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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
ITSCREDIT‘s innovative solution helps banks’ customers, who are struggling more with their monthly installments due to the Covid-19 crisis, by restructuring their active loans.
Features
Manage an individual’s financials
Simply restructure credit
Restructure loans to avoid arrears
Why it’s great The Genie Advisor restructures loans to improve a customer’s financial life and helps him or her avoid arrears.
Presenters
Sofia Augusto, Marketing Manager Augusto has been working in the marketing industry since 2014, and in November 2018, she became ITSCREDIT’s Marketing Manager, developing several projects like branding the company. LinkedIn
Marco Sousa, International Business Developer Sousa has been working in the management industry since 2007, and in August 2019, he became ITSCREDIT’s Business Developer, focusing on international business development with clients and partners. LinkedIn
Surfly is an Amsterdam-based start-up that helps global financial services brands thrive in the era of digital transformation and remote distribution, especially in regulated environments.
Features
Universal co-browsing and video chat helps advisors work with customers remotely
Intelligent document editing and real-time eSignature
Audit log API, CRM integration, and masking for compliance
Why it’s great Surfly went live with 1,000 advisors at AXA in just one week. They also went live with 200 banks in Germany, with on-premise installation, in just two weeks. Surfly is fast, simple, and secure!
Presenters
Tariq Valente, CCO After evangelising the Open API vision to FS executives with Apigee, Valente helped drive them to an IPO and Google acquisition. He now helps global leaders become more customer centric and digital. LinkedIn
Paul Barnett, Account Executive – EMEA Barnett has a wealth of experience across financial services, cybersecurity, telco and ecommerce. He started his career at large Australian banks and now enjoys helping brands digitally transform. LinkedIn
M1 Finance has raised another $75 million in funding to support its finance super app, which combines investing, borrowing, and spending functionality into a single platform. The Series D round was led by Coatue, and featured participation from Left Lane Capital, Jump Capital, and Clocktower Technology Ventures.
The investment brings M1 Finance’s total capital to more than $173 million, $153 million of which was raised in just the last ten months.
In a blog post, company founder and CEO Brian Barnes said that the funding will help M1 Finance add talent and “invest in innovation that furthers our mission.” Barnes wrote that rather than merely “incentivizing trading”, the goal of M1 Finance is to offer a “holistic, smart platform that encourages and enables you to practice good financial habits.” He added that this meant innovating in all areas of the customer experience – from more tools to better interfaces to a more seamless integration “with your whole financial life.”
M1 Finance’s platform includes three components: M1 Invest enables users to build their own investment portfolio for free and manage the portfolio with automatic, one-click rebalancing. Fractional share investing is also available. M1 Borrow offers a flexible portfolio line of credit for accounts of $10,000 or more, and M1 Spend gives users a checking account to make it easier for them to repay their loans on time, as well as set up direct deposits and schedule automatic investments.
In his blog post, Barnes also shared some recent milestones for the Chicago, Illinois-based company. M1 Finance topped $3 billion in client assets last month, reported a 3x increase in new sign-ups in January 2021 compared to the previous month, and noted a 2.5x growth in new sign-ups between January 26 and February 8 compared to the previous two weeks.
“We’re building (an) experience for people with thousands and millions,” he wrote. “Whether you have $50 million or $50,000 we want you to have the right tools, the right education, and the right control over your future.”
A Finovate alum since its conference debut in 2016, M1 Finance has partnered with the likes of Rackspace Technology and, in December, launched a new “smart transfers” feature. The fully customizable solution enables those subscribed to M1 Finance’s M1 Plus program to set “threshold-based rules to cascade available funds between M1 accounts.”
Continuing our #womeninfintech series, we ask Regina Lau, Chief Strategy Officer, Retail Merchant Services, a TVC Portfolio Company and Executive Board Member of European Women Payments Network (EWPN), about her thoughts on International Women’s Day and the challenges and opportunities for women in the industry.
What does IWD & #ChooseToChallenge mean to you in your work life?
Regina Lau: International Womens’ Day (IWD) is a day to celebrate all the achievements from women around the world and also all the women who have been inspirational role models, no matter if they made big headlines or not. As a member of the Executive Board of European Women Payments Network (EWPN), this is also a very important day for us to continue the call for change and recommit to supporting all women. I believe that “when one rises, we all rise”.
