This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Cross-border payments platform Payoneerannounced a major development this week. The New York-based company unveiled Payoneer for Banks, a tool to help banks make and receive cross-border payments.
The company’s new bank partnerships will offer secure low-cost international payments made in real time using the banks’ existing infrastructure. “By integrating with our APIs, banks can offer a seamless cross-border payments experience to their customers with low investment, which offers the potential for additional revenues, enriched offerings for customers and a competitive advantage,” said Eyal Moldovan, General Manager of SMBs for Payoneer.
The company reports it has already signed on 10 banks, challenger banks, and eWallets in 10 countries and it is in the middle of launching more partnerships. Among the list of disclosed partners are ANNA Money in the U.K.; Bank Asia in Bangladesh; BSB Bank in Belarus; EasyPay in Armenia; GCash, the leading mobile wallet in the Philippines; eZ Cash in Sri Lanka; Faysal Bank and JazzCash in Pakistan; Kuda Bank in Nigeria; Privatbank and Monobank in Ukraine; and Prex in Argentina.
Payoneer noted that now is an ideal time for the bank-focused product since many operations are moving to digital channels and international payment capabilities remain slow and unreliable.
“We focus on creating a bank that customers would love, and that drives a lot of our decisions,” said Monobank Cofounder Michael Rogalskiy. “It was extremely easy to work with Payoneer, because we have the same shared values and the same ideas around money transfers. Our integration allows our customers to have a better user experience, lower fees, and faster access to their international earnings. It’s a relationship that brings value for us, for Payoneer, and for our shared customers.”
London-based identity verification platform Sumsub (which stands for “Sum & Substance”) raised $6 million in Series A funding this week. The round brings the company’s total funding to more than $7.5 million. With the additional capital, the company plans to intensify its product development initiatives, expand into new markets, and pursue its goal of more than 1,000 new SME and enterprise customers by the end of next year.
Sumsub co-founder and CEO Andrew Sever highlighted the compliance and risk management questions that global businesses face when operating in multiple jurisdictions, and pointed to his company’s technology as an answer. “We solve the issue by presenting teams with a single solution to drive customers and enhanced due diligence from one place, customizing the onboarding flow to any jurisdiction or requirement.”
Sumsub provides a single, AI-powered identity verification and compliance risk management toolkit that automates the identity verification process and boosts conversion rates to as high as 97%. The company’s technology offers accelerated ID verification, digital fraud detection, and compliance for businesses in more than 200 markets around the world such as the U.K., North America, Germany, Singapore, and Hong Kong, and has verified “tens of millions of users” since launch in 2015.
The Series A was led by MetaQuotes, a financial trading software development company. The round featured the participation of several existing investors, as well as individual investor Ilia Perekopsky, VP of Telegram messenger.
Earlier this year, Sumsub announced that it and another ID verification company Veriff, had partnered with international money transfer firm TransferGo. TransferGo Compliance Manager Milda Mačiulaitytė said Sumsub’s platform would enable TransferGo to not only deliver a “tailored money transfer experience” but also to make sure that experience provided in a compliant and secure way across all regions.
Everyone knows that just because something is digital doesn’t mean it can’t be interactive. Many times, in fact, the opposite is true, and that’s the case with this year’s FinovateFall Digital event.
Not only will the demos and discussion content be on-point, we’ll have lots of focused networking opportunities throughout the five-day event to enable you to make valuable connections Finovate is known for.
But the interactivity at FinovateFall extends far beyond networking. Here are five elements we’ve added to the digital show to make it even more “extra.”
Scavenger hunt
Attendees will earn points by watching content, connecting with attendees, exploring the Central Park map, and finding buried easter eggs. Be sure to attend the right sessions and accomplish all the activities needed to complete the hunt.
Donations
We’ve teamed up with No Kid Hungry as our charity partner for FinovateFall. Because of coronavirus, one in four children face hunger this year in the United States alone. Additionally, with physical school closures, the approximately 30 million children on free or reduced-fee school lunches will struggle to find a warm meal every day.
If 200 attendees donate just $25, we’ll meet our $5,000 goal for FinovateFall and No Kid Hungry.
