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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A look at the companies demoing at FinovateEurope on March 15 digitally and on March 22 and 23, 2022, in London. Register today and save your spot.
Harmoney is a modular, next-generation, digital platform of solutions for complex onboarding and client lifecycle management compliance processes.
Features
Getting rid of compliance processes frustrations
Increasing data quality
Substantially saving costs
Why it’s great
Get rid of compliance process frustrations via a digital, customer-friendly onboarding and client lifecycle management platform which is built with a truly end-to-end perspective.
Presenters
Thomas Van Maele, CEO & Co-founder Van Maele holds masters’ degrees in Business Engineering and Technology Management. Previously, he worked as a Senior Corporate Finance Advisor at KPMG and as a partner at the Econopolis wealth manager. LinkedIn
Thierry van Alphen, Head of Business Development Van Alphen holds a Solvay Business School MBA and has 22 years of experience in financial services at ING in several senior roles in Belgium and the Netherlands. LinkedIn
A look at the companies demoing at FinovateEurope on March 22 and 23, 2022 in London. Register today and save your spot.
ForwardAI’sPredict-as-a-Service is a premium cash flow forecasting and planning tool for companies that want to offer predictive cash flow solutions to small business clients.
Features
Offers simple access to historical, real-time, and predictive cash flow data
Creates cash flow projections and comparisons
Provides custom and template business pivot scenario-building
Why it’s great
Predict-as-a-Service provides a premium cash flow experience for a company’s small business clients while also offering opportunities to offer proactive financial support and custom financing.
Presenter
Nick Chandi, CEO and Co-Founder A repeat entrepreneur with multiple successful companies, Chandi is using his prior experience to help bridge the gap between financial institutions and small businesses. LinkedIn
Consolidation in the Buy now, pay later (BNPL) industry continues as Zip agrees to acquire competitor Sezzle.
The deal values Sezzle at $355 million.
After the acquisition is finalized, Sezzle will rebrand to Zip and the company’s CEO Charlie Youakim will lead Zip’s U.S. business.
Buy now, pay later (BNPL) player Zip (formerly known as Quadpay) is acquiringSezzle in a deal that values Sezzle at $355 million.
Zip CEO and co-founder Larry Diamond expects the deal will help Zip scale up its operations. “Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market.”
Following the deal, Zip’s customer base will increase from 9.9 million to 13.3 million and the number of merchant partners will grow from 82,000 to 129,000. Additionally, The Financial Review estimates that Zip’s total transaction volume will rise from $8 billion to $10.4 billion, and that almost $6.5 billion of this will be from U.S. users.
After the deal closes, Sezzle will rebrand as Zip and the company’s CEO Charlie Youakim will lead Zip’s U.S. business. “I believe the transaction will position us to win in the U.S. and globally,” Youakim said.
Today’s announcement is yet another indication of consolidation in the increasingly-crowded BNPL space. Industry giant Afterpay sold to Block (formerly Square) on February 2nd. And on February 17th, digital payments firm Latitude agreed to acquire Humm’s BNPL operations.
Australia-based Zip was founded in 2013, seven years before BNPL took off as an alternative payment method. Zip is publicly traded on the Australian Stock Exchange (ASK) under the ticker ZIP. The company allows users to split their purchase into four installments over the course of six weeks. With Zip’s app, shoppers use their Zip Virtual Card to pay for their purchase in installments anywhere that Visa is accepted, both online and in-store.
Similarly, Sezzle allows shoppers to use their Sezzle Virtual Card to pay for purchases in four installments over the course of six weeks. The company also offers a long-term financing tool in partnership with Ally and Sezzle Up, an alternative credit solution that helps shoppers build their credit.
Minnesota-based Sezzle was founded in 2016 and went public on the ASK in 2019 under the ticker SZL. At the time, Sezzle said it opted to list on the ASX instead of in U.S. markets because, prior to 2020, the BNPL model was more commonplace in Australia, given that Afterpay, a major player in the BNPL arena, is headquartered in Melbourne.
