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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
ABN AMRO is updating its Grip app this week by integrating Subaio’s white label subscription management feature for banks.
The integration comes at a time when users are spending more than ever before on subscriptions, especially digital subscriptions such as movie streaming services and cloud storage products. According to the New York Times, consumers spent an average of $640 on digital subscriptions in 2019, up 7% from 2017.
ABN AMRO’s Grip PFM app now leverages Subaio’s subscription management feature that enables users see all of their recurring payments in one place. The tool alerts users of any changes in subscriptions and even helps them cancel subscriptions from within the app. Subaio relies on an algorithm that uses machine learning to detect patterns in frequency, amount, merchant name, and more.
“Since the launch we’ve already seen tens of thousands of Grip users coming in to see their overview and also cancel subscriptions. It’s fantastic to help people get control of their subscriptions,” said Subaio CEO Thomas Laursen.
Today’s partnership with ABN AMRO is Subaio’s seventh bank partnership. Among the company’s other partners are Nordea and challenger bank Lunar. The company has found that the average user has eight different subscriptions, and that the users are saving $253 (€213) every time they use Subaio’s solution to cancel a subscription.
Founded in 2016, Subaio showcased at FinovateEurope 2020. The company has raised $2.4 million and has 20 employees.
“Buy Now Pay Later” may be the e-commerce rage du jour. But if you check in with the team from Inspirave, then you’ll hear about a better way for consumers to spend and save. The New York based company – which we profiled last fall – unveiled its SaveAway platform this week, enabling consumers to benefit from its unique blend of “financial planning with the path-to-purchase.”
“There has never been a better time to see Inspirave’s economically sustainable blueprint, propelled by greater purchasing power, striking such an inimitably strong chord with our growing community of SaveAway users and partners who recognize that what inspires our new-to-market innovations enabling greater financial wellness and social mobility is our steadfast mission to further human potential and prosperity for all,” Inspirave founder and CEO Om Kundu said in a statement.
SaveAway’s unification of micro-saving and social commerce offers consumers a way to save for the things they really value and avoid purchasing these same items with credit and accumulating unnecessary debt in the process. Aided by the insights, advice – and even material support – of friends and family, consumers using the SaveAway platform can leverage the collective wisdom of those who know them best and care about them the most to help them make financial decisions that are as responsible as they are affordable.
Miguel Sanchez and Philip Shearer, co-founders of diversity-focused accelerator MetaBronx, praised both the Inspirave’s innovation and its approach to spending and saving. “What made the SaveAway platform stand out in the top six companies chosen in 2020 derived from the breakthroughs in Inspirave’s patented technology as much as its novel operating model, pointing to the massive impact SaveAway is moving forward to uniquely deliver,” they said.
The company noted in its statement that those who signed up for Early Access to the SaveAway platform are eligible for a variety of bonuses, including referral credits and entry into a sweepstakes for a $1,000 contribution toward the winner’s SaveAway purchase-goal to be paid by the company. More than 12,000 people have signed up for Early Access to date.
Named a a Top Fintech Forward Company to Watch by American Banker and BAI, and A Finovate alum since 2016, Inspirave is headquartered in New York City.
What’s to like about FinovateFall Digital, our all-digital fintech conference starting Monday, September 14th and continuing through Friday, the 18th? A CEO from one of our demoing companies pointed out that one of the special things about this fall’s conference is that because the FinovateFall is all-digital, it enables people all over the world to participate as virtual attendees.
With this in mind, we wanted to use this week’s Finovate Global to highlight those companies from outside the United States that will be demonstrating their latest fintech innovations as part of our annual autumn event. Here’s hoping they bring a few friends from across the border – or from over the sea – to digitally join us!
Cinchy – Toronto, Ontario, Canada. Provides a real-time data collaboration platform to solve data integration, access, governance, and solution-delivery challenges. Finovate Best of Show Winner. Founded in 2014.
DQ Labs – Bangalore, Karnataka, India. Offers a unified suite of modules that enables companies to unlock the value in their data to gain new insights. Founded in 2019.
Horizn – Toronto, Ontario, Canada. Helps banks and financial institutions dramatically increase digital adoption. Finovate Best of Show winner. Founded in 2012.
Mostly AI– Vienna, Wien, Austria. Enables companies to unlock privacy-sensitive data assets while protecting privacy. Founded in 2017.
Payever – Hamburg, Germany. Offers a Commerce Operating System to help entrepreneurs start, run, and grow their businesses. Founded in 2013.
