Here’s Why AI is No Longer a Fintech Trend

Here’s Why AI is No Longer a Fintech Trend
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

Can we stop naming AI as a trend in fintech? Probably not yet, but we should. That’s because trends ebb and flow, but AI isn’t going anywhere. Banks and fintechs aren’t going to let up on leveraging AI within the decade. In fact, the number of times we’ve seen the adjective “AI-powered” has only increased.

Depending on how you define it, fintech has been in existence for around 20 years. That’s a long time for themes to rise and fall. Below is a look at transitory trends, lasting trends, and AI’s place in the mix.

Fleeting trends

As regulation, technology, and consumer habits and tastes have changed throughout the years, so have fintech trends. However, many ideas in fintech never took off. While some were overhyped, others were simply a solution looking for a problem or were an idea before their time, offered to the market too soon.

A recent example of a transitory trend is card-linked offers (CLO) Also called merchant-funded rewards, these customer loyalty and rewards tools reached their peak in 2012. Similar to the buy now, pay later craze that is happening right now, there were multiple launches of new CLO companies each month. Even large banks were getting on board. In fact, in 2012 Bank of America debuted a CLO product, BankAmeriDeals, powered by Cardlytics.

It’s worth noting that card-linked offers are still around. It is only the growth rate and hype around CLOs that have decreased. In fact, Cardlytics, Cartera Commerce, Cachet Financial Solutions, and others still exist and serve customers today.

Lasting trends

The list of lasting trends in fintech is short. In fact, there are only a handful of trends that have been introduced over the last two decades that have become table stakes for every bank and fintech across all sub-sectors. Not surprisingly, because these lasting trends are now standard throughout the industry, they all seem quite obvious.

Three solid examples of these stronghold trends include having a digital presence, providing a mobile app, and offering digital payment/money transfer capabilities. The evolution began, at the dawn of fintech, with banks just starting to establish their online presence. The next adaptation of that was SMS banking, which evolved into to mobile apps and digital money movement.

Today, the application of AI is becoming so standard across the fintech industry that it can be added to the fintech trend hall of fame.

The current state of AI

In case you haven’t been paying attention, AI is being used across the entire fintech industry. Its applications are almost limitless, but here are a handful of current examples.

  • Lending– Underwriters can use AI to enhance the decisioning process to reduce risk, as well as to monitor for unseen biases in the lending process.
  • Payments– AI can enable biometrics-activated payments and can also create smooth payment processes by analyzing past transactions before approving or declining transactions on an issuer’s behalf.
  • Wealth management– Wealthtech companies can empower users with self-driving money, a concept that describes moving funds into and out of different accounts and investments based on fund performance, cash flow, and bill due dates.
  • Insurtech– AI can enhance predictive data modeling to create better pricing models around policies.
  • Security– Fraud detection in financial activity relies heavily on AI, as do both identity detection and verification.

Funding for AI fintechs has been on the rise since 2016. According to CB Insights, the total amount of funding in 2021 for AI startups in fintech is at the same level as last year’s year-end total, with $3.1 billion raised across 161 deals. This year, the average investment size clocked in at $25 million. There has also been an increase in M&A activity for fintech AI startups. So far this year there have been 12 mergers and acquisitions in the space, compared to eight last year and two in 2016.

Photo by Volodymyr Hryshchenko on Unsplash

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Float Lands $30 Million for Spend Management Technology

Float Lands $30 Million for Spend Management Technology
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Float, a Canada-based startup that offers a corporate card and spend management solution, landed $30 million (C$37 million) in funding this week. The Series A round was led by Tiger Global and brings the company’s total funding to $34 million (C$42 million).

The funding will help Float with its mission to deliver an end-to-end spend management platform for SMBs. “We want this platform to enable businesses and teams to focus on investing in their growth and eliminate the need to use different banking and software tools to make day-to-day payments… Float’s mission is to simplify spending for companies and teams,” the company explained in a blog post.

Float was founded in 2019 to offer Canadian SMBs a high-limit, no personal guarantee corporate card that is available in three business days or less. This turnaround is impressive when compared to the average four+ week wait time most businesses face to receive their corporate spending cards. Businesses can set custom spending limits, assign cards to employees, and review and approve transactions in real time.

In addition to the card capabilities, Float also offers spend management software that natively integrates with accounting software such as QuickBooks and Xero. The dashboard helps employers track real-time spending and provides an overview of individual, departmental, and categorical spending.