What barriers did you face, as a woman, in becoming successful in your field and how did you overcome them?
Lau: I’ve always worked in male dominated industries, so I was often the only woman in the room (or at my level). It was challenging to ensure that my perspective and ideas were heard. I built as many relationships as possible with people who I knew supported and championed me. I also made sure I participated in discussions and meetings – if I was at the table, I was speaking up.
How could men contribute to support gender equality?
Lau: Mentor and sponsor women and give them equal access to opportunities. Give women credit. View women through the “people” lens – speak up and stop gender-biased language and descriptors (i.e. when a woman speaks in a direct style or promotes her ideas, she is often called “aggressive” and “ambitious.” But when a man does the same, he is seen as “confident” and “strong.”)
Can you tell us about your role model who have inspired you over your career?
Lau: I’ve admired many different women and men over my life. One piece of advice that stuck with me was “you deserve a seat at the table, and when you get that seat at the table, make it count”.
How important is it for women to lift each other up and what does that mean to you?
Lau: This is so important. I had very few female role models growing up and throughout most of my career. I wasn’t sure who had also experienced the same challenges I faced, and I didn’t know who to go to for support. This has made me even more aware of the need to support other women, no matter how small or big. Sometimes, people just need a listening ear or to know that someone else has gone through it before.
What is your favourite part of your job? And then the most rewarding?
Lau: Working in teams with colleagues and partners to solve problems is my favourite, and mentoring & coaching both women and men to help them grow and learn is very rewarding.
On International Women’s Day, what is the most important message you want to send out to young women thinking about their careers?
Lau: Be bold, try new things and don’t underestimate yourself. You won’t know unless you try – and if you need to, try again.
This is a guest post written by Shannon Flynn, managing editor at ReHack.com.
Across the world, open banking is creating opportunities for banks, fintech platforms, and individuals like never before. Open banking allows third-party sources to use a financial institution’s existing platform or resources to provide their own services. With consumer permission, open banking allows these outside sources to grow the industry and give power to the people.
However, some countries inevitably use open banking more than others. Currently, the United Kingdom and Saudi Arabia are two examples to follow. While the United States has made significant progress, it has a lot to learn from the countries that are leading this form of finance. That way, more opportunities open up for enterprises and consumers alike.
Where the U.S. stands
The U.S. is progressive in some ways with open banking. In others, it needs work. Notably, platforms like Venmo and PayPal expand on what’s possible for users. They allow you to make payments or transfer funds in the blink of an eye. However, compared to other countries, the States fall flat.
Big tech is currently a hot political topic due to the potential mishandling of user data. Though conversations like these are not uncommon elsewhere in the world, the U.S. needs to nail down some federal regulations. As of now, the U.S. still doesn’t have a federal-level law on data compliance. It’s up to each state to enforce its own regulations.
Brick-and-mortar locations may have an easier time following individual state guidelines, but the nature of open banking is inherently digital. These fintech services span across state borders, which makes compliance trickier without federal guidance.
For the country to proceed, the first step will be getting a universal law in place that shows banks and tech companies exactly how they must operate when it comes to compliance.
Engagement must increase
Open banking should welcome disruption. A country with a few centralized banks is one that does not allow for much disruption. Instead, only the top banks and tech companies have room to expand and create, leaving startups and smaller companies in the dust.
The U.S. has big tech companies like Apple, Google, Facebook, and Microsoft that each delve into new tech. For instance, Apple Pay and Google Pay let you buy on smartphones instantly.
The U.K. has an ideal open banking model that disrupts this lack of inclusivity. In 2018, the nation introduced the Second Payment Services Directive (PSD2). This initiative put an emphasis on increasing competition and creativity in the financial field. Ultimately, this directive wanted to create a more equal landscape between banks and fintech companies.
Since its introduction, 300 fintech brands have joined the new finance-oriented environment in the U.K. In the States, new brands pop up all the time. However, whether or not they stick and make an impact is a different story. The competitive market must change in the U.S. so more open banking innovation emerges.