Finshape
Public health officials say that exercise — while undoubtedly crucial under normal circumstances — is essential to your physical health and mental well-being during the COVID-19 pandemic. So as part of the event next week, we want you to take the time to focus on your health and fitness.
We’ve built in hour-long lunches and ended content by 4pm each day to make sure you still have time for your healthy habits. Track your total health and fitness minutes per day for the chance to win a raffle prize. Plus, exercising will also earn you points for the scavenger hunt.
On Demand content
While immersive, thought provoking and insightful, let’s not forget about the lighter side of events, too. The on demand exclusive content we’ve put together for the event explores the fun side of demoers, speakers, and attendees. Hear everything from their thoughts on industry trends to their favorite Halloween costume. The quick videos are not only informative, but also entertaining.
Almost three years ago, Jiko co-founder and CEO Stephane Lintner told TechCrunch that his company “at some point” would own its current bank partner.
Late last week, Lintner made good on that prediction. The former Goldman Sachs managing director announced that the challenger bank he founded in 2019 had completed its acquisition of $100 million asset, Mid-Central National Bank, a Minnesota-based retail bank that’s served its community for 63 years.
“The past decade of fintech and online banking innovations has exposed new customers to our industry and demonstrated that innovation in the financial sector is needed,” Lintner said. “People’s relationship to money must be fundamentally improved for everyone. One of Jiko’s primary goals is to give people what they deserve: more organic and direct returns, without intermediaries and unnecessary friction.”
Mid-Central National Bank’s three branches in Minnesota will continue to operate, post-acquisition.
What makes Jiko different from other challengers is that it invests customer deposits in liquid U.S.-government backed Treasury bills (T-bills) instead of holding them. To do this the company has developed a core infrastructure which combines payment rails with real-time, 24/7 principal trading capabilities in T-bills. Add to this the requisite banking and broker-dealer licenses, and you have a banking platform that provides customers with an investment that is also a liquid, spendable alternative to cash.
That said, the lack of FDIC insurance may give some potential investors pause. Additionally, interest rates on T-bills have plunged in recent months (the three-month T-bill is at 0.11% today compared to 1.93% just a year ago). Fintech Futures reports that Jiko accountholders earned an annualized 3.3% return last year while the service was in beta. FintechLabs’ coverage of the Jiko’s bank purchase notes that the company may be less concerned with these issues as it focuses on B2B and BaaS customers and partnerships.
Lintner has positioned his Oakland, California-based company near the front of fintechs becoming banks (witness Varo Money’s securing of a national bank charter over the summer). And courtesy of approvals from both the Federal Reserve Bank of San Francisco and the Office of the Comptroller of the Currency (OCC), Jiko is the first to do so by acquiring a nationally regulated bank. The company plans to add a cash-back debit card and tokenized bank account numbers by year’s end.
One of my favorite sayings popularized by the current Democratic Party candidate for president is “don’t tell me your values. Show me your budget.” The implication is that, at the end of the day, talk is cheap. Show me how you actually spend your money, and I’ll learn all I need to know about what matters to you and what does not.
By that metric, the news that Dutch fintech and Finovate alum Ohpen has acquired Saas-based, crossborder mortgagetech Davinci tells us quite a bit about what what the Amsterdam-based cloud core banking engine maker thinks about the importance of expanding beyond its competencies in savings, investments, loans, and current account products.
“We are a growing company with huge ambitions,” Ohpen CEO Matthijs Aler said. “Together, we intend to lead the charge in directly challenging incumbent providers with outdated technology. Our mission is – and always has been – to set financial institutions free from legacy software. Now we can help a broader range of financial institutions deliver tangible change to meet the needs of tomorrow’s customers.”
Ohpen put the acquisition announcement in the context of its global growth strategy. This includes scaling operations in the Netherlands – where the company is a market leader – the United Kingdom, and Belgium initially, as well as expansion to other areas. Ohpen also plans to scale up its development centers in Spain and Slovakia.
The terms of the acquisition were not disclosed, but the combined entity will have 350 employees and $35 million in revenue. Davinci is Ohpen’s second acquisition. The company purchased core banking system implementation consultancy FYNN Advice in the fall of 2017.