The investment comes at a good time for Float, which has seen significant growth since launching to the public in March of this year. The company now has hundreds of small business clients and continues to experience increased engagement. Float’s total payment volume has increased ~20x since June and its average monthly customer spend has increased more than 6x since March.

Float offers a freemium pricing model with varying features. All tiers come with 1% cashback, 0% FX fees, unlimited users, automatic top-ups, and a $100,000 spending limit. The paid tiers provide custom integrations, team management, and more.

Photo by Hello I’m Nik on Unsplash

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BM Technologies Inks Strategic Merger with First Sound Bank for $23 Million

BM Technologies Inks Strategic Merger with First Sound Bank for $23 Million
By David Penn Posted on
Categories: Daily news, Mergers & Acquisitions

BM Technologies (formerly known as Bank Mobile) has agreed to merge with Seattle-based community lender First Sound Bank for $23 million. The combined entity will be called BMTX Bank and will serve customers across the country digitally while maintaining a community banking division that will continue serving customers in the greater Seattle market.

“This is a thrilling milestone for BM Technologies and is a major step forward in executing our vision to create a disruptive FinTech bank that combines the best of financial technology with a strong and compliant FDIC-insured institution,” BM Technologies, Chair, Founder, and CEO Luvleen Sidhu said.

BMTX will pay up to $7.22 in cash for each share of First Sound Bank common stock, which amounts to approximately $23 million. Subject to regulatory approvals and customary closing conditions, the strategic merger is slated to close in the second half of 2022. The deal is expected to add significantly to the combined company’s revenue, EBITDA, and earnings trajectory over the next one to three years. Sidhu said that the strategic merger will enable BMTX Bank to offer a variety of new services including direct to consumer and small business operations, marketplace lending, robo-advisory, and blockchain-based payment systems.

“As one of the largest digital banking platforms in the country with approximately 2 million accounts, this merger allows BMTX to lead a new wave of financial innovation by enhancing its focus on technology, inclusion, easy-to-use products, and customer education with the mission of creating ‘customers for life,'” Sidhu explained.

Sidhu will serve as Chair and CEO of BMTX Bank, and will be directly responsible for digital banking initiatives. First Sound Bank President and CEO Marty Steele will serve as COO of BMTX Bank and will lead the company’s community banking division.

“As a local bank, we remain committed to our community and are excited about the opportunity to leverage BMTX’s innovative digital banking technology, Banking-as-a-Service business model, low-cost deposit funding, and better access to the capital markets in order to scale our SBA, commercial and private banking, mortgage, and other business lines,” Steele said.

Founded in 2004 with the largest initial capital base of any de novo bank in the Pacific Northwest at the time, First Sound Bank provides commercial banking services for SMEs, not-for-profit organizations, entrepreneurs, and professional service firms in the Puget Sound region. Headquartered in Seattle, Washington, First Sound Bank has approximately $150 million in assets.

Formerly known as Bank Mobile, BM Technologies was launched in 2015 with a goal of providing a simple, affordable, and financially empowering, digital-first banking experience. The company went public via SPAC at the beginning of the year, listing on the New York Stock Exchange under the ticker BMTX. BM Technologies currently has a market capitalization of $145 million.

The company’s strategic merger announcement comes on the heels of BM Technologies’ Q3 results. Among the quarter’s highlights, BM Technologies reported that serviced deposits topped $2 billion for the first time. The company also earned recognition in the 2021 Finovate Awards in September, winning Best Fintech Partnership courtesy of its collaboration with T-Mobile.

To learn more about BM Technologies, check out our Fireside Chat with Luvleen Sidhu from FinovateFall 2021 in New York.

Photo by Scott Webb from Pexels

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Stori Raises $200 Million for Financial Services for the Underserved

Stori Raises $200 Million for Financial Services for the Underserved
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Mexico-based Stori landed $200 million this week in combined debt and equity. The investment, which bring the company’s total funding to almost $250 million, will help the fintech provide financial services to its region’s underserved customers.

The $125 million in equity was co-led by GGV Capital and GIC with contributions from General Catalyst, Goodwater Capital, Tresalia Capital, Lightspeed Venture Partners, Vision Plus Capital, BAI Capital, and Source Code Capital. The $75 million in debt financing comes from Community Investment Management.