Transparency is essential
People want to know what goes on with their data. They want to know who’s using it and for what — which inherently includes when third-party platforms are part of the equation. In a survey, almost 40% of respondents would reconsider their selected features if it meant a third party required access. This mistrust is a product of poor transparency throughout the industry.
Saudi Arabia recently expanded on its plans to make open banking more accessible for fintech companies. Through this process, transparency becomes a key factor. The Saudia Arabian Monetary Authority (SAMA), the central bank, will create a new initiative that focuses on bringing consumers into the loop.
With the increased use of technology for banking, investing, and mobile payments, more and more people rely on technology daily. SAMA understands this need to combine financial and digital literacy, doing so through open banking. With consumer permission, third parties can use data to connect the financial institution with personal finance services.
The U.S. must use the same tactics of bringing transparency and functionality together through open banking. That way, digital literacy in the U.S. incorporates access to quick purchases, investments, and transfers alongside a better understanding of how companies use data.
Changing the U.S.
Apps like Venmo and PayPal are a good start to open banking. You’ll find that newer fintech platforms, like Robinhood, Acorns, and MoneyLion are popular resources alongside the countless startups launching daily. While nourishing open banking features and fintechs is beneficial, the underlying theme is the most critical — more regulation is the key to widespread adoption. With it, the U.S. can then fully see the benefits of this form of finance.
ShannonFlynn is a technology and culture writer with two plus years of experience writing about consumer trends and tech news.
In a world of rebrands, reintroductions, and redirections, it is always impressive to see a pivot that sticks.
Moven, which announced its transition toward financial wellness and distributed smart banking a year ago this month, has teamed up with fellow Finovate alum Digital Onboarding. Together, the two fintechs will support user adoption of a turn-key digital bank-in-a-box, making it easier for banks and financial institutions to improve customer engagement on digital platforms.
“The pace of digital disruption in the banking industry is only going to quicken, and financial institutions have to rethink how they leverage digital channels,” Moven founder and Executive Chairman Brett King said. “Providing a new channel is one thing; getting existing and new customers to embrace that channel is an entirely different challenge, and frankly a tremendous opportunity for bankers.”
The partnership brings together Moven’s ability to provide users with data-driven, actionable insights into their financial health with Digital Onboarding’s digital messaging, personalized microsites, and proprietary action widgets to make account-related services more accessible and streamlined. The collaboration recognizes the challenge that digital banks represent to traditional banks and credit unions, and seeks to give them the tools to keep their own customers and better engage new, more digitally-demanding, ones.
“Neobanks are raising billions of dollars and investing heavily in advertising to lure U.S, consumers away from traditional financial institutions,” Digital Onboarding CEO Ted Brown said. “Now is the time for banks and credit unions to double down on investing in their existing customer and member bases. I am excited to collaborate with Moven to help banks and credit unions build long-lasting relationships by motivating financially health behaviors.”
The collaboration between Moven and Digital Onboarding is the most recent, big partnership Moven has entered into since its pivot. Late last year, the company announced that it was working on a turnkey digital bank-in-a-box project with another Finovate alum, Q2. Picking up its second patent for its financial wellness technology in January, Moven also has worked recently with New York-based digital asset manager NYDIG and Japan-based Kyushu Financial Group.
Speaking of NYDIG, the company secured $200 million in funding earlier this week in a round led by Stone Ridge Holdings Group and other strategic partners.
Moven will leverage its relationship with NYDIG to offer banks plugins that will enable them to offer bitcoin-related products. Moven CEO and CRO Kesh Talwar put the NYDIG partnership in the broader context of fintech and cryptocurrency’s parallel, but distinct paths toward prominence. “The growth of fintech platforms and of cryptocurrencies have both been striking, but the two worlds have largely been separate.” And because consumers are most likely to try new technologies when they are introduced by institutions they trust, Talwar sees a clear path to boosting cryptocurrency adoption by enabling banks to play a bigger part.
NYDIG Head of Bank Solutions Patrick Sells concurred. “Many banks have felt left behind with the rise of fintech, but today, banks have the opportunity to capitalize on the fact that their customers strongly prefer them to be in the lead when it comes to Bitcoin.”