Davinci leverages machine learning and AI to enhance and accelerate digital onboarding and acceptance during the mortgage lending process. Delivering cost savings of as much as 80%, the company’s signature solution is Close, a cloud-native platform for mortgage loan origination and servicing.
Calling the acquisition, “the natural next step” for both companies, Davinci Director Alwin van Dijk said, “We are the only two players with a real focus on back and middle office innovation for new and existing propositions.” van Dijk added that the ability to offer a broader range of products will be a “market game changer.”
With $47 million (€40 million) in funding from investors including NPM Capital and Amerborgh, Ohpen began the year teaming up with pensions administrator TKP Pensioen. The partnership with the Groningen, Netherlands-based digital pension platform enabled Ohpen to enter the pension market for the first time. Aler pointed out that the integration would enable the “originally conservative industry” of pension management to have a “fully digital and futureproof pension solution at its disposal.” This spring, Ohpen partnered with another pension management firm, Ortec Finance, integrating the company’s forecasting engine with the Ohpen platform.
A look at the companies demoing at FinovateAsia Digital on June 22, 2021. Register today and save your spot.
Horizn’s award-winning platform helps financial institutions globally dramatically increase usage of digital offerings with both customers and employees. They drive digital awareness and digital adoption.
Features
Get customers and employees fluent on the latest digital innovation
Improve customer experience and drive digital adoption
Use self-serve with customers or assisted-serve with call centers and branches
Why it’s great Using Horizn, banks increase digital adoption by 25%. Horizn is partnered with 30+ banks globally including Wells Fargo, HSBC, U.S. Bank, RBC, M&T Bank, Scotiabank and more.
Presenter
Steve Frook, SVP Global Sales Frook works closely with financial institutions to significantly increase adoption and awareness of new and existing innovations.
A look at the companies demoing at FinovateAsia Digital on June 22, 2021. Register today and save your spot.
XcooBee’sRetail System is a new retail experience combining in-store carts with self-checkout and remote payment.
Features
No account, no app, fully transparent anywhere self-checkout
Capture new market segment through remote pay
Increase transaction sizes through add-on sales suggestions
Why it’s great Safe self-shopping is here. Shoppers love self checkouts. Retailers hate the cost. XRS bridges the divide and boosts sales and safety at the same time.
Presenter
Bilal Soylu, CEO Soylu is a serial entrepreneur with multiple startups in different industries, including supply chain, healthcare, IT consulting, and SaaS. He founded XcooBee with the mission to improve privacy and payments. LinkedIn
A look at the companies demoing at FinovateAsia Digital on June 22, 2021. Register today and save your spot.
The AuthoritiPermission Code platform eliminates fraud by allowing users to easily embed both their identity and transaction details in a digitally signed, tamper-proof Smart PIN.
Features
Outstanding CX – no passwords, no challenges, plus user control
Low cost – a simple, decentralized service, with no complex database
Absolute security – confirms “what” and “who” is authorized
Why it’s great Smart PINs literally encompass every aspect of a transaction: who, what, when, where and why. Even if a PIN is intercepted, it can only authorize the specific transaction that the user intended.
Presenter
Lou Steinberg, Chairman Steinberg’s CTM Insights incubator focused on cybersecurity. Prior to CTM, Steinberg served six years as CTO of TD Ameritrade where he was responsible for technology innovation, engineering and cybersecurity. LinkedIn
A look at the companies demoing at FinovateAsia Digital on June 22, 2021. Register today and save your spot.
Cirrus helps lenders double their production without adding staff, providing an improved experience for the borrower and banker alike. Built “by lenders, for lenders,” Cirrus saves 15 hours per loan.
Features
Turnkey solution to enable online loan applications
Transparent status updates for all parties involved
Ability to automate collection of documents for existing credits
Why it’s great Cirrus eliminates ‘document chaos’ using human-centered design and workflow automation.
