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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
FinovateSpring 2023 is in the books! Congratulations to the winners of Best of Show, and thanks to the hundreds of fintech and financial services professionals whose passion and enthusiasm continue to make our conferences such unique and rewarding experiences.
Do you have a favorite moment from FinovateSpring 2023? Was it Dan Latimore of Celent and his creative deployment of generative AI during the Analyst All-Stars presentations? Maybe it was Peggy Mangot of JP Morgan who led a Power Panel full of diverse insights on where the smart money is investing in fintech. How about the first-ever company to begin its Finovate demo with a song performed live on stage?
Whatever moment of FinovateSpring was your favorite, there were plenty of good times and great networking opportunities to go around. Check out this review from Finovate Senior Research Analyst Julie Muhn who compiled her top seven takeaways from the event.
And stay tuned to the Finovate blog where we’ll soon share demo videos from the conference, as well as one-one-one video interviews, testimonials, our event e-magazine, and more!
Conversational AI platform company Kore.ai announced a strategic partnership with IT solutions provider Mphasis.
The partnership will enable Mphasis to help its enterprise clients transform customer experience management and employee engagement.
Kore.ai demoed its technology at FinovateFall 2022 in New York last September.
IT solutions provider Mphasis and enterprise conversational AI platform company Kore.aihave forged a new strategic partnership. The alliance will enable Mphasis to offer new customer experience management and employee engagement solutions to its enterprise clients.
“Conversational AI solutions are leading the way in which enterprise clients are interacting with their end customers,” Mphasis CEO and Managing Director Nitin Rakesh said. He referred to Kore.ai as an “undisputed leader in the space” and said that the company’s generative AI solutions will complement Mphasis’ product engineering capabilities. Rakesh also added that Kore.ai would benefit from cross-selling opportunities “particularly in the contact center transformation space.”
Kore.ai helps enterprises automate their business and voice and digital interactions. The company’s Experience Optimization (XO) platform enables companies to design, build, test, and deploy conversational user interfaces and virtual assistants without requiring technical expertise or support. The technology uses generative AI and large language models (LLMs) to create and deploy intelligent conversational experiences for the benefit of customers, contact center workers, and employees alike. Additionally, the platform supports cloud, on-premises, and hybrid deployments for more than 40 channels in 120+ languages. More than 200 Global 2000 companies leverage Kore.ai’s XO platform and solutions to automate their interactions and processes.
“We automate billions of interactions every year through out conversational AI platform and solutions and have already delivered an estimated $1 billion in cost savings to global enterprise customers,” Kore.ai CEO and founder Raj Koneru said. “Together we will accelerate innovation and drive growth,” Koneru said, “providing exceptional solutions and experiences to our customers.”
Kore.ai’s partnership with Mphasis comes just a few weeks after Kore.ai announced a collaboration with digital solutions company Ciklum. The firm will leverage Kore.ai’s technology to build advanced virtual assistants. These solutions will be deployed in use cases ranging from customer experience to enterprise automation. “This partnership will enable businesses to radically transform their customer and user experiences and provide more human-like interactions,” Ciklum VP and Global Head of Intelligent Automation Gourav Datta said.
Founded in 2014 and headquartered in Orlando, Florida, Kore.ai has raised more than $73 million in funding. The company’s investors include NVIDIA, Vistara Capital Partners, PNC, and Sterling National Bank. This year, Kore.ai was named a leader in 2023 Gartner Magic Quadrant for Enterprise Conversational AI Platforms. Kore.ai made its Finovate debut in 2021 and returned the Finovate stage the follow year for FinovateFall 2022.
Agent IQ secured a strategic investment from the Bankers Helping Bankers Fund (BHB Fund).
The digital customer engagement innovator demoed its technology at FinovateFall 2022 in New York.
The BHB fund launched in 2022 to give community banks wider exposure to a range of innovative fintechs.
Terms were not disclosed. But the Bankers Helping Bankers Fund (BHB Fund) made a strategic investment in digital customer engagement solutions provider Agent IQ this week. The capital adds to the $18.5 million in equity funding Agent IQ has raised via previous seed and Series A rounds.
