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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A look at the companies demoing at FinovateFall in New York on September 12 and 13. Register today and save your spot.
Cable was founded in 2020 to provide automated assurance of financial crime controls, enabling real-time, continuous monitoring for regulatory breaches and control failures across all of a business’ accounts.
Features
Reduces remediation projects with real-time regulatory breach or control failure detection
Automates and centralizes partner bank oversight of fintech partners
Increases ROI of other compliance tools
Why it’s great
Why manually test 100 accounts when you can automatically monitor 100%? Scale efficiently and compliantly with Cable by ensuring your controls’ effectiveness as you grow.
Presenter
Natasha Vernier, CEO Before founding Cable, Vernier was Head of Financial Crime at Monzo Bank, one of the first UK fintechs to become FCA-authorized and regulated. LinkedIn
Truework has raised $50 million to bolster its income verification product.
The Series C round brings Truework’s total funding to $95 million.
G Squared led the round, which the company plans to use to grow its business “through instant, accessible, and accurate consumer data.”
Income and employment verification startup Truework is taking on an extra $50 million in capital today in a Series C round. When added to the $45 million in funding the California-based company has raised since it was founded in 2017, Truework’s total funding now reaches $95 million.
The round was led by G Squared; with contributions from existing investors Sequoia, Activant, and Khosla Ventures; as well as new investors Indeed, Human Capital, and Four Rivers Group. “Support from these incredible teams inspire[s] us to keep building the future of financial identity, and is bolstered by our continued focus on promoting transparency and data ownership for consumers,” the company said in a blog post.
Truework’s goal is to change the way consumers’ personal information is shared during life events such as a home purchase or getting a new job. The company has built a network for verified identity that places the consumer in control of their data by offering them the decision when to share their information and when to withhold it.
Truework anticipates it will power more than 12 million income and employment verifications by the end of this year, which will service more than 20,000 small businesses and 100 enterprises. The company will use today’s investment to help customers grow their businesses “through instant, accessible, and accurate consumer data.”
Last year, Truework launched a few new offerings, including Payroll NetworkPreapprovals, and Credentials. The Payroll Network tool offers consumers visibility into and control over how their data is being shared with third parties and also enables consumers to generate their own employment verification letters. The Pre-approvals product offers lenders more accurate underwriting and increased conversions, while the Credentials tool allows applicants to instantly and directly share their payroll data in their loan application.
“Truework is putting millions in control of their data and streamlining the lending process for both lenders and borrowers,” the company said in a blog post announcement. “Building the future with a consumer first mindset goes into every decision we make, and Series C funding will help us further empower both sides of the verification equation to help build a more efficient, secure, and stable credit system.”
We’re more than halfway through the year, and before you know it, we’ll be publishing trends predictions for 2023. However, a lot can happen over the course of five months, so we’ve decided to examine what to look for and what you can expect in fintech between now and the new year.
Beginning the era of “neo super apps”
Over the past year, there has been much debate on whether or not the U.S. and Europe will ever have a super app. Plaid CEO Zach Perret takes a different angle on this. He is expecting “neo super apps” to rise in popularity.
“Within lending, brokerage, and banking, super apps will emerge, adding every bit of functionality within financial services. Over time, they’ll actually be able to add in things that are above and beyond financial services,” said Perret in a Plaid report.
Accelerating M&A activity
It’s no secret that fintech funding is down, especially in later stage deals. Because of this, some fintechs have been driven to sell sooner than they had hoped. As for acquirers, many are looking to cash in on the “neo super app” trend by adding to their firm’s expertise, bundling multiple services into a single offering. In the first half of the year, we have seen an increase in M&A activity over 2019 levels, and we expect that to continue into the second half of the year.
Ramping up a focus on ESG
Fintech companies and traditional financial institutions alike have sharpened their focus on ESG initiatives in the past couple of years. And while climate change may be enough of a reason for firms to implement new ESG practices, the SEC is giving laggards an incentive to step up their game. The commission recently proposed amendments to rules and reporting forms to promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of ESG factors.