Presenters
David Brooks, CEO With twenty-one years in the financial services industry, Brooks has deep experience in commercial banking. His mission is to save the banking industry ten million hours of wasted time per year. LinkedIn
John DeMoss, Chief Development Officer An innovative and strategic executive, DeMoss is a serial entrepreneur with extensive financial services experience and multiple successful exits to his credit. He leads corporate development at Cirrus. LinkedIn
Ahead of FinovateFall Digital next week, we hear from Chad Hamblin, Global Industry Director of Financial Services at Microsoft, one of Finovate’s Gold Sponsors. Hamblin exploreswhy success will come down to understanding and empathizing with your client. Dig a little deeper into this topic with Microsoft’s eBook on the topic: Reimagine the client experience in wealth management.
COVID-19 has put a strain on everyone. We’ve all navigated social isolation, uncertain investment projections, and remote work environments. Regardless of the experience, this time away has left a haze over individuals and organizations alike. We’re not just unsure what comes next, we’re questioning the very processes we’ve accepted to this point.
Investors are feeling a new tension that makes small pain points all the more obvious. Voice automation, fixed fees, commissions — what clients once accepted as the cost of doing business are suddenly under intense scrutiny. Clients aren’t obligated to trust a major firm with their financial future, and now they’re acting on the opportunity to move their money elsewhere.
So how can wealth management firms adapt their strategies (and identities) to regain that trust? It all starts with understanding the client.
A holistic experience
Over the years, many wealth firms operated under a one-size-fits-most model — if the client fell into a specific demographic, then the firm provided a specific portfolio. Empowered by the Digital Age and amplified by this pandemic, a growing number of modern clients are looking for a wealth management partner—someone willing to listen to their ambitions, dreams, and goals and recommend actions catered to their unique circumstances. These clients want to feel identified, seen, and valued; they want to feel like more than an account number. Organizations can deliver on that expectation by creating a holistic client experience — a strategic client approach that uses technology and relationship-building to create a more inclusive perspective on the client’s needs, interests, and ambitions.
Delivering a holistic client experience comes to life in three ways: portfolios, services, and communications.
Holistic portfolios understand the client’s dreams, goals, and life events and work to build the right mix of investments to meet that individual’s financial plan, risk preference, and goals. By moving away from cookie-cutter portfolios and embracing a consultative approach, advisors create a partnership built on trust.
Holistic services encourage firms to expand their capabilities to adapt to a changing world. In the last decade, clients have become jaded by fixed-fee models. At the same time, online resources have made wealth management more accessible. By shifting to a holistic client model, organizations expand their services beyond portfolio management and provide added-value services like financial advice and planning, risk mitigation, goal tracking, wealth building strategies, and even bring in experts for specialized areas like real estate, education planning, tax mitigation, and estate planning. By expanding into capabilities that they may not have focused on before, wealth management firms further align with the individual goals of their clients and can offer one-stop solutions.
Likewise, holistic communication leverages the client’s communication preference. Every company has multiple engagement channels—voice, text, email, chat, video, social media, etc.—but most organizations assume that every client wants to be contacted via every channel. Yet, modern tools can equip firms to democratize their client data to share information and insights. By consolidating data and communication streams into a single hub of truth and by providing that information via client-friendly channels, wealth management firms can ensure that clients are engaged in the mediums they prefer.
Adapting in real time
It won’t be enough to lag behind your clients, real time adaptations and analysis will count.
While holistic client experiences serve as the star of wealth management’s future, next-generation technologies will be the foundation of these efforts. Trending tools like AI, life event and goal tracking, market risk analysis, smart portfolio allocation, and project automation equip organizations with the tools they need to build more responsive, reliable offerings for clients.
Imagine how predictive analytic tools will help determine the stability of future investments or the time employees could save on data entry through automation. Today’s technologies grant employees the tools they need to deliver a holistic customer experience by making their day-to-day tasks more efficient and effective.
Investing in trust
By creating a holistic client experience, wealth management firms become a reliable asset during hardship and a celebrated ally in victories. Right now, clients around the world are reassessing their investments for fear of a future crisis. In many cases, COVID-19 has fundamentally upset the way many clients view wealth management and building. It’s up to firms to empathize with those concerns and shape their efforts to bring peace of mind.
With a multitude of wealth firms fighting for their dollars, today’s clients are increasingly taking their funds to firms that demonstrate a conscious effort to understand their ambitions beyond executing trades. Wealth management firms that position themselves as true advisors and champion the hopes and dreams of their clients can foster trusting and long-lasting relationships.