ScientiaConsulting – London, U.K. Leading fintech consulting and development firm in Europe. Founded in 2010.
Join us next week for Finovate’s latest all-digital fintech conference. Visit our registration page today and save your spot at our live and On Demand event.
Digital Currency Comeback?
Back in January Finovate Global took a look at the growing case for national digital currencies. We highlighted initiatives in countries as different as India and Japan, and underscored observations from Christine Lagarde (former head of the IMF and current president of the European Central Bank) in her address, “The Case for New Digital Currency”.
Now Ms. Lagarde is back in the news hinting at a near-term resolution to the question of a digital euro. In a speech this week at the Bundesbank’s conference on digital banking and payments, Lagarde argued that Europe must be wary of falling behind when it comes to the development of digital payment options, and that consideration of a national digital currency needs to be a part of that conversation.
“The Eurosystem has so far not made a decision on whether to introduce a digital euro,” Lagarde said. “But, like many other central banks around the world, we are exploring the benefits, risks, and operation challenges of doing so.” Lagarde added a taskforce on development of a digital euro is expected to release its findings “in the coming weeks.”
Open Banking All Over the World
We recently investigated the prospects for open banking in Australia. This week we share an overview of the state of open banking in Switzerland courtesy of Fintech Zoom’s Jung Min-Seo.
“Europe may moderately declare to be the cradle of open banking,” Min-Seo wrote, “however in contrast to within the E.U. the place members are obliged to implement PSD2, a directive meant to opening up cost transactions to non-banks and promote competitors, Switzerland has no such regulation in place.”
TechWire Asia looks at how Amazon is leveraging its relationship with India to grow its fintech offerings.
Proving that cash is still alive in India, RapiPay, a subsidiary of Capital India Finance, will install 500,000 micro ATMs in the country over the next two years.
Latin America and the Caribbean
Caribbean-based fintech WiPay teams up with Mastercard to expand digital payments in the region.
Austria’s Paysafecard announces expansion into Mexico.
Mexican fintech Ubank, which offers an automated savings solution, plans to expand to the United States.
Asia-Pacific
Revolut goes live in Japan.
Onfidobrings ID verification to migrant worker e-marketplace, MyCash Money, which serves workers in Malaysia and Singapore.
Backbasepartners with Vietnam’s Tien Phong Commercial Joint Stock Bank (TPBank) to speed the institution’s digital transformation.
Sub-Saharan Africa
Nigerian fintechs Opay and PalmPay, along with South African e-payment firm, Yoco, are the only three Africa fintechs to earn spots on CB Insights’ 2020 Fintech Top 250.
Ozow, a digital payments company based in South Africa, launches its new payments platform.
Nigeria’s Sparkle announces plans for digital distribution of insurance solutions.
Central and Eastern Europe
Blockchain analytics firm Chainalysis praises Ukraine as the country with the greatest rate of cryptocurrency adoption in a new report.
Hungarian biometric payment startup PeasyPay announces plans to expand to Spain and the U.K.
Balkan Insight reviews the fintech ecosystem in Croatia.
You know that buy now, pay later (BNPL) has jumped the shark when even Cosmo is writing about it. After all, BNPL is basically millennials’ way of reverse engineering the layaway programs their parents grew up on.
Not only have we recently witnessed new fintechs launch their buy now, pay later technology, we’re seeing a large increase in incumbent players expand their existing services to include BNPL offerings, as well. Just yesterday, Fiservannounced its BNPL payment option in partnership with QuadPay, and today Standard Charteredpartnered with Amazon to offer installment payment plans for customers in the UAE.
While each of the now dozens of BNPL schemes operate a bit differently, most allow the consumer to split up a purchase into multiple installments and repay over a set period of time without incurring interest. As with everything that seems too good to be true, however, negative externalities exist. Here’s a breakdown of the hidden (and not-so-hidden) costs:
The BNPL company
If a consumer makes a purchase and fails to pay one or more of the installments, the BNPL company is generally the one who feels the loss. To mitigate their losses, however, companies generally won’t allow customers to make repeat purchases if they default on a repayment. Not only this, most charge late fees and high interest (some charge up to 30%) to reclaim what they can.
The consumer
The end consumer is always responsible for knowing the repayment arrangement. However, mistakes happen and if the buyer is unable (or forgets) to pay one of the installments, they face multiple costly consequences. As mentioned above, the consumer in default generally faces a late fee. Klarna, for example, charges $35 per month for missed payments. Additionally, while most BNPL offerings are interest-free, some charge high interest on missed payments.