TransUnion launched Point-of-Sale Suite of Capabilities to provide lenders insight into consumer borrowing habits with point of sale lending and buy now, pay later products.
The new data reporting helps lenders underwrite credit risk.
The reporting methods also benefit the consumer by not penalizing them for using these alternative credit products on a regular basis.
Financial insights firm TransUnionlaunched a new set of tools today that will help shoppers using point-of-sale (POS) loans, including buy now, pay later (BNPL), improve their credit scores while offering lenders a more holistic view of prospective borrowers’ risk.
TransUnion’s Point-of-Sale Suite of Capabilities offers lenders insight into the payment behaviors of consumers using alternative credit tools such as POS lending and BNPL products.
This increased data reporting and visibility helps lenders underwrite credit risk, but also benefits the consumer by not penalizing them for using these alternative credit products on a regular basis. That’s because POS and BNPL loans are underwritten as unsecured installment loans. When these installment products are used frequently, typical credit models could view the borrowing behavior as risky.
“The inclusion of point-of-sale loans including BNPL into credit reports and other risk management tools can help tens of millions of consumers gain access to more credit opportunities and potentially secure better loan terms,” said Liz Pagel, senior vice president and consumer lending business leader at TransUnion. “TransUnion has taken a measured approach in developing our solution suite, working with the top BNPL lenders over the past three years to craft solutions that benefit consumers and do not penalize them for using these products frequently.”
TransUnion’s new toolset aims to offer lenders a single standard to report this alternative borrowing data. In order to minimize unnecessarily negative impact on the consumer credit score while still communicating valuable borrowing and repayment data, POS and BNPL borrowing information will be tagged and filtered into a new section in TransUnion’s core credit file.
“Maximizing the financial inclusion impact requires broad usage of this valuable data in more credit decisions. Ultimately, given the prominence of FICO and VantageScore in the market, the biggest impact from the data will not be realized until the data migrates to the core file and these scores take into account consumers’ good behavior,” added Pagel.
The use of BNPL is becoming more commonplace as more retailers and payment companies adopt varying versions of the technology to encourage higher consumer spending. In fact, according to a recent TransUnion study, up to 100 million U.S. adults have used BNPL loans at least once in the past 12 months. As this growth continues, lenders will need to adjust their underwriting models to account for use of alternative lending technologies.
The environmental, social, and governance (ESG) initiative is no longer just for niche investment portfolios. Instead, the entire banking and fintech industry is going green, and we’re here for it. With that in mind, we have something exciting to announce.
Sustainability Scholarship Program
New this year, we’re promoting ESG within the industry with our Sustainability Scholarship Program for demoing companies. We launched the program to highlight and help the individuals and companies driving fintech forward through sustainable and equitable practices.
How it works
Starting with FinovateSpring, taking place May 18 through 20 in San Francisco, we’ll be looking for applications from prospective demo companies led by underrepresented founders and startups tackling climate change, diversity, and financial inclusion, and granting them complimentary demo participation. Select companies from that applicant pool will be granted complimentary demo slots in our demo line-up for the show.
We’ve always had an application process for the demos we showcase on stage at Finovate events, but the new Sustainability Scholarship Program will help expand our demo lineup. By offering a scholarship to ESG focused startups, we’ll be able to include more voices, more perspectives, and more cutting-edge thinking within fintech, which is an incredibly important initiative.
How to apply
Each event, starting with FinovateSpring 2022, will have scholarship opportunities for eligible* startups working in the following categories:
Environmental: Available to companies pursuing climate-related, environmental, or green fintech
Social: Available to companies with socially conscious fintech solutions
Governance: Available to companies that emphasize responsible governance and leadership
Person of Color Founded/Owned: Available to companies with person-of-color founders or owners
Female Founded/Owned: Available to companies with female founders or owners
Our team will review submissions in each sustainability area and award complimentary demo packages to each of the winners. As part of the demo package, each winner will also receive special sustainability branding.