Increasing solutions surrounding consumer credit
After dipping in 2020, Americans’ credit usage is now on the rise. Inflation, and especially the increase in costs of everyday expenses such as housing and gas, is prompting higher credit usage while consumers iron out their budgets and adjust their lifestyles to fit the extra expenses.
Dwindling conversation around digital transformation
We have finally arrived at the moment when digital offerings have become the rule, not the exception. While we can still expect to hear the phrase “digital transformation,” it is becoming less and less common.
More discussion around Central Bank Digital Currencies (CBDCs)
The progress toward CBDCs has been slow, but steady. Currently, 10 countries have fully launched a digital currency and more than 105 countries are exploring them. Just two years ago, only 35 countries were considering a CBDC. This digital currency race will only become more heated as more countries seek to be among the first to offer a CBDC.
Growing competition in alternative business payments solutions
After launching just five years ago, Brex has quickly risen to become one of the most successful fintechs, boasting a valuation of $12.3 billion. The startup is a super app for businesses, offering companies credit cards and cash management solutions.
At three years old, Brex’s competitor Ramp isn’t too far behind. The company is valued at $8.1 billion. Clearly, these companies are filling a need for businesses that has not previously been met. We can expect others to follow their footsteps to cash in on the gold rush.
BNPL takes a backseat
It’s no secret that BNPL payment schemes are causing cash flow difficulties for younger, less financially savvy consumers. Many are finding it difficult to keep up with the repayment obligations. This, combined with a lack of regulatory oversight, is tarnishing BNPL’s reputation.
We can expect to see a slowdown in BNPL newcomers, though I do think we’ll still see more large firms add BNPL schemes to their existing offerings.
Subsiding talent acquisition
A year ago, the workforce shortage was taking its toll on the fintech industry and we were discussing strategies to acquire new employees. After the economic sedation started this spring, however, this discussion has slowed. Startups have started to worry about burn rate and corporations have shifted their focus to their bottomline, which has already resulted in layoffs. With VC funding down, we can expect to see a continuation of this decline in the next five months.
Providing everything-as-a-service
These days companies can fill holes in their offerings by purchasing just about anything as a service, including ESG-investing-as-a-service, credit-cards-as-a-service, accounting-data-as-a-service, and more. As banks, startups, financial services, and even non-financial players seek to build up their customer base and play into the “neo super apps” trend Perret discussed, we can expect to see even more companies take the “-as-a-service” model to increase their customer base.
Tax compliance firm Avalara has agreed to be acquired by Vista Equity Partners for $8.4 billion.
Avalara has more than 30,000 customers in 95 countries.
The transaction will take Avalara private, removing it from the New York Stock Exchange.
Avalara is starting the week with a big move. The tax compliance firm has agreed to be acquired by global investment firm Vista Equity Partners for $8.4 billion. Vista Equity Partners is acquiring Avalara at $93.50 per share, which represents a 27% premium of Avalara’s closing share price on July 6, 2022.
Founded in 2004, Avalara helps its more than 30,000 customers in 95 countries comply with tax regulations. The Washington-based company offers compliance solutions for various transaction taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. In addition to tax compliance, Avalara also helps companies secure business licenses and provides sales tax data analysis that offer business insights. Among the company’s clients are Zillow, Pinterest, and Roku.
“Avalara is a mission-critical platform serving customers in a variety of end-markets, including retail, manufacturing, hospitality, and software,” said Vista Equity Partners Managing Director Adrian Alonso. “Avalara’s solutions, its commitment to product innovation, and its network of extensive partner integrations, resellers, and accountants make it a true leader in the space.”
Once complete, the transaction will take Avalara private, removing it from the New York Stock Exchange. Prior to going public in 2018, Avalara had raised $341 million. Scott McFarlane is co-founder and CEO.
Denver, Colorado-based PayOps innovator Infinicept unveiled its open payment operations solution, Infiniport.