The investment echoes Stori’s success in the region. The company has become one of Mexico’s top issuer of new credit cards since February of this year. In fact, more than 2 million Mexicans have applied for a Stori credit card, and that number has grown by more than 10 times in the last twelve months.

And there is still plenty of room for growth. The broader Latin American region has 400 million underserved consumers. “Our mission – empowering financial inclusion for millions of hard-working people – is amazingly meaningful and challenging at the same time,” said Stori CEO and co-founder, Bin Chen. “We are progressing at an unprecedented pace by combining technology, machine learning, data-driven underwriting and an intuitive mobile-based user experience. A lot more will come in our journey to become a top consumer financial franchise in Latin America.”

Stori plans to use today’s funds to triple in size and broaden its product offerings to better suit customer needs, ultimately providing much-needed financial services to Mexico’s underserved citizens. The fresh capital will also help Stori grow its team and double down on training and development opportunities.

While Stori is focused on the Mexico region, the company boasts a global team with offices in Washington D.C., Mexico, and Asia. “Our success since launch is a direct result of having a team who is passionate about our mission to empower upward financial mobility for the underserved population,” said company Co-founder Marlene Garayzar. 

Photo by Andrés Sanz on Unsplash

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Atomic Lands $25 Million for its Investing-as-a-Service Technology

Atomic Lands $25 Million for its Investing-as-a-Service Technology
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Wealthtech company Atomic announced its company launch along with a $25 million in a Series A funding round today. The round, which was co-led by QED Investors and Anthemis with participation from Softbank and Y Combinator, will help fuel the company’s investing API that allows fintechs and banks to integrate investing into their existing products.

With Atomic’s API, companies can launch investing experiences such as direct indexing, ESG investing, and multi-currency trading across 60 global markets with no account minimums. The “investing-as-a-service” nature of the new offering means that companies can launch investing tools in a matter of weeks without relying on in-house experiences. In fact, Atomic takes care of not only the investing experience, but also the details around regulations, brokerage operations, and compliance.

“What we see is that fintechs and other consumer-facing companies want to offer savings and investment, but most have come to market with very limited product offerings — only single stock trading or only ETF investing,” said QED Investors Partner Amias Gerety. “Atomic provides cutting edge solutions so that their partners can offer both of these products easily, but also offer advanced features like ESG, direct indexing, and tax loss harvesting that are usually only available for accounts with hundreds of thousands of dollars in them.”

Atomic helps companies retain customers by broadening their existing offerings to include investing– a financial tool that generally creates long-term customer loyalty. “Any fintech or bank that wants to become their end-customers’ primary financial relationship will need to offer investing on their platform to remain competitive,” said Atomic CEO David Dindi. “As an accelerant in the rapidly evolving ecosystem of unbundled financial services, Atomic enables these businesses to offer investing in a frictionless way as a means to deepen their relationships with customers.”

Among Atomic’s client base are fintechs such as Upside, a student loan innovator. Upside is leveraging Atomic’s API to build a wealth management offering that allows its users to refinance their student loans and reinvest the savings.

Dindi, along with the company’s CTO Marco Alban are both Stanford graduates and serial entrepreneurs.

Photo by Taylor Peake on Unsplash

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How One Fintech Founder’s U.S. Military Experience Impacts His Operations

How One Fintech Founder’s U.S. Military Experience Impacts His Operations
By Julie Muhn (@julieschicktanz) Posted on
Categories: Speaker series

Veterans Day in the U.S. is a day to remember and honor the sacrifices our military veterans have made to preserve the freedom we enjoy on a daily basis. How can banks and fintechs give back by connecting and serving this niche clientele in return?

We interviewed Dennis Cail, co-founder and CEO of Zirtue, who shared his experience as a U.S. Navy veteran-turned-fintech entrepreneur. Cail told us how his military experience impacts his work at Zirtue and what banks and fintechs can do to give back.

Tell us the basic idea of Zirtue.

Dennis Cail: Zirtue is the world’s first relationship-based lending application, simplifying loans between friends, family, and trusted relationships by turning informal promises into structured agreements and automating the repayment process. Zirtue’s mission is to drive financial inclusion and freedom, one relationship at a time.