In its biggest fundraising to date, U.K.-based challenger bank Starling Bank has secured ($376 million) £270m in funding. The Series D round was led by Fidelity Management and Research. Also participating in investment were the Qatar Investment Authority, RPMI Railpen, and Millennium Management.
Starling hopes to use the capital to grow its lending book and to expand throughout Europe. M&A activity is also on the table for the digital challenger. The fundraising, which remains subject to regulatory approval, will give the neobank a pre-money valuation of £1.1 billion.
Founded by Anne Boden and headquartered in London, Starling now has more than two million accounts, including 300,000 SME business accounts. Starling Bank says that it has 5% of the small business market in the country, as well as deposits of more than £5.4 billion. The firm has made loans valued at more than £2 billion – much of that while participating in the government’s COVID financial relief programs.
“Digital banking has reached a tipping point,” Boden said in a statement announcing the investment. “Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services. Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence.”
Starling reached profitability late last year. Since then, the company has forged partnerships with iZettle, Dingy Insurance, PensionBee, and Finovate alum SumUp. Boden has hinted recently that an IPO could be “two to three years” away for the digital challenger. “I didn’t do all of this to sell out to a big bank,” she said.
U.S. wealthtech player Betterment is building up its assets under management. That’s because the company acquired the U.S. investment advisory business of Canada-based Wealthsimple this week.
Terms of the deal– which notably does not include Wealthsimple’s technology, employees, or operations– were not disclosed.
“As we shift our focus to our Canadian business for the time being, finding a partner for our U.S. business that shared our commitment to putting clients first was our top priority,” said Wealthsimple Co-founder and CEO Michael Katchen. “It’s been a privilege to serve our U.S. clients, and we’re confident that their investments will continue to be in good hands with Betterment.”
To find a suitable home for its U.S. accounts, Wealthsimple selected Betterment in a competitive bidding process for its strong reputation and customer-first mentality. Wealthsimple’s U.S. clients will be moved over to Betterment in June of this year.
“This was an excellent opportunity for us to grow our customer base, and we’ll continue to be aggressive in opportunities that accelerate our business goals,” said Betterment’s newly-appointed CEO Sarah Levy.
As our recent conversation featuring Boss Insights founder and CEO Keren Moynihan, reminds us, the fintechs (and “TechFins”) of the Great White North are engaged in some of the most forward-looking innovation on the continent.
This week brings an above average volume of news from Canada’s ambitious real-time payments industry. For one, the Vancouver Bullion & Currency Exchange (VBCE) announced a partnership with EMQ to bring “near real-time” cross-border payments to businesses and consumers across Canada. A PSP as well as a foreign currency exchange, VBCE hopes that its partnership with the global financial settlement network will give its customers the ability to move money faster and more efficiently. The firm also anticipates being able to use EMQ’s network to bring new services to market and scale existing ones.
“The speed and reach of EMQ’s global network allows us to pilot new services in one market and scale them rapidly across others to meet the evolving customer needs,” VBCE VP of Business Development Kevin Ma said. “This is especially important for our business with a diverse product portfolio.”
Elsewhere on the Canadian real-time payments beat, Payments Canada announced a collaboration with debit network Interac to support real-time payments in the country. Interac will serve as the exchange solution provider for Real-Time Rail, the real-time payments systems operated by Payments Canada and regulated by the Bank of Canada. RTR, scheduled to go live in 2022, will enable Canadians to initiate payments and receive funds in seconds.
Payments Canada President and CEO Tracey Black said that RTR will be the “foundation for faster, data-rich payments” and will serve as a “platform for innovation.” Black also praised Interac as a “well-suited partner” with the requisite infrastructure and connectivity to support “the rapid adoption of real-time payments in Canada.”
Last, some developments on the Canadian neobank front. Toronto, Ontario-based challenger bank KOHO added a no-fee savings account to its offerings this week. KOHO Save gives account holders 1.2% interest on their entire balance. There are no teaser rates and no minimum balance is required to acquire an account, which is available on the KOHO app.
“We’re excited to add KOHO Save to our product line as a simple and valuable money earning tool for Canadians,” KOHO CEO and founder Daniel Eberhard said. “We’ve been able to build a savings tool that doesn’t follow the same restrictions of most other savings products on the market. People just want to access their money freely and earn a great interest rate. We think Save is a wonderful step in that direction.”