Companies working in these areas who are interested in demoing at an upcoming event should apply through Finovate’s traditional application process and note their scholarship interest on the application form.
*To be eligible for the program, startups must have less than $7 million in funding.
Challenger bank Nerve is launching banking-as-a-service APIs.
The APIs will enable creator platforms to offer their clients in the creator economy an embedded digital banking experience.
Nerve’s flagship digital bank for musicians helps artists treat their music like a business by providing digital banking and tracking tools.
Nerve, a challenger bank originally designed for musicians, is getting a bit more creative this month. The startup launched a set of public APIs that will help companies serve their clients in the creator economy.
According to Nerve Co-founder John Waupsh, content creators–whether they are individuals or small businesses– have long been underbanked and overcharged. “Every creator deserves financial dignity, and we believe that this begins with a business checking account, and collaboration tools that meet their everyday needs. They are businesses and should be afforded those same benefits,” said Waupsh.
Nerve’s new APIs will offer firms a way to send payouts and royalties at a lower cost to artists such as musicians, authors, entertainers, filmmakers, makers, podcasters, social media content creators, songwriters, and more. The APIs will also enable companies to provide their creator clients with free digital banking tools to help manage their business.
“Companies that pay creators deserve the best, fastest, and least expensive way to pay those they serve, and our APIs open up win-win options for all in the ecosystem,” said Waupsh. “Companies providing distribution, licensing, advances, credit, marketplace, or other services are now able to use Nerve’s APIs to deliver instant, lower-cost payouts to creators.”
Nerve’s flagship product, launched last September, is a niche bank account that helps musicians treat their music like a business. Artists can use the free FDIC-insured debit and savings accounts, powered by Piermont Bank, to manage their business expenses and track and receive royalties and payouts. In addition to digital banking, Nerve also offers tools to help artists collaborate with fellow artists in the music industry, as well as view and track their own stats for Spotify, YouTube, and a range of social media platforms.
Creator platforms that use Nerve’s banking-as-a-service tool will have the opportunity to have access to creators’ transaction and balance information. This data, in turn will benefit the platform by helping them create specialized banking products, such as loans and invoicing tools, to up-sell and better serve their customers.
A look at the companies demoing at FinovateEurope on March 22 and 23, 2022 in London. Register today and save your spot.
Partner HUB Ltd’sInvoice2RTP is a product that enables banks to painlessly onboard their corporate customers into the request-to-pay service using structured invoice data.
Features
Easy integration of corporate ERPs for onboarding into the request-to-pay service
Customizable user interface and backend and API layer to meet individual corporate needs
Why it’s great
Invoice2RTP eliminates the 80% of integration efforts by using already available invoice data structures. The product integrates invoice management, payment requests, and payments in one place.
Presenter
Katalin Kauzli, Co-founder, Business Development Director Kauzli is a Co-founder and Business Development Director of Partner HUB Ltd. She has been with the company since 2017 and is responsible for all business strategy, business development, and sales. LinkedIn
A look at the companies demoing at FinovateEurope on March 22 and 23, 2022 in London. Register today and save your spot.
From wealth aggregation to portfolio analysis, CIOS.Reporting from Fincite gives customers all their clients’ wealth data– prepared in an intuitive front end, including market data. Save up to 30 minutes for each report.
Features
Save up to 30 minutes for each report
Ensure fast identification of risks and potentials
Receive market data from Morningstar
Why it’s great
Fincite’s CIOS.Reporting offers best-in-class investment reporting for advisors and clients.
Presenters
Ralf Heim, Co-CEO & Founder Heim is a German technology entrepreneur and Founder of Fincite. Starting as a freelancer at the age of 16, Heim spent his career building analytical systems for companies as well as central banks. LinkedIn
Paul Kammerer, CCO Prior to joining Fincite as CCO, Kammerer was responsible for business development, product management and customer care for Rabobanks Retail Banking in Europe. LinkedIn
A look at the companies demoing at FinovateEurope on March 22 and 23, 2022 in London. Register today and save your spot.