Headquartered in Dallas, Texas, Zirtue sits at the nexus between two major pain points: a person needing a financial lifeline to pay their bills and a company struggling with bad debt. Corporate partners use Zirtue as an alternative payment solution, allowing individuals with past-due accounts to request loans from friends or family members in order to pay their bills. Zirtue has raised $6 million of VC funding and more than $10 million in loans have been processed on the platform to help users keep their lights on, pay their rent, and get access to critical healthcare.

How did you come up with the idea of Zirtue? What was the impetus?

Cail: Growing up in Louisiana, I lived in public housing and neighborhoods often surrounded by payday lenders and check cashing services; the same was true of the areas surrounding the naval bases I lived on. It wasn’t until college when I saw how different communities attract different types of neighborhood businesses such as banks, and that many neighborhoods didn’t have traditional banks.

Looking back, I saw how clearly and deliberately predatory lenders target those with few financial options and no access to traditional banking services, like my neighborhoods in Monroe and the Navy. These experiences led me to creating a loan option for these unbanked and underbanked folks that provided them with necessary loans and empowered them through the process. We all need a little help sometimes, and that is what Zirtue is all about. I also have experienced the challenges of loaning friends and family money myself. Even though I wanted to help my loved ones out, it made things awkward. I saw the impact that these friendly loans could have on my loved ones in terms of helping them achieve their dreams or simply make ends meet, without having to pay the high fees of predatory payday lenders who are the only available option for many.

As someone who has always wanted to found a company and had a background in finance, I knew I could create a solution for this problem that formalized these friendly loans, while simultaneously driving financial inclusion. Ultimately, this solution became Zirtue, and we’ve now processed more than $10 million in loans to-date and plan to continue until Zirtue is a payment option at every retailer you visit in-person and online.

You are one of a handful of military veteran fintech founders. First off, thank you for your service. Can you tell us about your military experience?

Cail: As a Systems Engineer in the US Navy working with hardware and software to ensure we had ship-to-ship and ship-to-shore communications, my military experience gave me the technical foundation I needed to start a successful career in technology. The military is also a place that either makes or breaks you. At the very least it reveals who you are at your core and I learned a lot about myself during my military experience.

Funny, but true story… I didn’t know how to swim when I joined the Navy and when I shared this information with my civilian friends after I left the Navy, they would naturally ask me, “why did you join the Navy if you couldn’t swim?!” The answer is that I joined the Navy to learn how to swim and to serve my country. This may sound a bit extreme. However, entrepreneurs have to be extreme on some level if they are going to achieve what most people would consider impossible or too risky. Long before I became an entrepreneur and a fintech founder, I had the spirit of an entrepreneur with a high tolerance for calculated risk. My military experience only amplified that entrepreneurial spirit.

How does your military experience impact your work at Zirtue?

Cail: The military has absolutely influenced my career and led me to found Zirtue. First of all, the military taught me how to be a strong leader and how to navigate stressful situations – which are both imperative to founding a company and handling the complexities of entrepreneurship. Further, the military taught me to always look out for your partner, or in my case shipmate, and that we either win together or lose together. This concept has shaped the way I interact with my team, our customers, partners, and other entrepreneurs – we have to take care of each other.

Finally, being in the military taught me about the importance of structured, detailed plans, which has helped me integrate further structure into entrepreneurship and supported business growth for Zirtue. Looking back, I am incredibly thankful for my military experience for shaping me into the man I am today and forming a solid foundation as an entrepreneur and CEO.

What advice do you have for banks and fintechs looking to connect with and serve military veterans as clients?

Cail: It’s extremely important that banks and fintechs alike do all they can to help military veterans transition back into civilian life so that we can put them in the best possible position to be successful with skills that are highly transferable. Given the sacrifices made by these men and women, my advice is simply to be intentional about their DEI efforts to connect with military veterans with formal programs that include military veterans.

At Zirtue we actively recruit from this amazing source of talent and encourage military veterans to apply for any open jobs we may have. I would also like to call out that banks like USAA and Navy Federal Credit Union are very active in their efforts to support veterans and their families with financial products and customized lending options. Their efforts should be applauded and replicated.