The alternative is a slow descent into transactional business, commoditization, and ultimately irrelevance. The holistic wealth management firm is prepared to advocate for the best interests of their clients.
For more insights into how today’s firms can steel themselves for tomorrow’s challenges, read Microsoft’s latest eBook.
We talked so much about the Buy Now Pay Later (BNPL) revolution in ecommerce that we are starting to sound like a broken record (someone please explain that reference to the younger millennials in the room). But the no-interest financing strategy is quickly becoming a must-offer feature for merchants, card issuers, and other players in the ecommerce ecosystem.
This week brings news that Zip Co, a digital retail financing and payments services company based in Australia, has agreed to acquire New York based Buy Now Pay Later company QuadPay in a deal valued at $269 million. One of the biggest BNPL companies in the U.S, QuadPay will enable Zip to expand its reach to five countries (Australia, New Zealand, South Africa, the U.S., and the U.K.), a combined annualized revenue of $182 million (AU$250 million) and 3.5 million customers.
Aside from the company’s co-founders, Adam Ezra and Brad Lindenberg, Zip was the largest shareholder in QuadPay. Ezra and Lindenberg will join Zip’s global leadership team post-acquistion with the responsibility of scaling business in the U.S.
Hungry for good news on the fintech funding front? Gaze no further than Latin America where a new report from KoreFusion highlights growth in smartphone ownership, ecommerce adoption, and dissatisfactioin with banks as just a few of the reasons why Latin America’s fintech boom is ust beginning.
The study, available for free from the San Francisco, California-based consultancy, is based on a study of more than 1,000 fintechs in Argentina, Brazil, Chile, Colombia, and Mexico. In addition to a survey of the fintech landscape – finding a concentration in the payments category with lending and B2B-based fintechs coming in second and third, respectively – the report underscores other areas – such as remittances and foreign exchange – where it believe major opportunities remain.
Read more in KoreFusion’s 2020 Latam Fintech Report.
Here is our look at fintech around the world.
Central and Eastern Europe
German regtech 4Stop partners with payment service provider emerchantpay.
ACI Worldwide announces that its technology helps power 75% of real-time payments in Hungary.
German P2P lender auxmoney raises $177 million (150 million euros) in growth capital.
The following is a guest post from Scott Raspa, Head of Marketing, Hydrogen.
The European fintech scene has experienced tremendous growth over the last few years. One of the key drivers of this growth is open banking. This is causing financial institutions and fintechs to partner together to provide more innovative, user-friendly solutions for consumers throughout Europe.
European consumers are receptive to the idea of non-financial players offering financial products, according to EY’s Global FinTech Adoption Index 2019. The survey finds that fintech adoption throughout Europe, especially in countries such as the Netherlands, U.K., Germany, Sweden, and Switzerland, are well above the global average of 64%, and aren’t showing signs of slowing down any time soon.
Below is a list of the top 50 fintech companies in Europe, based on their valuations.
These companies have raised over $16.8B (€14.3B) in venture capital funding and are valued, collectively, at over $92B (€78B).
The U.K. fintechs are valued at nearly $40B (€34B). The Netherlands are second, all thanks to Ayden, the most valuable fintech in Europe.
The U.K. has also invested the most money, nearly $11B (€9.4B), almost 65% of the funding of these top 50 fintech companies. After the U.K., Germany and Sweden have invested the most with 12.9% ($2.1B / €1.78B) and 12.4% ($2.0B / €1.7B) of the overall funding, respectively.
Fintech Enablement in Europe
Here at Hydrogen we work with companies all over the world. Our award-winning fintech enablement platform enables organizations to quickly and easily build fintech products and components. Whether you want to offer a PFM app in France, a challenger bank in the U.K., or issue cards in Germany, Hydrogen is here to help. Hydrogen has pre-built integrations, workflows, business logic, and UI already built in and available in white labeled/no-code modules or through our robust API.
It’s free to get started, so start building with Hydrogen today!
*Note: Funding information was provided by Crunchbase.com and the Euro, Pound, and US Dollar conversions were based off of today’s conversion rate. Also, total funding amounts didn’t include public companies or companies where we couldn’t identify the funding received.