Realmonitor reduces customer acquisition cost for mortgages and significantly lowers the bank’s exposure to the agent network by providing super early customer engagement.
Features
Significantly reduce customer acquisition cost
Provide early customer engagement and super sharp customer profiling
Reduce bank’s exposure to agent networks
Presenter
Peter Farago, CEO and Co-founder Farago has spent the last 15+ years in the bank and real estate industry covering several stages of the housing ecosystem. LinkedIn
American Express partnered with Delta Air Lines to offer American Express’ buy now, pay later tool, Plan It, as a payment option at checkout.
Plan It allows users to select from one to three repayment options and charges a fixed monthly fee.
Plan It will be added as a checkout option on Delta’s mobile app this spring.
American Express and Delta Air Linespartnered this week to offer their shared customers a buy now, pay later (BNPL) option when booking flights on Delta.com’s web interface.
The partnership, which leverages American Express’ Plan It tool, enables American Express U.S. consumer card members to split up purchases of over $100 into equal monthly installments with a fixed fee.
Launched in 2017, Plan It allows customers to select from one to three repayment options, depending on factors such as the purchase amount, the cardholder’s account history, and their creditworthiness. Plan It charges a fixed monthly fee that is disclosed before the transaction.
As an added advantage over other BNPL plans, Plan It is built into the American Express card and does not require users to enroll, plus cardholders earn rewards as they usually do with their card payment. Further, cardholders do not need to keep track of additional payments, since they are included in their monthly statement.
As Anthony Cirri, Executive Vice President for Global Consumer Lending and Cobrand at American Express highlighted, the timing of the partnership is ideal. “It’s the perfect time to bring these together as people are booking long-awaited trips, and our card members can book with confidence knowing they are backed by the strong partnership between Delta and American Express.”
Plan It has benefited from the rising popularity of BNPL and alternative payment options. The volume of new plans originated in the fourth quarter of 2021 was more than double the volume in the fourth quarter of 2020. And 65% of plans originated in the last year were from new users.
Travelers will see Plan It as a checkout option on Delta’s mobile app this spring.
Clients that use U.S. Bank’s prepaid Focus Card for payroll can offer their employees access to their wages as they earn them, thanks to a new partnership between U.S. Bank and Payactiv.
Employees will not only benefit from early access to their wages, but will also have access to Payactiv’s other financial wellness tools.
“We’re proud to be on the leading edge, developing a solution that helps our business clients provide additional convenient options for their employee payroll,” said U.S. Bank Payment Services Vice Chair Shailesh Kotwal.
U.S. Bank is partnering with financial wellness company Payactiv this week. Under the agreement, U.S. Bank will leverage Payactiv’s earned wage access (EWA) tools.
U.S. Bank’s commercial clients that use U.S. Bank’s prepaid Focus Card for payroll can enable their employees to access a portion of the wages they’ve already earned. Employees can access their funds on their U.S. Bank Focus Card, via an instant deposit into their checking account, or other payment options.
In addition to benefitting from early payouts, employees will have access to other financial wellness services such as savings and bill management tools, financial education, and a discounts marketplace.
“The future of payments is one where companies may soon say goodbye to the traditional, biweekly payroll,” said U.S. Bank Payment Services Vice Chair Shailesh Kotwal. “Employers recognize that providing employees on-demand access to earned wages improves employee satisfaction and recruiting efforts. We’re proud to be on the leading edge, developing a solution that helps our business clients provide additional convenient options for their employee payroll.”
Payactiv was founded in 2011 to help companies send their employees their wages as they earn them, as opposed to bi-weekly. “We provide timely access to liquidity – so a single mother can pay for daycare between paychecks and a healthcare worker can cover an unexpected car expense,” explained company CEO Safwan Shah.