The new offering will support orchestration between multiple processing platforms, enabling businesses to “bring their own processor” (BYOP) to their payments operations.
Infinicept secured $23 million in new funding this spring in a round co-led by SVB Financial Group and Piper Sandler Merchant Banking.
PayOps innovator company Infiniceptlaunched its new open payment operations capability, Infiniport. The new offering gives customers the ability to interface with the processor or alternative payment rail of their choice, enabling companies using embedded payments to “bring their own processor” (BYOP) to their payments and business operations.
Infiniport will help support orchestration between processing platforms, which is essential for businesses that rely upon more than one payment processing relationship. The new offering from Infinicept means that companies will no longer be forced to choose between the cost and inflexibility of having a sole provider on the one hand, and building their own embedded payments platform on the other. Instead, Infiniport provides a universal platform giving firms the ability to work with a variety of payment processors, gateways, terminal providers, token solutions, and more.
“Infiniport is part of our vision to help the payment ecosystem avoid lock in and choose the right combination of solutions which best support their business needs,” Infinicept co-founder and co-CEO Deana Rich explained. “Most off-the-shelf payments solutions come with trade-offs, but Infinicept is focused on allowing customers to keep their payments revenue, ownership of their data, and control over their payments product and ultimately the customer experience.”
Among Infiniport’s features are compatibility with any gateway, terminal, orchestration solution, across any processor; standardized fee management and settlement operations across multiple processor relationships; and a one-to-many capability to operate and manage payments with any processor. The offering also enables companies to mix and match payment types, processors, and payout vendors.
Infinicept’s new product announcement comes as the company acknowledges a 1,400% increase in payment volume since 2020. A major player in the embedded finance market, more than 300 software companies are served either directly by Infinicept or through its banking and payments customers. Headquartered in Denver, Colorado and founded in 2011, Infinicept secured $23 million in new funding in May. The investment was led by SVB Financial Group and Piper Sandler Merchant Banking and featured participation from existing investor MissionOG and others. The company said that it will use the capital to further develop its PayOps technology, pursue market expansion opportunities, and invest in ways to continue supporting embedded finance.
This is a sponsored post by Ann Kuelzow, Global Head of Financial Services at InterSystems.
A staggering 86% of financial services firms globally are concerned about using data to drive decision-making within their organizations, according to the latest research from InterSystems of 554 business leaders within financial services companies, including commercial, investment, and retail banks, across 12 countries globally. This lack of confidence largely stems from an inability to access data from all the needed sources and the time taken to access data. Given the wealth of data financial services firms have, this is a major concern, with the potential to open organizations up to risk and severely impede key business initiatives. In fact, more than a third of firms in the survey cite the primary impact of these challenges as being difficulty in gaining a 360-degree picture of customers.
As competition intensifies within the financial services sector, customer 360 is something that all firms must confidently be able to obtain. Doing so will empower firms to provide clients with the products, services, and hyper-personalized, real-time experiences they have come to expect across all aspects of their lives. But this relies on gaining access to accurate, consistent, and real-time data encompassing all touchpoints. Consequently, firms must first address underlying issues with their data architecture.
Solving data challenges
Gaining a holistic view of the customer requires firms to pull together all available information on each customer. As customers are likely to interact with a variety of different departments and personnel within the firm, this information can be spread across multiple systems and silos, including trading, savings, credit cards, loans, insurance, CRM, support, data warehouses, data lakes, and other applications and silos, as well as data from external sources and suppliers. The data is often in dissimilar structures and formats and follows different naming conventions and metadata. Therefore, making sense of this dispersed data typically requires significant effort and expense, and using it to make informed, accurate, and fast decisions is a major challenge.
As organizations look to solve these problems, data fabrics, a next-generation architectural approach, have emerged to provide financial services firms with a way to speed and simplify access to data assets across the entire organization. It does this by connecting to existing systems and data silos containing relevant data, both inside and outside the organization, and ingesting the relevant data on demand as it’s needed. It accesses, integrates, and transforms the data as it’s being requested, providing a real-time, consistent, harmonized view of the data from different sources, all from a single view. This allows firms to gain a complete 360-degree view of the customer.