Merchants
Merchants have a pretty good end of the deal when it comes to BNPL. Many offerings allow them to receive the full amount of the buyer’s purchase up-front, and they are not on the hook if the buyer defaults. Some, such as Splitit, allow the merchant to choose a lower fee if they receive the payment as the consumer repays their monthly installments.
The pricing model for merchants vary. Among some of the fees that BNPL companies advertise are: up to 6% plus $0.30 per transaction, 1.5% plus $1.50 per transaction, or 3% plus $1 per transaction.
Banks
While the banks typically aren’t a party to BNPL transactions, these new payment schemes are still costing them. How? Many shoppers are using BNPL to circumvent credit cards, which charge compounding interest each month. For users that are in the habit of financing large purchases, it makes more sense to pay for the purchase over the course of four months, interest-free, than to incur credit card debt by only paying the minimum balance.
Independent lockbox and electronic payments provider CheckAlt has acquired software and engineering company U.S. Dataworks from The Bankers Bank of Oklahoma. Terms of the deal were not immediately available.
CheckAlt CEO and co-chairman Shai Stern put the purchase in the context of upcoming challenges related to the COVID-19 pandemic and the 2020 election. “Recognizing that the U.S. Postal Service is going to be overwhelmed and distracted with mail-in voting and other impediments to normal delivery, we must enable additional solutions for our clients to capture payments on-site, remotely, or through any one of our 13 lockbox processing centers around the country,” Stern said.
“Moreover, between the hundreds of financial institutions that both CheckAlt and U.S. Dataworks serve directly, we now have further reach to offer our full suite of payment solutions which include not only paper processing but as well our Catch! product and card processing services.”
With more than 300 financial institution partners, CheckAlt offers financial institutions and commercial clients a range of lockbox and payment processing solutions. These include a full set of check imaging products that provide consolidated item processing across all channels and points of capture: mobile, ATM, and in-branch. The company also offers standard payment processing solutions and services such as credit card processing, integrated receivables, and merchant RDC.
The U.S. Dataworks acquisition marks CheckAlt’s third in six years. The company bought ERAS, a security systems provider, in 2014, and acquired financial services provider Klik Technologies, two years later. CheckAlt’s acquisition announcement comes at the end of a busy summer for the Los Angeles, California-based company. CheckAlt announced an expansion of its partnership with Pawtucket Credit Union ($2 billion in assets) in June, teamed up with Five Star Bank of California ($2 billion in assets) in July, and collaborated with NXTsoft’s OmniConnect to enhance its ability to integrate with credit unions, core providers, and banks.
Founded in 2004, CheckAlt made its Finovate debut last year at FinovateFall. The company demonstrated its LoanPay solution, which enables financial institutions to accept a wide variety of loan payments – from auto and business to mortgage and personal – from their customers. The solution enables customers to use debit, credit, and checking accounts to make both one-time and recurring payments in person, via mobile, or online.
Challenger banks have been slowly making their way into the mainstream banking sector. By offering competitive rates, unique services, and digital-first user experiences, this new breed of banks has disrupted the traditional banking scene, causing some incumbents to rethink their approach.
This certainly seems to be the case with Credit Suisse, a 164-year-old bank. The Switzerland-based firm is steeling itself against challengers by launching its own digital bank, CSX. The new offering aims to be a hybrid approach between challengers and incumbents, and “combines the flexibility and cost effectiveness” of a digital bank with “the comprehensive range of services and expertise” of a traditional bank.
“CSX is intended for all private clients in Switzerland who want to complete their banking business swiftly and easily and who value digital, professional financial advice,” said Anke Bridge Haux, Head of Digital Banking at Credit Suisse. “Of course, we are still available to serve our clients in person. CSX clients can decide for themselves how they want to interact with us, depending on their individual needs.”
In order to serve clients from a range of demographics, Credit Suisse’s new digital bank will be divided into two offerings, CSX and CSX Young. Both take a mobile-first approach, from onboarding to a virtual debit card. Credit Suisse will launch the two accounts at the end of next month. After launching, the app will add services including investments, pensions, and mortgages.
In conjunction with today’s digital banking announcement, Credit Suisse also unveiled plans for a new concept branch that focuses on personalized advice. The bank is piloting the new concept at a new branch in Zurich and is building out the idea with a Digital Bar that offers interactive, personalized advice via video conferencing. Branch locations will also include co-working spaces, multimedia group rooms, and an event zone that can be booked by third parties.
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.