“This investment is representative of Agent IQ’s commitment to helping FI’s foster deep and meaningful customer relationships while also meeting the digital demands of today’s customers,” Agent IQ CEO and co-founder Slaven Bilac said in a statement.
Agent IQ offers an AI-enabled solution, Lynq, that improves communication between financial institutions and their customers. The platform enables customers to make basic queries, such as requesting a routing number, as well as more sophisticated requests, such as help in depositing a check. Lynq also allows customers to speak with a human agent at any point in time during the engagement. Via a “banker carousel” with brief bios and profile pictures, Lynq customers can choose and engage with a personal banker to quickly find the human assistance they need.
FIs using Agent IQ’s technology have reported a reduction in call center volume of 29%. Additionally, these customers also have noted that Lynq’s configurable, self-service technology is handling more than 80% of incoming conversations.
Left to right: Soren Bested (COO) and Matt Phipps (CMO) of Agent IQ at FinovateFall 2022.
“Our team looks forward to empowering more community banks with data-driven technology and the ability to allow relationship banking to thrive in the digital world,” Bilac added. “We are excited to be a part of the BHB Fund as the organization is helping more community banks overcome their shared challenges, operate more efficiently, and discover new sources of income.”
The BHB fund launched in 2022. Latitude38 Venture Partners manages the fund in partnership with IBAT Services, Inc. and banking market intelligence and advisory firm, FedFis. IBAT Services is a subsidiary of the Independent Bankers Association of Texas (IBAT). The goal of the fund is two-fold. First, the fund seeks to give community banks exposure to a range of fintech investments capable of boosting growth, improving efficiencies, and enhancing competitiveness. Second, the fund offers the potential for outsized venture capital returns uncorrelated to traditional bank operations.
Latitude38 Venture Partners Managing Partner Richard Leggett praised Agent IQ as an ideal fit for the fund’s investment thesis. In a statement, Leggett noted that it was important for community banks to leverage technology to drive digital engagement. Agent IQ, which most recently demoed its platform at FinovateFall last year, offers technology that does just that.
Agent IQ’s funding news comes in the wake of a major new hire. In April, Agent IQ appointed fintech veteran Ruthann Paulin Glyman as EVP, Head of Partnerships and Strategic Alliances. Glyman brings with her more than 15 years of financial services industry experience to the job. Previous to her move to Agent IQ, Glyman was Director of Sales at Array, another Finovate alum.
Agent IQ is headquartered in San Francisco, California. The company was founded in 2015.
Banking technology company Nymbus raised $70 million in Series D funding.
The round was led by Insight Partners. ConnectOne Bank and PeoplesBank also participated.
Nymbus introduced itself to Finovate audiences at FinDEVrNewYork in 2016. The company most recently demoed its technology at FinovateFall 2019.
Banking technology company NYMBUS has secured $70 million in new funding. The Series D round was led by Insight Partners, and featured participation from ConnectOne Bank and PeoplesBank. The Banc Fund Company and Mendon Venture Partners also participated.
The investment takes the company’s total capital raised to more than $199 million. Valuation information was not immediately available. Nymbus will use the additional capital to support expansion and further development of its core system and product portfolio.
“This latest round of financing positions the company to double down on our mission of bringing new thinking to financial institutions to help them thrive in an ever-evolving market,” Nymbus CEO and Chairman Jeffrey Kendall said. “These strategic investments are a testament to the confidence in Nymbus’ ability to transform the financial services industry by modernizing outdated legacy systems with proven technology and business models that result in growth for our current and future clients.”
Nymbus helps financial institutions successfully undergo digital transformation and offer new digital experiences to their customers. Solutions like Nymbus’ SmartLaunch enable financial institutions to launch a fully-operational digital bank in as few as 90 days. FIs can take advantage of these deployments without having to undergo a major transformation or calling in additional human resources. The company’s SmartCore, SmartDigital, and SmartPayments solutions provide financial institutions with modern core, payments, and digital banking solutions, respectively.
Among these institutions taking advantage of Nymbus’ technology is Arizona-based Vantage West Credit Union. The $2.6 billion financial institution partnered with Nymbus to launch a new niche financial brand in April. The previous month, Michigan State University Federal Credit Union worked with Nymbus to launch a pair of standalone digital brands – AlumniFi and Collegiate. AlumniFi provides financial wellness, debt management, and charitable donation tools to MSU alums. Collegiate brings digital banking services to MSU students, faculty, and staff.