Going a step further
A smart data fabric takes this approach a step further by providing built-in analytics capabilities which enable business users to understand customer behaviors and actions better and even to predict the likelihood of future behaviors, such as purchase of new services, churn, or response to targeted offers. It also provides the business with self-service analytics capabilities, so line-of-business personnel can drill into the data for answers without relying on IT, eliminating the usual delays associated with adding custom requests to the IT department’s queue.
This next generation approach also helps solve latency issues, as smart data fabrics lets the data reside in the source systems, where it’s accessed on demand, as it’s required.
Adopting this approach will help to restore firms’ trust in their data, ensuring that they can quickly access consistent, reliable, and accurate information on which to base decisions, fuel data initiatives, and build up a comprehensive view of the customer.
Elevating the customer experience
Being able to leverage the wealth of customer data inside and outside of the organization for customer 360 will empower firms to offer a vastly improved customer experience. For instance, with a single view of the customer, advisors, help desk, and support teams will be able to provide customers with the immediate answers and recommendations and thereby enhance their interactions with the organization.
Armed with customer 360, firms will also be able to increase revenue streams by predicting customer behavior to maximize cross-sell and up-sell opportunities. For example, incorporating and analyzing dozens of data points from different systems enables firms to determine which customers are likely to respond to a premium credit card offer and least likely to default on payments. This allows firms to identify which customers to target with particular offerings and services. Similarly, firms will be able to predict which customers are at risk of churning and take appropriate corrective actions in advance to reduce churn.
Together, these capabilities will help to elevate the experience and services being offered to customers, while also helping financial services firms to create and cement a competitive edge.
Restoring trust in data
Ultimately, by adopting smart data fabrics, firms will be able to overcome the data challenges that are currently preventing them from using their data to make better decisions by leveraging a more complete and more current 360-degree view of each and every customer. With a complete and trusted 360-degree view of the customer, firms will be in a strong position to fuel new customer initiatives, enhance the customer experience by delivering cohesive and personalized interactions and offerings across departments, and set their institution apart.
This week’s edition Finovate Global is an interview with Abdulla Almoayed, founder and CEO of Tarabut Gateway. Founded in 2017 and headquartered in Dubai, Tarabut Gateway is the first and largest regulated open banking platform in the MENA region. The company enables secure and friction-free data flow and connectivity between banks and fintechs in its regional network, leveraging its universal APIs to bring the benefits of open banking to financial services consumers in Bahrain, the UAE, KSA, and elsewhere.
We caught up with Abdulla Almoayed to learn more about Tarabut Gateway, its role in driving open banking and fintech innovation in MENA, and what we can look forward to from the company in the future.
How strong is the Open Banking trend in the MENA region?
Abdulla Almoayed: While the Gulf region might have been slower to adopt Open Banking than some Western countries, such as the U.S. and U.K., the fintech ecosystem in MENA is developing rapidly and has the potential to leapfrog other regions. Open Banking is a relatively new phenomenon globally, but there is great interest around it in our region and especially in the Gulf states.
Open Banking in MENA is highly driven by forward-looking regulators that are setting implementation plans in motion. This trend is also driven by increased consumer demand for personalized products and services – a pattern of consumption consumers have come to expect from the Netflix/Amazon experience, i.e. product recommendations based on consumers’ wants and needs.
Financial apps and products providing an enjoyable user experience are at the centre of this personal finance revolution. Improved financial literacy has caused customers to research and test more before deciding which financial product or service to use, while entrepreneurs and regulators have been motivated to spearhead change.
Using insights from data to create individually tailored products prioritizing an optimal, overall customer experience, Open Banking helps transform traditional one-size-fits all financial products into more intuitive financial products experiences. Through Open Banking, the consumer gets a new level of control, far in excess of today’s standard because traditional banks’ internal systems hoard valuable, personalized data about consumers. With Open Banking, consumers regain ownership over their personal financial information.