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Beyond Crypto Curious: How Apple, Mastercard, and Revolut Are Embracing Digital Assets

Beyond Crypto Curious: How Apple, Mastercard, and Revolut Are Embracing Digital Assets
By David Penn Posted on
Categories: Apple, List series, MasterCard, Revolut

Three headlines in the cryptocurrency space this week show how seriously Big Tech, Big Fintech, and the world’s largest financial services companies are taking the rise of digital assets. And while each of the three companies listed below varies in the degree to which it is embracing our increasingly crypto-friendly future, their continued interest in the space suggests that the pace of adoption of digital assets – and the proliferation of use cases – is only likely to grow in the months and years to come.

Are Cryptocurrencies Coming to ApplePay? – AppleInsider reported early this week that Apple is considering integrating cryptocurrencies into its Apple Pay solution.

The report is based largely on an interview that Apple CEO Tim Cook had with Aaron Ross Sorkin as part of the DealBook Online Summit sponsored by The New York Times. That said, those looking for a firm commitment from Apple in Cook’s conversation with Sorkin will be disappointed; while Cook expressed interest in cryptocurrencies from a “personal point of view … for awhile” and admitted that he believed that it was “reasonable to own (cryptocurrencies) as part of a diversified portfolio,” the idea of Apple accepting cryptocurrencies as payment for Apple products and services remains just that – an idea. Cook also expressed skepticism toward the notion of Apple investing in cryptocurrencies as part of a corporate investment strategy.

Apple’s relationship with cryptocurrencies has been cautious, to say the least. Back in 2014, Apple removed a number of Bitcoin wallets from its App Store, including one trading and storage app with 120,000 users, and another wallet app from Coinbase. More recently, there has been some softening of Apple’s stance, with Apple Pay VP Jennifer Bailey conceding the the company is “watching” the space and sees “interesting long-term potential” in digital currencies just a few years ago.

It’s worth noting that Apple’s reputation in technology is less as a first-mover and more that of a technology enhancer that often comes along and does a better job at innovations initiated by others. So the idea that Apple’s approach to embracing cryptocurrencies would be similarly slow-rolling is consistent with how the company has long operated. Nevertheless, Apple Pay’s fintech rivals – such as PayPal, Square, and Stripe – have been far more eager to pursue opportunities in crypto. Add to this the fact that Google Pay has teamed up with digital asset marketplace Bakkt in a deal that will enable users to spend Bakkt Card crypto funds directly from their Google Pay accounts. Together, it seems much more likely that a closer relationship between cryptocurrencies and Apple Pay is a question of “when” rather than “if.” As interest in digital currencies accelerate, and the solutions and services from these crypto-friendly fintechs become more widespread and even mainstream, it is hard to imagine Apple Pay remaining on the sidelines.

Revolut Takes Steps Toward Building a Cryptocurrency Exchange – The rumor that aspiring super app Revolut is looking to build a cryptocurrency exchange hinges largely on a job posting at LinkedIn. According to reports, Revolut wants to hire an individual with at least seven years experience in technology and in building order matching engines to lead a technical team to “architect and built Revolut Crypto Exchange.”

The crypto exchange would further establish Revolut as a leading player in the cryptocurrency space and potentially enable the company to diversify its services and create new cash flow, which could help Revolut establish another reliable revenue source going forward. The exchange news also follows reports that Revolut was looking into launching its own crypto token. And while Revolut has not commented on what it has referred to as a “mere rumor”, the report, first shared by Coindesk earlier this fall, does bolster the notion that Revolut is deepening its commitment to digital assets – a space the company has enjoined aggressively since introducing in-app cryptocurrency trading functionality in 2018.

In April of this year, Revolut added 11 new crypto tokens to its platform. The following month, the company launched its public beta for Bitcoin withdrawals. “I said before that 2021 would be the year of crypto and Revolut is here to deliver on that promise,” company Head of Crypto Edward Cooper announced in June when the company revealed that it would add Dogecoin to its current cryptocurrencies offerings for traders. “One of the most popular user requests over the past couple of months has been to add Dogecoin and we have answered the call!”

Revolut has more than 16 million customers around the world, and conducts more than 150 million transactions a month on its platform.

Mastercard Introduces Crypto-Linked Cards for the APAC Region – Also this week, Mastercard announced that it has secured partnerships with a trio of cryptocurrency companies – Amber, Bitkum, and Coinjar – who will issue crypto-funded Mastercard payment cards. The collaboration represents the first APAC-based cryptocurrency service providers (Amber and Bitkum are based in Thailand, Coinjar is headquartered in Australia) to join Mastercard’s Crypto Card Program, an initiative designed to enable companies to offer secure payment cards that meet regulatory requirements with regards to cryptocurrencies.

