risk underwriting method that is not only dated, but also excludes certain segments of the population that have thin credit files. The company estimates that this method allows it to set cardholder credit limits up to five times higher than traditional players.
End free trials automatically
In today’s subscription-based economy, cardholders need a payment method that works for their needs. X1 offers virtual payment cards that automatically expire, allowing users to automatically end a free trial by terminating the payment method. Using a virtual card number in this way limits the possibility a user will continue to pay for a service they have forgotten about and don’t use.
Spend anonymously
X1 offers a feature to help users protect their privacy. The company allows cardholders to spend anonymously, without disclosing their personal information, which can be sold, misused, or susceptible to fraud.
Create virtual cards for one-time use
While not a new feature to the credit card world, single-use virtual credit card numbers are more commonly found in commercial credit card offerings. At their core, these single-use virtual cards offer more security since the credit card number expires. They are also great to use as a backup method to control recurring transactions or limit subscription fees.
X1 will begin accepting applications from its 500,000 user waitlist– as well as to the general public– in the coming weeks. The card comes with no annual fee and pays users two points on every dollar they spend (3 points for every dollar if the cardholder spends more than $15,000 in a year). Points can be redeemed at major brands and retailers.
Casavo has raised $408 million in a debt and equity financing round.
The round is comprised of $306 million in debt and $102 million in equity, and brings Casavo’s total funding to $798 million.
The company will use the funds to grow its existing operations, while expanding into France.
Casavo, a France-based fintech that seeks to make it easier for users to buy and sell their homes, has raised $408 million in combined debt and equity. The round is comprised of $306 million in debt, along with $102 million in Series D equity financing, and brings Casavo’s total funding to $798 million.
The equity round was led by Exor NV, along with contributions from existing investors Greenoaks, Project A Ventures, 360 Capital, P101 SGR, Picus Capital, and Bonsai Partners; as well as new investors Neva SGR, Endeavor Catalyst, Hambro Perks, Fuse Venture Partners, and others. Casavo reports that the funds bring the company’s borrowing capacity to more than $510 million, which will be key to scaling its home-buying business.
Casavo was founded in 2017 to simplify the process of buying and selling homes. The company originally launched as a home-buying platform and has since evolved to offer a marketplace that serves both home sellers and buyers. Sellers can either receive a purchase offer from Casavo or find a buyer through the company’s partner agent network, and buyers can access Casavo’s inventory of properties and receive integrated services such as mortgages.
“The round will allow us to consolidate our leadership in Europe by growing across our existing markets in Italy, Spain and Portugal, while expanding into new ones, with France being a priority,” said Casavo Founder and CEO Giorgio Tinacci. “We’ll continue investing in our mission to simplify the way people sell and buy homes, having evolved from a pure home-buying platform to a leading next-generation European residential marketplace.”
Today’s funding comes just four months after Casavo’s last fundraise in March, when the company received a $203 million investment. Casavo currently has 4,000 homes in Italy, Spain, and Portugal listed on its platform. So far, the company has sold 3,200 properties for a total value of $1+ billion.
Fundrise islaunching a $1 billion growth equity fund called the Fundrise Innovation Fund.
The new VC-like fund will facilitate crowdsourced investments in private technology companies.
The move is Fundrise’s first significant expansion outside of private real estate.
Alternative investment firm Fundrise was originally founded to give retail investors access to invest in private real estate. Today, the Washington, D.C.-based company is expanding its horizons, adding access to another area of investing with limited access for everyday investors– venture capital (VC).
The company islaunching the Fundrise Innovation Fund, a $1 billion growth equity fundaimed to democratize access to investments in top private technology companies. The move is Fundrise’s first significant expansion outside of private real estate.
“The proprietary systems and technology infrastructure we created to tap into private real estate are now capable of disrupting ownership of other asset classes previously inaccessible to individuals,” Fundrise said in a blog post announcement. “…in short, Fundrise has the potential to not only open up but completely transform the entire $10 trillion private market.”
Fundrise was founded in 2010 to offer investors an alternative to stocks and bonds. In 2012, the company launched its real estate investment platform that allows users to invest as little as $10 in private real estate. Today, Fundrise has 300,000 users and has acquired more than 200 assets, collectively worth more than $5.1 billion, on behalf of its investors. The company takes a low-fee approach, charging a 0.15% annual investment advisory fee along with a 0.85% annual asset management fee for each fund.
Fundrise said it selected to expand into VC investing because it has proven to be one of the best-performing investments as well as one of the most exclusive investments, since the general public is excluded from investing in a company until after it goes public.