What are the forces that are driving open banking in the area?
Almoayed: The compelling combination of customer demand, progressive regulators, and entrepreneurial ambition is driving Open Banking. The resulting technology provides vastly increased transaction speed and the capability to manage personal finances like never before.
Internet connectivity across the MENA region has increased rapidly in recent years, covering potentially 93% of the population, or 580 million people, according to telecommunications association GSMA. Smartphone penetration is estimated to reach 80% in 2025, and over 90% in GCC countries.
MENA’s young and tech-savvy population is still underbanked, and a driving factor behind Open Banking’s growth are companies and regulators who are keen to facilitate this huge opportunity in a responsible manner.
Moreover, banks in the region understand the benefits that Open Banking brings to their institutions. Open Banking enables them to stay relevant and to compete in today’s banking sector by providing enhanced digital offerings and customer-centricity.
Tarabut Gateway acts as the matchmaker between service providers and customers, creating a competitive fintech ecosystem where users receive the best, personalized products, and services.
How has Tarabut Gateway become a major player in MENA-based open banking?
Almoayed: Tarabut Gateway was launched in 2017 and our mission is to provide the Open Banking infrastructure for the entire region; growing an Open Banking ecosystem to benefit consumers, start-ups and legacy financial institutions.
Having graduated as the first company from Bahrain’s Open Banking sandbox program, our pioneering product offering made Tarabut Gateway’s rapid expansion possible. Not only did we enter the UAE market and become the first licensed Open Banking service provider, but also we have established partnerships with major KSA banks to participate from the start in the Kingdom’s fast-moving fintech sector development.
The Middle East’s financial services industry is just beginning to implement many of the personalized services new technologies and regulation make possible. Tarabut Gateway is at the forefront to fill these gaps, offering Open Banking APIs to support banks, fintechs, and third-party service providers (TPPs) in creating new products and services. Fintech sector growth has been stunning in recent years, and is still on an exponential path. Currently, there are approximately 500 fintechs in the region.
This has been a big year for Tarabut Gateway. What accomplishments stand out to you the most this year?
Almoayed: The major milestones achieved in 2022 – the launch of the Open Finance Lab in partnership with Dubai International Financial Centre (DIFC), Open Banking license in the UAE, KSA bank partnerships, and newly appointed leadership roles – are all of great importance and reflect the different frontiers we are pushing as a company.
Open Finance Lab is an initiative led by DIFC. Tarabut Gateway was selected as the platform partner for the program. The Open Finance Lab is a 6-month program that will educate and engage banks, regulators, and the industry to showcase and shape the positive impact of Open Finance on the economy
To be acknowledged by the Dubai Financial Services Authority with the country’s first Open Banking license, including regulation as Account Information Service Provider and Payment Initiation Service Provider (AISP/PISP), is a symbol of our role as an ecosystem enabler.
Growing deeper roots in KSA’s market by being the fintech player with the largest, and most developed, network of partnerships validates our mission – to sit at the junction between regulators, banks, fintechs and TPPs.
Finally, the appointment of Nino Ocampo (CPO) and Adnan Erriade (CCO) further established Tarabut Gateway as international challenger, and points towards our role as a regional leader interacting with the global fintech revolution. We have attracted some of the most achieved Open Banking professionals, from leading organizations like HSBC, OpenWrks, and TrueLayer to join our team and contribute to our vision for Open Banking in the MENA.
What is something about fintech in the MENA region that many of those unfamiliar with the region would find surprising or interesting?
Almoayed: An organic driver of fintech growth across MENA is the large number of underserved customers. MENA’s population is double that of Europe – but the region has fewer banks than Germany alone! Reaching out to the underserved and underbanked is the greatest challenge, but one of today’s most rewarding business and investment opportunities.
Unsurprisingly, developed Western markets, especially the U.S. and U.K., had a considerable head start in all things Open Banking – i.e., number of startups, amount of funding and regulation.