“Cryptocurrencies are many things to people – an investment, a disruptive technology, or a unique financial tool,” Mastercard EVP for Digital and Emerging Partnerships and New Payment Flows in the Asia Pacific region Rama Sridhar said. “As interest and attention surges from all quarters, their real-world applications are now emerging beyond the speculative. In collaboration with these partners that adhere to the same core principles that Mastercard does – that any digital currency must offer stability, regulatory compliance, and consumer protection – Mastercard is expanding what’s possible with cryptocurrencies to give people even greater choice and flexibility in how they pay.”

Mastercard’s APAC announcement comes on the heels of news that the company will enable the banks and merchants on its payment network to integrate cryptocurrency offerings into their products. The new arrangement comes courtesy of a partnership with Bakkt and will empower bitcoin wallet providers as well as issuers of credit and debit cards that offer rewards in crypto and enable digital assets to be spent. Also benefitting from Mastercard’s plan are those companies that offer loyalty programs that allow points from travel or hotel stays to be converted in to cryptocurrencies.

“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value, and impact every day,” Mastercard EVP for Digital Partnerships Sherri Haymond said. “Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”

Photo by RODNAE Productions from Pexels

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Xspaced Launches Virtual Bank Accounts for Renters

Xspaced Launches Virtual Bank Accounts for Renters
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Flexible rent payment platform Xspaced launched its digital bank accounts for tenants today. The bank accounts enable Xspaced’s FlexRent product, a tool that helps tenants split their rent payment into two to three installments over the course of a month.

Today’s launch offers Xspaced an important distinction in the online rental payments space– it doesn’t require landlords to register. Instead, tenants can use the virtual bank account independently and landlords can continue using their preferred online rent collection platform.

“Since launching FlexRent last year, we’ve continuously heard from tenants that they would like to have more flexibility when it comes to paying rent and from landlords that they want to keep their current rent collection system,” said Xspaced Cofounder Alex Pelin. “Tenants can save money towards their next rent payment via smaller payments over the month, landlords can keep collecting rent on their preferred payment portal – it’s a win / win for everyone!”

Aimed at gig workers and others with inconsistent income, FlexRent connects to users’ existing bank accounts. Xspaced sends tenants automated payment reminders to help them save money for their upcoming rent payment two to three times each month. At the beginning of the following month they can used the money they saved to pay their landlord using their landlord’s online rental collection platform.

Modern payments platform Dwolla is powering the money movement piece of FlexRent. “Making expense management simpler for anyone on a variable income has been a challenge for a long time,” said Dwolla CEO Brady Harris. “With Virtual Account Numbers, Xspaced is helping make rent easier by helping tenants align their rent payments with their income schedule. We’re proud to power part of their solution.”

The utility of Xspaced’s new virtual bank account offering seems inflated. FlexRent simply sends a reminder to users to send their rent payment and serves as an account to hold the payment. It is the renter’s responsibility to transfer the funds to the Xspaced account and to pay their landlord using the funds held in the Xspaced account.

This is not much value in exchange for the cost, which ranges from $2.99 per month for two payment installments to $5.99 per month for three or four payment installments. The FlexRent account requires users to have a bank account already, so renters may as well open a savings account at their bank to which they can set up multiple automatic transfers.

That said, Xspaced must offer at least some value, because the California-based company boasts that, “thousands of renters love Xspaced.”

Photo by Bench Accounting on Unsplash

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txtsmarter Inks Partnership with Client Onboarding Software Provider GuideCX

txtsmarter Inks Partnership with Client Onboarding Software Provider GuideCX
By David Penn Posted on
Categories: Alumni News, Daily news, txtsmarter

San Mateo, California-based txtsmarter, an intelligent communications surveillance service for text and social channel communications, has forged a partnership with GuideCX, a client onboarding software company. GuideCX will streamline the onboarding process for txtsmarter customers as the company expands across the country.