With the VC fund, Fundrise will enable users to invest in a diversified portfolio of high-growth private tech companies ranging from mid-to-late stage, as well as some public equities. The company’s fee model for the fund will not come with a “carried interest” profit sharing component.
Fundrise will open VC investing to current users of its real estate offerings first, though “on a limited basis.”
The world of banking is ever-evolving, and NCR has been part of this evolution since it was founded in 1881.
To get some insight from a firm that has had a front-row seat to industry changes– and to get a glimpse of what’s next– we spoke with NCR Chief Product Officer Erica Pilon. She has spent more than 20 years in the fintech industry, having also spent time at FIS managing three unique digital banking platforms.
What products and technology are resonating with NCR’s 600+ institution clients?
Erica Pilon: Our clients are really responding to data enhancements, crypto, and self-service support. Consumers today expect all interactions to be hyper-personalized, which is impossible without real-time, reliable data. At NCR we are helping financial institutions personalize banking experiences for customers at scale through enriched data and analytics. For example, we recently announced that Allegacy Federal Credit Union has partnered with us and Google Cloud for our data warehousing and analytics solution to make data actionable, unlock predictive insights, and drive innovation and financial health.
Another service resonating with our clients is the ability to offer buy/sell/hold of bitcoin within digital banking as it drives opportunities to build relationships, increase data insights, and generate revenue. Our clients have also shown increased interest in and excitement around enhanced self-service offerings, such as the Kasisto intelligent digital assistant, which provides human-like digital customer support.
What trends are making the largest impact in fintech in the coming year?
Pilon: Community financial institutions no longer only compete with the institution down the block but also with nontraditional threats like neobanks, big techs, and fintech providers. There is a new sense of urgency for financial institutions to provide modern, convenient experiences with robust, innovative products and services to retain customer loyalty, trust, and market share.
Open banking is a massive trend that is transforming the fintech space; it’s creating an opportunity for banking as a service and giving smaller fintech players the ability to try and steal market share from traditional institutions. To compete, banks and credit unions must work with partners that will help them stay open while continuing to leverage the significant trust advantage they have with customers and members. This is another reason why personalizing the experience within digital channels is so important; it helps community financial institutions retain their differentiator and compete with emerging threats.
How is NCR preparing itself for web3?
Pilon: We recently acquired LibertyX, a leading cryptocurrency software provider, which lays the groundwork for us to deliver a complete digital currency solution to our customers. This includes the ability to buy and sell cryptocurrency, conduct cross-border remittance, and accept digital currency payments across digital and physical channels.
NCR remains committed to delivering the agile software platform and services necessary for institutions to power flexible, efficient, and modern banking experiences across all customer touchpoints. Our platform is designed to help our clients quickly innovate and deliver new offerings to keep pace with emerging preferences and trends.
Howhas the recent consumer-first narrative changed how NCR develops its banking products?
Pilon: NCR continues to prioritize consumer-first, mobile-first experiences in our technology solutions. Now, in a world with so much optionality, banks and credit unions must be able to offer a wide range of choices for how consumers can conduct their banking. This means robust self-service capabilities with strong support options like video chat, as well as sophisticated physical footprints.
The consumer-first narrative is another reason NCR is so focused on data; banking interactions today must be personalized, or customers will quickly go elsewhere. This doesn’t just mean knowing basic details like names and birthdays, it also means being able to provide meaningful advice and guidance related to things like financial health and wellness.
How has NCR evolved to serve bank clients in today’s digital-first era?
Pilon: We firmly believe that digital-first doesn’t mean digital-only, but rather digital everywhere. This is where NCR is uniquely differentiated in the market; we have the ability to offer sophisticated digital solutions for both physical and digital touchpoints, enhancing the customer experience and increasing efficiencies. For example, we can facilitate the ordering ahead of cash or coin for small businesses or starting an account opening process online and then finishing it in the branch. NCR bridges the gap between physical and digital touchpoints.
The pandemic only emphasized what NCR and our clients have known all along: the future is digital, and it’s time to adapt. NCR remains dedicated to providing the flexible, innovative, and efficient technology needed to power excellent banking experiences and strengthen credit unions and community banks’ competitive positions.
Modern core processing provider Zeta appointed FIS Veteran Karla Booe as Chief Compliance Officer.
Booe has spent more than 27 years working at FIS, where she served as Deputy Chief Compliance Officer.
Zeta was voted Best of Show at FinovateWest Digital 2020.
Modern core processing provider Zeta is introducing a fresh face this week. The California-based company recently brought onFIS Veteran Karla Booe as Chief Compliance Officer.