However, most observers underestimate the i) velocity of MENA’s regulator-led fintech sector growth during the last years, ii) the region’s demographic advantages, entrepreneurial culture, and business-friendly environment, and iii) the “second mover advantage” of designing Open Banking frameworks utilizing experiences made in pioneering developed markets.
Taken together, we think some MENA jurisdictions could leapfrog Western Open Banking development, especially with a stalling regulatory environment in the European Union.
Working closely with regulators and banks, Tarabut Gateway provides the groundwork for a thriving fintech ecosystem. Nimble fintech companies fill the gap left by traditional banking and complement the existing system. KSA, UAE, Bahrain, and even Oman and Egypt are rolling out far-sighted regulatory regimes and providing incentives to develop and implement ‘enabling’ technologies such as banking APIs.
What are some of Tarabut Gateway’s top priorities over the balance of this year and into the next?
Almoayed: This year, the Saudi Central Bank (SAMA) plans to go live with its Open Banking framework – part of the Kingdom’s “Vision 2030.” With “Fintech Saudi,” a strong platform was created to support Saudi fintech entrepreneurs and the number of fintech start-ups in the KSA increased 37% to 81 during 2021.
We are at the forefront of Open Banking progression in KSA, and it is a priority for us to support the country’s economic policy as Open Banking infrastructure provider benefitting Saudi consumers, merchants, banks and fintechs.
Our recently announced participation in the Dubai International Financial Center’s Open Finance Lab is an important step towards our exploration of Open Finance solutions – the idea of integrating even more areas of traditional finance in an Open Data framework, for example pensions, mortgages, loans, insurance, and investments. Tarabut Gateway is determined to also be the pioneering API provider for Fintech innovation in the UAE (and elsewhere).
In our first market, Bahrain, phases one and two of the Central Bank of Bahrain’s Open Banking Framework have been successfully implemented, with the regulator’s focus now shifting to Open Finance solutions. Tarabut Gateway will strive to remain the most trusted provider for the incredible growth to be expected through continual financial services innovation.
We are excited to see many new use cases developed on our platform including AIS/PIS solutions like cross-border payments, digital wallets, know your client processes and personalized financial management products.
Santander Bank has selected Rocket Mortgage to provide its clients an online mortgage lending tool.
Rocket Mortgage will offer Santander clients exclusive discounts and resources to help them in their home buying journey.
Rocket Mortgage was among the first to offer a fully digital mortgage lending experience when it did so in 2015.
A partnership between Santander Bank and Rocket Mortgage is taking off today. Santander has selected online mortgage lending company Rocket Mortgage to serve as the as the exclusive preferred mortgage provider for its customers.
Santander will leverage Rocket Mortgage to offer its two million clients exclusive discounts and resources to help them in their home buying journey. The collaboration enables users to interact independently online or speak to a home loan expert via a phone call, email, or online chat.
“At Santander, we place the customer at the center of our business, and I’m pleased to be working with Rocket to deliver a convenient and simplified digital mortgage experience for our customers,” said Santander Bank Head of Consumer and Business Banking Patrick Smith. “Our relationship with Rocket Mortgage is another example of how Santander Bank is evolving our business and continuing to pursue opportunities for our customers to save, invest and manage their money at Santander.”
Santander is able to use its scale to secure discounts on loan costs and closing costs for its clients. Santander Private Clients and employees who close loans with the new platform can benefit from enhanced discounts.
Formerly known as Quicken Loans, Rocket Mortgage was a pioneer in digital mortgage lending. The company was among the first to offer a fully digital mortgage lending experience when it did so in 2015. The company closed $351 billion of mortgage volume across every U.S. state in 2021.
BlackRock has selected Coinbase to help its clients buy and sell bitcoin.
Under the partnership, clients of BlackRock Aladdin will benefit from Coinbase Prime.
Partnering with Coinbase will help BlackRock add digital currencies as an asset class for the first time.
Coinbase is partnering with BlackRock to help some of the asset manager’s institutional clients connect to Coinbase Prime, making it possible for them to buy and sell bitcoin.