“Txtsmarter is growing at such a high rate that transparency and accountability during the onboarding process are a must for their customers,” GuideCX founder and CEO Peter Ord said. “Their one-day onbording has set a new level for GuideCX as we continue to perfect our process and show people everywhere why our technology can make all the difference for their businesses moving forward.”

txtsmarter made its Finovate debut last year at FinovateWest and returned to the Finovate stage this fall for FinovateFall in New York. The company offers a SaaS platform that enables employees and customers in regulated industries to use native communications apps such as iMessage, WhatsApp, Android, and WeChat/WeCom. txtsmarter’s platform provides effective capture, encryption, and archiving of text and social media messages, immediately identifying any inappropriate communication or potentially fraudulent activity.

Founded in 2014, txtsmarter includes one of the largest financial institutions in the world and a major U.S. sports league among its customers. The company began the year with the announcement that it had entered a strategic partnership with compliance technology and data analytics firm, Steeleye. The collaboration will combine txtsmarter’s message capture and archiving service with Steeleye’s advanced communications surveillance solution.

“Via our partnership with SteelEye, we offer our clients a 360-degree archiving and surveillance service, supplying real-time access to previously inaccessible data,” txtsmarter President and CEO Nuri Otus said. “Only txtsmarter can capture native iMessage and Android SMS/MMS messages providing a full view of all communications – which is necessary for full compliance and to avoid huge sanctions. We all know the real conversations happen via text.”

Photo by Alok Sharma from Pexels

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Gloss Without the Undercoat? The Longer-Term Results of Digitizing Without the Right Foundations

Gloss Without the Undercoat? The Longer-Term Results of Digitizing Without the Right Foundations
By Charlie Burgess Posted on
Categories: Finovate Webinar

Title: Gloss without the undercoat? The longer-term results of digitizing without the right foundations
Duration: 1 hour

With staff costs at around 50% of all operational expenditure in some banks, it’s easy to see why reducing the human element from the banking relationship can be attractive. Digital take-up rates received a massive bump during the recent pandemic, which has added weight to the notion that banking employees are not as necessary as they once were.

But can you reduce your resource levels once you’ve pushed customers to the digital channel?

Recent evidence suggests that the drive towards digital without careful attention being paid to the experience the customer receives can lead to unexpected costs.

Catch up on this #FinovateWebinar with Bob Meara, Senior Analyst for Retail and Corporate Banking at Celent, and Andrew Stevens, Global Principal for Financial Services at Quadient, as they analyze new research results, uncover critical gaps in the customer experience, and recommend practical steps to join digital transformation with longer term sustainable cost savings.

Photo by Michael Dziedzic on Unsplash

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Best of Show Winner Autobooks Helps Small and Micro Businesses Get Paid Faster

Best of Show Winner Autobooks Helps Small and Micro Businesses Get Paid Faster
By David Penn Posted on
Categories: Alumni News, Alumni profile, Autobooks, Daily news

Sometimes at Finovate, the first time is the charm.

Detroit, Michigan-based fintech Autobooks, which helps small businesses send digital invoices and accept online payments via their financial institution partner, took home Best of Show honors in its Finovate debut in September. The company, co-founded by Steve Robert (CEO) and Aaron Schmid (CIO), impressed our audiences with its embedded solution that gives small businesses an e-commerce platform that is fully integrated into their current digital banking system.

Autobooks shared the stage with partner TD Bank, which offers Autobooks’ suite of tools as part of its TD Online Banking solution. TD Bank Head of Corporate Products and Services Jo Jagadish noted that the partnership has “increased relationship depth with our SMBs by 26%” and represented what Jagadish referred to as a complete reimagining of the bank’s small business checking experience.

“Small businesses are an enormous and diverse group with one thing in common,” Robert explained, “how they get paid is in a state of transition. Financial institutions must invest in digital-first experiences to meet SMBs where they, and their customers, are.” One advantage Autobooks provides is the fact that its technology is embedded into the customer’s existing banking channels, helping financial institutions build and fortify their relationships with their small and micro-business customers.

In the weeks since Autobooks’ Best of Show winning demo at FinovateFall, the company has announced a partnership with Central Trust Bank. Headquartered in Jefferson City, Missouri, the $20 billion state-chartered trust company will embed Autobooks’ technology into its digital banking platform. In addition to giving the bank’s business customers the ability to send digital invoices and accept online payments, the integration will also provide cash flow management, accounting, and financial reporting tools.

“We’re dedicated to providing innovative solutions to our customers, and the tools to make banking as easy as possible,” Central Trust Bank SVP of Commercial Banking Services Arlene Vogel said. “We believe partnering with Autobooks will allow for business customers to optimize payments for their business, ultimately helping their business succeed.”