California-based Payactiv has raised $134 million in funding and earned a Best of Show award for its 2016 demo. In 2020, the Consumer Financial Protection Bureau (CFPB) approved Payactiv’s EWA program as exempt from the federal Truth in Lending Act and Regulation Z rules governing creditors. “Employers can take comfort in knowing that PayActiv continues to be the leader in responsible EWA for employees,” Shah said at the time.
When your day job keeps you busy for 40+ hours per week, it’s hard to take on new tasks or pay attention to new initiatives. But one thing 2020 taught us is that the digital initiative doesn’t take vacation days. So when enabling technologies and platforms like the metaverse come around, banks and fintechs need to pay attention.
First, let’s look at what the metaverse is and what it is not. You can think of the metaverse as immersive, collaborative internet. In some respects, the metaverse is already here. Users are already collaborating with each other on multiple platforms, and alternate realities– whether in 2D or 3D– have been around for decades. However, though the metaverse will be accessible via virtual reality, it is not the same as virtual reality.
The metaverse is at an early stage and is still not well defined. Despite this, banks and fintechs still need to be paying attention. Here’s why.
It’s not the first time fintech has tried to embrace a different reality
In 2014, many fintechs and even some established financial services companies launched mixed reality experiences in the form of Google Glass, which was released to the public in May of 2014. Top Image Systems (now Kofax), Fiserv, eBankIT, and Wallaby Financial (now Bankrate) all released tools for Google Glass in 2014.
Most are familiar with the fate of Google’s mixed reality glasses– they were discontinued in 2015. The failure of Google Glass is not the point, however. What matters is the speed at which this group developed around the new technology. We can expect the same for the metaverse.
You’re already behind
It’s easy to sleep on trends that seem like they are nothing but hype. Despite that, if you’ve been sleeping on this trend, you’re already behind. JP Morgan announced yesterday that it has joined the metaverse by opening a virtual lounge. Located in Decentraland, JP Morgan’s Onyx Lounge shows a timeline of the bank’s blockchain innovations, has three videos to watch, and has a tiger walking around.
The bank also released a white paper on opportunities in the metaverse. “There is a lot of client interest to learn more about the metaverse,” JPMorgan’s Head of Crypto and the Metaverse Christine Moy told Coindesk. “We put together our white paper to help clients cut through the noise and highlight what the current reality is, and what needs to be built next in technology, commercial infrastructure, privacy/identity and workforce, in order to maximize the full potential of our lives in the metaverse.”
In five years, you’ll wish you had paid attention
If there’s nothing to the metaverse right now, why bother paying attention? Because five years from now you’ll wish you had been paying attention.
While it’s easy to say that about any risk-laden investment such as real estate or tech stocks, you can consider the example of cryptocurrency. What if your organization had been investing in crypto research five years ago? You may have already been leveraging the benefits of stablecoins or smart contracts. The metaverse is just one more way to invest in the future of your organization.
Metaconomy
One very attractive aspect of the metaverse is that it is intertwined with the blockchain. In the metaverse, digital assets will be exchanged for digital currencies in a new economy. There is even speculation that work will take place in the metaverse. According to JP Morgan, $54 billion is spent on virtual goods each year and NFTs have a current market capitalization of $41 billion. Banks won’t want to be left out of this new metaconomy.
It’s where you’ll find your next clients
Generation Z* and Generation Alpha** are not only digital natives, many of them are mixed reality natives. They’ve grown up with virtual reality headsets and spend hours a day in parallel universes such as Fortnite. To capture the attention of this group, there is no doubt that financial services companies will need to meet these young clients where they are.
If JP Morgan’s bet on Decentraland is any indication, banks and fintechs should start planning their first move in the metaverse. However, as Cornerstone Advisors’ Alex Johnson recently pointed out, they may want to hold off on building their first bank branch in the metaverse.