KOHO also offers a savings and checking account and gives users a minimum of 0.5% (up to 10%) cash back on all purchases. KOHO Premium account holders get an additional 2% cash back on three major spending categories. The company, founded in 2014 and headquartered in Toronto, Ontario, has raised $57.5 million in funding from investors including Drive Capital and Portag3 Ventures.
Here is our look at fintech innovation around the world.
Israel-based Rewire, a cross-border digital banking firm that serves migrant workers, announced $20 million Series B round led by Finovate alum OurCrowd.
What does International Women’s Day and #IChoosetoChallenge mean in practice, and what can be done to support and develop truly diverse teams? How does the world of fast-paced fintechs compare with legacy banking when it comes to embracing women in leadership, and empowering new voices to be heard from the bottom up?
Ahead of International Women’s Day, Charlie Burgess, Head of Digital Content for Finovate, sat down with Nicole Newlin, VP Solutions at Ocrolus and part of the Leadership Team at NYC Fintech Women, and Filippa Noghani, Head of Marketing – Banking and Financial Services at Virtusa and Board Member and Marketing Chair of NYC Fintech Women to talk opportunities and challenges, walking the walk of celebrating women, and why brands getting on-board with the IWD should look beyond making it just a marketing stunt.
Watch the full interview below. If you’re interested in finding out more about NYC Fintech Women, visit their page and learn more about the panel discussed, taking place at FinovateSpring Digital 2021 here.
“With more and more people around the world growing anxious about the consequences of climate change, the need for solutions and initiatives that empower people to take action to help protect our planet has become a business imperative,” Meniga CEO and co-founder Georg Ludviksson said.
Carbon Insight enables users to estimate and track how their spending decision impacts the environment via their carbon footprint. This footprint is derived via the Meniga Carbon Index, which was developed by a team of data scientists who leveraged environment research into the carbon emissions of various products and services. Carbon Insight works by multiplying spending transaction amounts by a “carbon intensity value” to give the user a reasonable carbon footprint estimate. This information can be used to help inform the user to which activities are potentially more environmentally impactful.
“We have seen great enthusiasm for our Carbon Insight product over the past few months, from banks and other key financial players, which is an encouraging sign from our industry that more green initiatives are still to come,” Ludviksson said.
As part of the partnership with Meniga, Íslandsbanki has agreed to integrate Carbon Insight into its digital banking solution. The Icelandic bank sees the new offering as a way to increase customer engagement and build on its environmental, social, and governance (ESG) strategy.
“Consumers are increasingly interested in improving their carbon footprint and having a positive impact on the environment,” Birna Einarsdóttir, Íslandsbanki CEO said. “Meniga’s Carbon Insight solution will enable Íslandsbanki’s customers to estimate the carbon footprint of their private consumption, identify carbon intensive purchases, and ultimately reduce their carbon footprint while saving money at the same time.”
Banking technology player PlaidannouncedPlaid Income this week, the company’s new income verification tool.
Income offers a secure and fast way to help consumers prove their salary in order to qualify for and secure loans, rent apartments, lease vehicles, and more. Lenders benefit from this data by being able to make better-informed risk decisions, issue pre-approvals or approvals faster, and allocate fewer resources to manually reviewing documents.
Plaid places consumers in control of their own data by offering them the option to choose whether to share their data. With Income, they can opt to share their salary information by connecting to their employer account, payroll provider account, or by verifying their salary using documents such as paystubs, W2s, and some 1099s.
To help users connect directly with their payroll provider, Plaid supports real-time payroll authentication for over 250,000 of the largest employers in the U.S. The company is also developing credential-less authentication capabilities with leading payroll providers, including ADP.
The new Income tool is part of the Plaid for Payroll suite, which also includes the company’s Deposit Switch offering launched earlier this year.
Plaid’s income verification tool is similar to an offering from its competitor Finicity, which launched its Verification of Income and Employment solution in 2019. Among Finicity’s clients are Freddie Mac, Quicken Loans, and Experian.
Interestingly, Finicity was acquired by Mastercard late last year, just days after the U.S. Department of Justice filed a civil antitrust lawsuit to block Visa’s ability to acquire innovative fintech.