“Nymbus is empowering credit unions to deliver growth models with the people, process, and technology needed to deliver digital financial services that complement their core business,” Nymbus CUSO President John Janclaes said.
Digital ID verification (IDV) innovator OCR Labs Global will begin the second half of 2023 with a new identity of its own. The company, which introduced itself to Finovate audiences at our developer’s conference, FinDEVrSiliconValley 2016, announced its rebrand as IDVerse this week.
In a statement, the firm noted that the new name and brand combine a set of key concepts – identity, universality, versatility, and diversity – that underscore the company’s priorities when it comes to developing digital ID verification technology. The rebrand also reflects the company’s growth, technological innovations in the field of identity verification, the evolving regulatory landscape, and mandates for greater financial inclusion.
“With OCR Labs we set out to develop an identity verification solution, from scratch,” company CEO Myers said, “The birth of IDVerse means we’re now ready to go to the next level to make user verification effortless with Zero Bias AI.”
IDVerse’s Zero Bias AI leverages generative AI to train deep neural network systems to guard against bias based on gender, age, and ethnicity. At the beginning of the year, the company announced that its technology had achieved non-bias certification from independent biometric testing laboratory BixieLab. The evaluation included male, female, and transgender subjects, aged 18 to 70 years old, from eight different ethnic categories. The test results revealed no demographic bias and a zero percent error rate for the company’s facial liveness detection solution. “The time has come to refocus efforts on achieving inclusivity to prepare for the future when more people than ever will use identity solutions for everything,” company General Manager International Russ Cohn said, “even ‘unlocking our car with our face’.”
Two months later, the company received certification from the U.K.’s Digital Identity & Attributes Trust Framework (DIATF). This gives the firm the right to serve employers, landlords, HR vetting firms, and other organizations as a compliant Identity Service Provider (IDSP). “Our Zero Bias AI technology eliminates barriers that lead to exclusion,” company Head of Legal, Risk, & Compliance Terry Brenner explained, “so that everyone has access to digital ID systems in society, such as recruitment and right to work, right to rent.”
In addition to the drive for financial inclusion and regulatory mandates, technological innovation is also playing a major role in the company’s transition to IDVerse. Founded as a research entity in 2014, the firm pioneered the deployment of optical character recognition and facial recognition to provide identity proofing and fraud detection on mobile and web platforms. The rise of technologies like synthetic media and generative AI have produced new challenges for fighting fraud. This has encouraged firms like IDVerse to embrace strategies such as identity orchestration that provide a coordinated fraud defense across the entire customer lifecycle.
Today, IDVerse verifies more than 16,000 identity documents in 220+ countries and territories. By matching people with their government-issued IDs, the company helps fight fraud and enables organizations to meet AML and KYC identity verification requirements.
Headquartered in London, Silicon Valley, and Sydney, IDVerse has raised $45 million in funding, according to Crunchbase. The firm’s investors include Equable Capital and OYAK.
I just returned from FinovateSpring, where I spent three days watching live product demos, listening to panels and keynote discussions, and shaking hands with new and old connections alike. As with all events, this one showcased new ideas. Unlike other events, however, this year’s FinovateSpring event signified a shift in the fintech landscape.
I’ve summarized this shift, along with other key themes presented, in seven key takeaways below.
Regulations are here
Pending regulations was a prominent topic at the event, extending beyond the crypto sector to include traditional finance. Despite many instances of regulatory oversight in the crypto sector over the years, last years’ FTX scandal was big enough to raise the red flag for regulators. Since then, traditional banks including Silicon Valley Bank and Cross River Bank have raised concerns about lack of oversight, and banking-as-a-service, respectively. Regulators are being held accountable, and their response to oversight issues is becoming increasingly important.
Fintechs and banks have shifted to consider regulation more heavily when and how they build products. Not only this, banks have also learned that they need to step up their due diligence before partnering with third party players.