Booe will drive regulatory compliance programs for Zeta’s U.S. based clients from her office in Little Rock, Arkansas. She has spent the past 27+ years working at FIS, where she most recently served as the company’s Deputy Chief Compliance Officer.
Commenting on Booe’s appointment, Zeta CEO and Cofounder Bhavin Turakhia said, “She will further our already strong commitment to regulatory risk and compliance.”
“There has been little-to-no tech innovation with regard to the management of regulatory risk compliance for credit cards in the last decade,” said Booe. “I am excited to help drive that change for Zeta’s clients. Zeta’s mission to provide next-gen capabilities to banks so they can launch products, programs, and innovations faster are underscored by a technology framework and by design principles that will completely change the processing landscape.”
Zeta, which was voted Best of Show at FinovateWest Digital 2020, offers modern core and processing for banks and embeddable banking for fintechs. Earlier this year, Zeta received $30 million in new funding, bringing its valuation to $1.5 million.
Digital insurance agency Wefox raised $400 million in a combined debt and equity round.
The funds boost Wefox’s valuation from $3 billion to $4.5 billion.
Wefox relies on technology to take a “prediction and prevention” approach, rather than relying on a “repair and replace” mindset.
Digital insurance agency Wefox just raised $400 million in a combined debt and equity round led by Mubadala Investment Company. EDBI, Eurazeo, LGT, Horizons Ventures, OMERS Ventures, and Target Global also participated. The investment brings Wefox’s total funding to $1.3 billion.
The round boosted Wefox’s valuation from $3 billion to $4.5 billion in 12 months. This increase comes at a time when other fintechs are closing funding in down-rounds, meaning their valuation has decreased.
“This new valuation of $4.5 billion is a clear validation of our business model, which focuses on indirect distribution via agents rather than direct,” said Wefox CEO and Founder Julian Teicke. “This makes our business one of the most credible insurtechs in the market right now.”
According to Teicke, Wefox doubled its revenue, which stood at $320 million last year. Within the first four months of this year, Wefox saw $200+ million in revenues, which positions the company to generate $600 million by the end of this year.
Founded in 2015 and with more than two million customers, Wefox is a licensed digital insurance company that sells insurance through intermediaries, not directly to customers. The company relies on technology to take a “prediction and prevention” approach, rather than relying on a “repair and replace” mindset, which many insurance companies take.
Wefox will use today’s funds for product development and to expand across Europe, Asia, the U.S. The company aims to reach three million customers by year-end.
“Wefox is in the strongest position ever,” said the company’s CFO and Founder Fabian Wesemann. “In successfully closing this funding round we reinforce our strategy and enable faster acceleration on our path to greater revenues and profit.”
I’ve had my eye on Curve since it launched in the U.K. in 2015. Curve consolidates users’ payment cards into a single physical card and digital wallet, meaning that users only need to carry one card.
After Curve announced its U.S. launch earlier this year, I signed up for the waitlist and onboarded last week. I’ve only had the card for about a week so far, but overall I’m fairly impressed.
Better than predecessors
The company’s card consolidation technology seems to be winning where other players have failed. Remember COIN, the digital smart card that promised to replace all of the cards in your wallet? The company had a slow and rocky start after its 2013 launch– it didn’t even begin shipping cards until 2015– and then shut its doors in 2017 after being acquired by FitBit in 2016. At that point, some of the company’s backers had not even received their card in the mail even though they fronted $50 for the opportunity to get on COIN’s wait list.
Curve has obviously learned from COIN’s mistakes. To start, the company has a lower customer acquisition cost (CAC) compared to COIN. While COIN shipped a digital, battery-powered card along with a magstripe-reading dongle that customers would use to load all of their payment cards, Curve issues a standard plastic payment card with an EMV chip and NFC-powered contactless payment technology.
The plus side
Curve also comes with a handful of additional benefits including rewards, no foreign exchange fees, an Anti-Embarrassment mode that will allow the payment to go through even if the card is declined (with restrictions), and a Go Back in Time feature that enables users to change which card is used for a transaction up to 30 days after the fact. Unique benefits such as these are typically only found with digital banks. But I like that Curve offers me access to these unique features while I get to keep my primary banking relationship.
The downside
Of course, there are a handful of drawbacks I’ve noticed so far, as well. The biggest downside for me is that Curve is working with Mastercard for its credit card network. This means two things– I can’t use it at Costco and I can currently add only my debit card to the app. That’s because at the moment, Curve users can only add credit cards from Mastercard, Discover, and Diners Club. This limitation negates the main benefit of the Curve card, which shouts the motto, “one card to rule them all.” Curve plans to support Visa credit cards in the future, however, so perhaps this is only an issue for beta testers.