Under the agreement, common clients of Coinbase and BlackRock’s end-to-end investment management platform Aladdin, will benefit from Coinbase Prime, a full-service platform to access crypto markets at scale. At the outset, Aladdin clients will be limited to using Coinbase Prime to buy and sell bitcoin.
With $10 trillion in assets under management, BlackRock offers clients a range of investment strategies, including alternative assets, sustainable investing, factor-based investing, systematic investing, and now digital assets. The company has 8,000 employees across the U.S. and works with more than 190,000 financial advisors to help build client portfolios.
The move adds cryptocurrency as an asset class for BlackRock clients for the first time. “Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” said BlackRock Global Head of Strategic Ecosystem Partnerships Joseph Chalom. “This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”
BlackRock and Coinbase will roll out functionality in phases to interested clients.
Coinbase was founded 2012 and went public late last year. The company trades on the NASDAQ under the ticker COIN. The news of a new client for Coinbase Prime has given Coinbase a boost this week after the recent crypto winter took its toll on the company, which announced a hiring freeze and layoffs earlier this summer. Coinbase’s market capitalization currently sits at $19.74 billion.
London’s OCR Labs announced a partnership with Bloom Money, a company that seeks to enhance financial wellness for immigrant communities.
Bloom Money will leverage OCR Labs’ technology to provide biometric and document verification during its onboarding process.
OCR Labs won Best of Show at FinovateAsia in Hong Kong in 2017.
London-based digital ID verification innovator – and Finovate Best of Show winner – OCR Labs has teamed up with Bloom Money, a platform that is geared toward helping diaspora communities in Europe better manage their finances. Bloom Money will use OCR Labs’ technology to conduct automated biometric verification, document verification, and reauthentication during the onboarding process for new customers.
Bloom Money bases its offering on what it calls “tried and tested” methods of money management – whether they are called contributions, ajo, hagbad, or pardna – used by communities around the world. The company decided to partner with OCR Labs to help it handle the challenge of working with diverse communities with a wide variety of identity documents to be accounted for. “OCR Labs Global is the only vendor who could accurately recognize people of different ethnicities and do liveness verification,” Bloom Money co-founder Nina Mohanty explained. Mohanty reflected on her own experience with the limitations of identity verification technology, saying that OCR Lab’s ability to verify more than 16,000 documents from more than 230 countries and territories is “critical” to the service Bloom Money offers.
“Bloom Money is building an app that is going to make the management of a rotating savings club far simpler and transparent for many communities,” OCR Labs General Manager International Russ Cohn said. “At OCR Labs Global, we are also making verification simple and transparent for the businesses we partner with. We believe that proving who your customers are shouldn’t be a barrier to scale.”
Founded in 2014 and launching its first solution in 2018, OCR Labs leverages optical character recognition technology, advanced facial matching technology using liveness detection and biometric digital verification to verify identity documents and provide highly accurate authentication. The company’s technology covers more than 16,000 identity documents in more than 140 languages, and provides a face matching accuracy of 99.997%. Making its Finovate debut at our developers conference, FinDEVr Silicon Valley, in 2016, OCR Labs earned a Best of Show award a year later upon its return to the Finovate stage for FinovateAsia in Hong Kong.
OCR Labs began the year with news of an investment of $30 million in Series B funding. The funding was led by Equable Capital, a New York-based family office, and will be used to help OCR Labs expand its team in both North America and EMEA. The financing takes the company’s total funding to $46 million.
Launched in 2019, Piermont Bank aims to blend the best of modern banking and agile fintech. Piermont Bank’s peer banking approach provides customers with technology-enabled, human-delivered solutions, opting for dedicated bankers over “1-800 numbers or chatbots.”
Last month, Piermont Bank celebrated three years of innovation. The woman-founded and entrepreneur-led financial institution currently has more than $420 million in total assets, and offers an end-to-end, digital banking-as-a-service platform with more than 40 fintech clients already onboard. More than 50% of Piermont’s loans since inception have been made to low- and moderate-income communities, as well as women- and minority-owned businesses.