AI is becoming table stakes
The integration of AI has moved beyond mere discussion and has become crucial for fintech firms. They now recognize the need to leverage AI across various aspects– including customer service, personalization, business intelligence, underwriting, and more– to stay competitive and meet customer expectations.
However, the good news is that it’s easier now than ever for firms to get involved with AI. We saw a few live demos at FinovateSpring that showcased accessible, no-code methods for firms to engage with AI. No developers? No problem.
The froth of 2019 is not coming back
The fintech industry has entered a new phase, and the environment of low interest rates and excessive fundraising we experienced from 2012 to 2019 is not sustainable. Firms must adapt to this new normal by focusing on unit economics and operational efficiency to ensure their survival, as down rounds and exits become more prevalent.
Things can only improve. Or will the slide continue?
On our Investor All Stars panel, the venture capitalists on stage expressed differing views on the market trajectory. Three out of four said that in their view, we are “bouncing around the bottom” of the downturn, and that things can only go up from here.
However, many folks I spoke with on the networking floor disagreed with the positive sentiment, and said they thought that the economy would see a downturn before things improve. Consumers are feeling the pain in their wallets, and the looming debt ceiling–as well as a spike in consumer debt– aren’t helping.
Beyond customer acquisition
Merely acquiring a large user base or having a unique product is no longer sufficient for fintech success. VCs and banks now require a clear monetization strategy and a focus on unit economics. Fintechs must demonstrate how their customer base supports their bottom line in order to attract investment and partnership opportunities.
Consolidation will continue
In both the banking and fintech sectors, we’ve seen an uptick in M&A activity. Some of these deals have been unexpected, like the case of Silicon Valley Bank’s collapse, for example. At the conference, there was much discussion about a potential shakeout in the fintech sector. Startups who are running out of funds and can’t renew a new round will either have to fold or be acquired. The neobank sector will also see a reckoning. Niche neobanks that have launched in the past four years will either have to find a way to mine value from an expanded user group or merge with like-minded fintechs.
Regulatory challenges with DeFi and crypto
Notably absent from the event’s discussions were decentralized finance (DeFi) and cryptocurrencies. In contrast to two years ago, when every session included a discussion about crypto, only a few presenters brought up the topic at last week’s event. The reason? Regulatory challenges.
Regulatory concerns have spiked due to the fallout from last year’s FTX scandal and other crypto collapses. Regulators fear loss of control with decentralized finance and lack understanding of the underlying mechanics behind crypto.
There’s still one more day to enjoy FinovateSpring. But as far as the live demo portion of our program is concerned, the Best of Show celebrations have begun. With that in mind, please join us in congratulating the winners of Best of Show at FinovateSpring 2023.
1Kosmos for its technology that automates user onboarding for workers and customers, protecting against stolen and synthetic identities while eliminating ATO and fraud. Video.
9Spokes for its technology that unlocks the potential of open data, giving financial institutions a powerful set of tools to engage business customers. Video.
Flybits for its personalization platform that enables financial institutions to deliver best-in-class personalized digital banking experiences. Video.
QuickFi for its 100% digital, self-service equipment financing platform that enables business equipment financing in minutes. Video.
SAVVI AI for its technology that helps any FinCo team build and deploy AI apps in minutes. No data scientists, pre-existing data, or custom infrastructure required. Video.
Wink for its biometric payments and identity platform that enables users to say goodbye to passwords and fraud – and say hello to secure and simple authentication. Video.
On behalf of the entire Finovate team, we want to thank all of our demoing companies, our partners, and our sponsors. We also want to express our gratitude toward our attendees in the fintech and financial services industry who bring so much positive energy to our events. We look forward to seeing you again next year right here in San Francisco for FinovateSpring 2024!
Notes on methodology:
1. Only audience members NOT associated with demoing companies were eligible to vote. Finovate employees did not vote.
2. Attendees were encouraged to note their favorites during each day. At the end of the last demo, they chose their six favorites.
3. The exact written instructions given to attendees: “Please rate (the companies) on the basis of demo quality and potential impact of the innovation demoed.”