The other drawbacks are fairly minor. The PFM capabilities are lacking, perhaps because they expect users to turn to their bank for money management tools. Additionally, call me shallow, but I wish the card itself wasn’t so ugly. With black, white, and red lines, the card has a masculine, retro vibe.
Curve’s potential trajectory
If the progress Curve has made in the U.K. is any signal of its trajectory in the U.S., there is hope that the company will not go the way of COIN. The biggest indication of this is its business plan. Unlike other consolidated payment cards and even some digital banks, Curve operates on a freemium model with the three paid tiers ranging from just under $6 to just under $18 per month. Benefits offered to users in higher tiers include using the Go Back in Time feature more than three times per month, adding more than two cards, and receiving 1% cashback at a limited number of retailers. And for users worried about the color of their Curve card, Curve also offers U.K. users other card design options and even a metal card for those willing to pay for the top tier.
U.K.-based GoHenry has acquired France-based Pixpay for an undisclosed sum.
The deal will help GoHenry expand further into Europe.
GoHenry and Pixpay will operate under their own brands with no change in staffing or headquarters.
Kids money management app GoHenry has acquired France-based Pixpay for an undisclosed amount.
The move will help U.K.-based GoHenry expand further into Europe, taking advantage of Pixpay’s teen mobile banking operations in France, Spain, and eventually Germany and Italy.
“Pixpay is the most developed player in Europe,” said GoHenry CEO Alex Zivoder, “and we’re excited to combine our expertise in financial education to accelerate not only GoHenry’s growth but to accelerate the financial fitness of even more kids and teens globally.”
Founded in 2019, Pixpay’s mobile banking app targets a slightly older user base then GoHenry. Pixpay is aimed at pre-teens and teenagers, while GoHenry caters to kids as young as six years old. Both seek to not only help kids spend and save money, but also to teach them responsible money habits at an early age. With almost 200,000 users, Pixpay has raised €11.1 million. Benoit Grassin is co-founder and CEO.
“We are delighted to be joining the GoHenry Group as we prepare to accelerate Pixpay’s expansion across Europe,” said Grassin. “GoHenry’s experience and heritage will only serve to strengthen the already strong proposition offered by Pixpay.”
The acquisition will not impact current operations at either company. Both GoHenry and Pixpay will function under their own brands with no change in staffing or headquarters. The two plan to work together to improve their products and “further transform financial education across the globe.”
GoHenry launched in 2012 and has since raised $66.2 million. The company expanded into the U.S. in 2019 and now counts more than two million members across the U.S. and the U.K.
“So as we expand into Europe, we’re excited to empower even more young people with the money management skills they need to thrive in today’s digital economy,” the company said in its announcement.
In a digital world, there’s no way around digital identity. The topic touches all corners of fintech and ecommerce, and while it can create a stumbling block, leveraging consumer identity data can also hold great opportunity.
We recently spoke with Experian’s Kathleen Peters for her thoughts on digital identity and how financial services companies can use consumer data to their advantage.
Peters started her career as an engineer at Motorola and later moved into voice and messaging encryption technology. Eventually, she began working in Experian’s global fraud and identity business and now serves as the company’s Chief Innovation Officer.
The fintech industry has always struggled with digital identity. Why is digital identity so difficult to get right?
Kathleen Peters: A consumer’s identity is personal; every interaction and transaction requires their identity. Consumers expect a seamless and frictionless experience, but also rely on organizations to protect their information. The balance is crucial and challenging.
As an industry, fintech is known for creating compelling and personalized online journeys. But that experience can suffer if the fraud-prevention routines are perceived as burdensome by consumers.
Every year, Experian conducts a survey of consumers and business leaders, asking them about sentiments, trends, and other matters around fraud and identity. Year after year, the number-one consumer concern is online security. When transacting online, people want to know that their information is safe and secure. In striking a balance with consumers to instill trust, industry players need to show some sign of security that reinforces privacy.
Putting this balance into practice, if a consumer or business is performing a large online transaction, they want to see added layers of identity verification. Conversely, if they are performing a simple online purchase, industry players should not over-index with heavy-duty identity resolution (e.g., facial recognition, passcode) on low-risk, low-dollar transactions. In short, we need the right fraud‑prevention treatment for the right transaction; it is not a one-size-fits-all exercise.
It is important to know a customer’s identity for compliance reasons, but are there business use cases for this as well?
Peters: When it comes to KYC (Know Your Customer) compliance, you want to verify that you are dealing with a real person (not a made-up entity) and ensure that you are not dealing with criminals or people on watch lists. This is a basic compliance check and mitigates the risk presented by increasingly resourceful “bad actors” who have become very sophisticated in how they find and exploit vulnerabilities.