Central Trust Bank has more than 250 locations in 78 communities in Missouri, Kansas, Illinois, Oklahoma, Tennessee, North Carolina, Colorado, and Iowa. The bank was founded in 1902.

Also last month, Autobooks announced that it had expanded its partnership with TD Bank to add invoicing to TD Bank’s TD Business Simple Checking offering. The bank’s business customers will now be able to accept credit card and electronic payments that settle directly into their TD account. This will enhance cash flow and liquidity, and will make it that much easier for small and micro-businesses to get paid faster. The collaboration marks TD Bank as one of the first major financial institutions to offer integrated invoicing as part of its digital banking solution.

“Probably the greatest pain point for small businesses is actually getting paid for the services they provide,” Jagadish said. “The new tool will make things easier, faster, and enable our small business customers to get paid, almost immediately in most instances, when the process previously could take up to a week or longer.”

Previous to co-founding Autobooks, both Robert and Schmid were executives with another Finovate alum, Billhighway. Robert served as Chief Information Officer, while Schmid was Chief Product Officer. The company was acquired by BluePay in 2016.

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Socure Locks in $450 Million in Series E Funding; Earns Valuation of $4.5 Billion

Socure Locks in $450 Million in Series E Funding; Earns Valuation of $4.5 Billion
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Socure

Digital identity verification and fraud solution provider Socure has scored $450 million in what the company called a “significantly oversubscribed” Series E funding round. The investment comes just seven months after the company’s $100 million Series D round, and boosts Socure’s valuation to $4.5 billion.

“With this additional capital, we will substantially increase our level of commercial velocity and intensity in solving complex customer and societal problems, while maintaining our Day 0 founder’s mentality and continuing to attract the market’s best product, data science, and engineering minds to join our already incredibly talented team,” Socure founder and CEO Johnny Ayers said.

The Series E was led by Accel – along with funds and accounts advised by T. Rowe Price Associates. New investors Bain Capital Ventures and Tiger Global joined existing investors Commerce Ventures, Scale Venture Partners, and Sorenson Ventures in the round, as well. Socure’s total equity funding stands at $647 million.

The investment gives Socure the highest valuation of any private company in the identity verification market. The company’s identity verification and fraud-fighting platform Socure ID+ has gained meaningful traction in the enterprise, with four of the five largest banks and seven of the 10 largest credit card issuers embracing the technology. Add to this a host of major fintechs, Buy Now Pay Later firms, investment management companies, and crypto exchanges. Socure has enjoyed 5x year-over-year bookings growth, more than 2x year-over-year customer growth, and five consecutive quarters of record year-over-year revenue growth.

Additionally, Socure achieved a net retention rate of 179% which the company said was due to “near-zero attrition” as Socure’s enterprise customers deployed multiple Socure solutions across divisions at an increasing rate. The result has been to make Socure an all-in-one platform for fraud prevention, KYC, AML, and document verification in the enterprise.

“When you’re a market leader, you move from attacking and replacing the incumbents repeatedly as you earn your seat at the table to truly being a strategic partner to many of the best companies in the world,” Ayers said.

Socure will use the new capital to further invest in product innovation, enter new markets such as telehealth, gaming, e-commerce marketplaces, and the public sector, and add talent to the Socure team – especially in the areas of product development, data science, and engineering. The company also will use the investment to enhance both its customer consortium data and automated ID+ platform to address payment and first party fraud as effectively as it currently combats third party and synthetic fraud.

Founded in 2012 and making its Finovate debut a year later at FinovateFall, Socure has had a busy autumn in 2021, launching new fraud prevention solutions and adding a new Chief People Officer in September, plus reaching a 750 customer milestone early in October. Also in October, Socure announced a major commitment to deliver identity verification solutions to the public sector market, appointing Matt Thompson as its new General Manager of Public Sector Solutions.

“Many agencies lack the industry experience required to effectively manage identity verification and reduce fraud losses in the midst of accelerated digital transformation due to the pandemic,” Thompson explained. “Furthermore, the gaps within legacy identity solutions were exposed leaving numerous eligible people waiting extended periods of time for their benefits while enabling fraudsters to manipulate these same benefits at an unprecedented level. We are committed to solving this challenge for government agencies.”

Photo by Tara Winstead from Pexels

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