4. The six companies appearing on the highest percentage of submitted ballots were named “Best of Show.”
5. Go here for a list of previous Best of Show winners through 2014. Best of Show winners from our 2015 through 2023 conferences are below:
In 2022, global fines for failing to prevent money laundering (AML) and other financial crime surged more than 50 percent, totaling more than $2 billion in the banking sector alone. With the ever-increasing complexity of AML regulations and the global nature of financial services, financial institutions are investing more resources into compliance and due diligence to protect their businesses.
Join us for an engaging conversation about the complexity of Know Your Business (KYB) and Know Your Customer (KYC) regulations and discover how a single, integrated identity platform can help streamline the process of truly knowing the entity and the people you are doing business with.
In this webinar, you will learn:
The latest trends in KYB and KYC and how to protect your business
How artificial intelligence can help streamline tedious, manual verification processes
New strategies for verifying people and businesses with an integrated identity platform
If you missed the keynote address from Sam Everington, CEO of Engine by Starling Bank at FinovateEurope earlier this year, here are some highlights that will make you feel as if you were in the room.
During his address titled, “From payments to core platforms: How can banks leverage data and technology to meet changing customer,” Everington relayed his experience at Starling Bank, detailing how the newcomer has remained competitive by using customer data in context to not only create a better user experience, but also cut costs.
Everington discussed the shifting expectations of consumers, who now anticipate a digital-first experience similar to those offered by big tech companies. Additionally, because customers seek fair, reasonably priced, and affordable services, in today’s current cost of living crisis, it is key that banks keep their costs low in order to retain consumers’ appetites.
Cost, in fact, was a big part of Everington’s keynote. He emphasized the potential cost savings for banks by increasing the use of technology and enhancing user experiences. He acknowledged that in the banking sector, technology is often viewed as a cost center and technology investments are primarily driven by cost reduction.
“In banks especially, technology and technology investment decisions are all about the business case,” Everington said. “Technology is a cost center to be controlled, and technology investment is by and large a cost reduction exercise.”
In his keynote, Everington identified real-time and flexible systems as essential elements needed to meet customers’ ever-changing financial situations, which can fluctuate multiple times a day. Banks need to proactively understand their customers, be aware of the products and services they hold, and respond promptly to any changes.
To address these needs, Starling Bank developed Engine, a technology platform that supports their operations. Engine offers flexibility, comprehensiveness, scalability, and reliability. These features not only enhance the customer experience but also ensure compliance with U.K. regulations.
Ultimately, Everington emphasized the importance of banks having an innovative platform that allows them to adapt and meet the evolving needs of their customers.
With FinovateSpring only days away (May 23 through May 25), this week’s edition of Finovate Global will showcase those innovators demoing at the event that are headquartered outside the United States.
There’s still time to register and join us in San Francisco, California for our annual Spring fintech conference. Visit our FinovateSpring 2023 hub today and get your ticket today!
9Spokes
Founded in 2012 and headquartered in New Zealand, 9Spokes unlocks open banking and data, giving financial institutions a powerful set of tools to engage SMB customers. LinkedIn.
FinTech Insights by Scientia
Founded in 2016 and headquartered in London, U.K., FinTech Insights by Scientia offers a competitive analysis tool for banks and fintechs to help them create compelling digital banking experiences. LinkedIn.
FINTEQ
Founded in 2017 and headquartered in Poland, FINTEQ removes credit risk from the supply chain, giving suppliers a healthy and sustainable trade finance alternative. LinkedIn.
Flybits
Founded in 2013 and headquartered in Toronto, Canada, Flybits offers a personalization platform that enables financial institutions to deliver best-in-class personalized digital banking experiences. LinkedIn.
Fundica
Founded in 2017 and headquartered in Montreal, Canada, Fundica is a government funding platform used by some of the largest financial institutions in North America to acquire clients at scale. LinkedIn.
Horizn
Founded in 2012 and headquartered in Toronto, Canada, Horizn helps financial institutions maximize the impact of digital and accelerate returns on digital investments with customers and employees. LinkedIn.
HyperSwitch
Founded in 2022 and headquartered in India, HyperSwitch is an open source payments switch designed to make payments fast, reliable, and affordable. LinkedIn.
Kani
Founded in 2018 and headquartered in Newcastle, U.K., Kani offers end-to-end reconciliation and reporting, automating the back office for payments companies and fintechs, and ensuring accuracy and compliance. LinkedIn.