The genesis of building Piermont was actually really simple. A lot of entrepreneurs would tell you they had this grand vision. For me, it was actually just very two practical reasons. The first was seeing the impact and the speed of impact that fintechs were making on consumer banking … The second reason was: I’ve been in banking for 26, 27 years. (And I’ve seen) the same pain points repeatedly from both the customer (side) as well as internally as an operator … So basically I said, “Okay if I could start with a blank slate, how would I build this? How would I build a fully digital-native, totally tech-enabled bank to do commercial banking faster and more efficiently?
On the evolution of financial services in recent years
My industry, historically, doesn’t change. It doesn’t go that fast. These days, I say that if the CEO is still working off their three-year strategic plan, if it’s in their third year, the board should fire that person. I mean, are you still even relevant in terms of your products (or) the way that you’re delivering these products? So I think the biggest change is just the speed, the speed of change, the speed of innovation.
I was taught and it’s still true banking is a risk management business. So it’s a little bit counter-intuitive if you think about it, this so-called “innovation.” But you absolutely can innovate in a risk management business.
On the advancement of women into leadership roles in financial services
I find myself able to make the biggest impact in the day-to-day: hiring based truly on skill sets and meritocracy, being gender-blind, age-blind … I know that sounds weird but, as an executive, as somebody who is doing the hiring, as somebody who’s doing the promotion, if I can just say, is this person the best person for the job? That’s more than half the game. I know that doesn’t sound very inspiring or trailblazing, but it is actually the day-to-day that makes a huge difference. Empower women, give them the job opportunity, give them the opportunity to rise to the occasion. That’s how we get there.
Thoma Bravo is acquiring Ping Identity in an all-cash deal for $2.8 billion.
The acquisition will take publicly held Ping Identity into the private markets.
Thoma Bravo’s other recent fintech acquisitions include Bottomline Technologies, Digital Insight, and Ellie Mae.
Cloud-based identity software provider Ping Identity has agreed to be acquired by private equity firm Thoma Bravo. The all-cash deal is expected to close in the fourth quarter of this year for $2.8 billion.
“We are pleased to partner with Thoma Bravo, which has a strong track record of investing in high-growth cloud software security businesses and supporting companies with initiatives to turbocharge innovation and open new markets,” said Ping Identity CEO Andre Durand.
Ping Identity was founded in 2002 and has since made seven acquisitions of its own, including passwordless identity verification company Singular Key, bot prevention and fraud intelligence firm SecuredTouch, intelligent authorization company Symphonic, blockchain-based identity startup ShoCard, AI-powered security company Elastic Beam, customer identity solution UnboundID, and Accells Technologies.
Ping Identity has leveraged this acquired expertise, in addition to its own in-house knowledge, to help enterprises remove passwords, prevent fraud, support Zero Trust. The company offers a no-code, drag-and-drop user interface to make its seemingly intimidating offerings more approachable for non-technical staff.
After the deal closes, Ping Identity, which is listed on the New York Stock Exchange with a market capitalization of $2.38 billion, will transition to a privately held organization. Before the company’s debut onto the public markets, Ping Identity was majority-owned by Vista Equity, which now owns 9.7% of shares in the Denver, Colorado-based company.
“Ping Identity is a leader in intelligent identity solutions for the enterprise and is well-positioned to capitalize on the significant opportunities in the $50 billion Enterprise Identity security solutions area,” said Thoma Bravo Partner Chip Virnig. “Our shared commitment to growth and innovation, combined with Thoma Bravo’s significant security software investing and operational expertise, will enable Ping Identity to accelerate its cloud transformation and delivery of industry leading identity security experiences for the customers, employees and partners of large enterprises worldwide.”
Today’s purchase marks Thoma Bravo’s 91st acquisition. The firm 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 the Illinois-based company’s most recent fintech purchases are Bottomline Technologies, Digital Insight, and Ellie Mae.