For commercial entities, especially small businesses, you want to know that they are a real business. You want to know that the principals involved in the business (the owners, board members) are not criminals or people on watch lists, or that the company itself is not somehow engaged in things that you do not want to deal with. In this sense, KYC applies to consumers and businesses alike in terms of a compliance check. There is a different level of compliance for consumers versus businesses, but the KYC concepts remain similar.
With KYC, businesses can check the box that indicates that “I am compliant.” That does not necessarily grow a bank, fintech, or online merchant’s topline revenues. Compliance is certainly a core element of identity, but so is identifying a potentially fraudulent transaction. For example, recognizing synthetic identity scams can prevent an organization from losing hundreds, if not thousands, of dollars in fraud losses.
When the concept of personalization was introduced in fintech, there was a lot of discussion of privacy concerns and fears that consumers would perceive banks’ efforts as “creepy.” Does this still exist today?
Peters: Our annual Global Identity and Fraud Report shows that people hold banks in high regard. They possess an especially strong degree of trust from consumers. Yet, unknown fintechs that may reach consumers through a banner ad or other similar means may not yet possess that same amount of trust. Building trust with consumers is critical, especially for fintechs, and it starts with transparency and reinforcing the value exchange.
What is the best way for banks and fintechs to build trust among their consumers?
Peters: Banks and fintechs need a layered approach to identity resolution that accommodates the balance between fraud detection and the online experience to build consumer trust early in their relationship. Establishing that trust should be a top priority and involves having visible means of security, being transparent about why you are collecting certain types of data, and delivering value for that data exchange (e.g., personalized offers, speed). And that value needs to be immediate and a tangible benefit, not a down-the-road promotion or assurance.
According to our Global Identity and Fraud Report, consumers are willing to give more data if they trust the entity and feel as though they are receiving value.
Once the value exchange is established, those feelings of trust and recognition lead to increased brand loyalty, a holy grail for banks and fintechs.
Given this, what are ways banks and fintechs can leverage consumer data combined with an increase in their trust to better connect with consumers?
Peters: Building relationships with consumers comes down to recognizing them, protecting their information and offering a personalized experience. Consumers want to feel confident that their online accounts are secure, and that they don’t need to jump through hoops to access the resources they need.
It comes down to identifying and understanding consumers and their needs. The best way to do that is with a lot of data. It serves as a vast resource to look at the multitude of behaviors historically and predict the next likely behaviors and intent. Predictive modeling like this can be hard to do, especially if you do not have a lot of historical data. However, with aggregated data, scores, and solutions from a provider like Experian, it can be a very powerful way to drive engagement.
For instance, if a consumer is in-market for a new credit card, banks and fintechs may want to engage their consumers with a personalized offer or increase dollar-value transactions—both ways to build trust.
Envestnet acquired revenue management and hosted fee-billing solutions company Redi2 Technologies.
Envestnet will use the buy to modernize its billing, accounting, and back office capabilities.
Terms of the deal were not disclosed.
Financial wellness technology firm Envestnetannounced its 16th acquisition today. The Chicago-based company announced it has purchased revenue management and hosted fee-billing solutions company Redi2 Technologies. Terms of the deal were not disclosed.
Founded in 2002 and headquartered in Massachusetts, Redi2 offers a revenue management platform tailored to financial services companies. The tool offers fee calculation, invoice creation, payouts and accounting, and billing compliance. Among Redi2’s products are Revenue Manager, which provides client revenue accounting and billing services for asset managers; Wealth Manager, which delivers multi-party billing and payouts for broker-dealers and asset managers; and BillFin, which offers advisory billing and invoicing for financial advisors.
Envestnet will use Redi2’s technology to modernize its billing, accounting, and back office capabilities. The company anticipates the additional expertise will drive client engagement and ultimately boost revenue.
“Redi2 is a pioneer and innovator in the cloud-based delivery of wealth and investment management billing software, making them an ideal partner as we continue to strengthen our financial wellness ecosystem,” said Envestnet Executive Vice President of Business Lines Tom Sipp. “This acquisition enhances our strategic enablement of service and data, and over the next two years will create operating leverage by bringing Envestnet and Redi2’s administrative, revenue, and billing services together.”
Envestnet was founded in 1999. The company’s most noteworthy acquisition was its purchase of Yodlee in 2015. The Yodlee acquisition broadened Envestnet’s wealthtech offerings, launching it into the world of open finance. Envestnet is a publicly-traded company on the New York Stock Exchange under the ticker ENV and has a market capitalization of $4.66 billion.