Lucinity
Founded in 2018 and headquartered in Reykjavik, Iceland, Lucinity combats financial crime with innovative GenAI technology for smarter and faster FinCrime compliance. LinkedIn.
PayTic
Founded in 2020 and headquartered in Charlottetown, Canada, PayTic is a SaaS platform that automates and manages all key aspects of program management: network fees, reconciliation, reporting, and fraud. LinkedIn.
SESAMm
Founded in 2014 and headquartered in Metz, France, SESAMm specializes in big data and artificial intelligence, providing analytics from more than 20 billion articles and messages using NLP. LinkedIn.
Here is our look at fintech innovation around the world.
Real estate-focused insurtech Obie announced it received $25.5 million in funding.
The Series B investment brings Obie’s total raised to $39 million since it was founded in 2017.
Obie’s embedded insurance tool helps change the way insurance for landlords and real estate investors is bought and sold.
Insurtech company Obieannounced a Series B round today. The company will use the $25.5 million investment to help change the way insurance for landlords and real estate investors is bought and sold.
Today’s round brings Obie’s total equity raised to $39 million, following the $10.7 million the company raised in its 2021 Series A round. Battery Ventures led the investment, which also saw participation from Brick and Mortar VC, DivcoWest, and real estate funds and investor groups.
“We’re excited to have the ongoing support of our investors as we continue to build insurance products that drive efficiency and change the way insurance is bought and sold,” said Obie Co-founder and CEO Ryan Letzeiser. “This funding supports the future of embedded insurance, as we expand our partnerships across industries and offer additional insurance products to clients.”
Obie was founded in 2017 to improve the way insurance was bought and sold in the real estate investing industry by launching an embedded insurance option. The company’s embedded insurance solutions underwrite investors by pulling more than 1,000 data points from multiple databases. Additionally, it creates a better user experience by offering instant, bindable quotes via its partner platforms, such as Baselane, Awning, and Marketplaces Homes.
Obie has grown 300% over the past two years. And with 18 million real estate investors across the U.S., the company expects to continue that trajectory. Earlier this month, Inc. Magazine named Obie to its 2023 Best Workplaces List.
Payroll connectivity platform Argyle announced that it has onboarded more than 35 new customers year over year.
The New York-based company also unveiled the latest edition of its platform, Argyle 2.0.
Argyle made its Finovate debut last May at FinovateSpring 2022.
Payroll connectivity platform Argyle is crediting its new customers – more than 35 of them – for doubling the number of customer verifications the company has facilitated year over year. The announcements from the New York-based firm arrive as the company unveils the latest edition of its technology, Argyle 2.0.
“We’ve packaged five years of learning and innovation into our next-gen platform to continue automating critical workflows, reducing business risk, and providing exceptional experiences,” Argyle founder and CEO Shmulik Fishman said. “The growth of our company over the past year echoes the demand for real-time access to reliable, direct-source data.”
Argyle offers businesses direct-source data portability tools for mortgage, lending, banking, background, and tenant screening, among other use cases. With Argyle 2.0 the company seeks to change the way businesses are able to retrieve and use income and employment data – a key factor in expanding access to financial services. Lake Michigan Credit Union VP of Mortgage Strategy John Harpst praised the company’s technology for its ability to provide “a complete picture for the member without the concern that we missed important information that could affect the outcome of their loan approval.”
Argyle’s new platform also features updates to Argyle Link, Console, and API. Argyle Link is the platform’s front-end interface which enables consumers to connect their accounts and share income and employment data with service providers in real-time. Argyle Link also supports the manual upload of income documents. The company notes that it covers more than 210 million U.S. consumers and 95% of Fortune 1000 companies. This enables Argyle to achieve a verification “hit rate” that is 5x better than other solutions.
Founded in 2018, Argyle made its Finovate debut at FinovateSpring 2022. At the conference, company co-founder and COO Billy Marsden demoed the latest design update of Argyle’s platform. The redesign helped increase transparency, decrease drop-off rates, and improve the overall look at feel of the technology for end users.
Argyle has raised more than $77 million in funding, according to Crunchbase. The company’s investors include Bain Capital Ventures and Checkr.
