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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A look at the companies demoing at FinovateFall on September 14-16, 2020. Register today and save your spot.
MODIFI is solving trade finance for SMEs globally. Their online platform allows SMEs to get the trade finance they need. Simple, flexible and transparent, they empower businesses to trade internationally.
Features
Speed: Apply for finance in under 10 minutes
Growth: Improve cash flow and grow businesses
Global: Worldwide platform available 24/7
Why It’s Great Trade finance is an old and broken industry. MODIFI’s platform removes the inefficiencies to give SMEs rapid access to the finance they need to trade and grow.
Presenters
Nelson Holzner, CEO & Co-Founder Lawyer, turned private equity investor, turned serial entrepreneur, with 20 years of professional experience in top international firms, startups and high growth companies. LinkedIn
Sven Brauer, COO Expert in European Fintech & Banking industry, especially the German lending space with consumer credit market for B2C + B2B lending, such as working capital financing. LinkedIn
The five-day World Economic Forum wrapped up late last month. The event, based in Davos, Switzerland, hosted some of the brightest minds in the world to speak on some of the biggest issues facing our society today.
We combed through the agenda to bring you a view of the discussions through a fintech lens. Here’s a summary of some of the most interesting fintech-related topics covered at the global event.
Shaping the Future of Financial and Monetary Systems The majority of this session wrestled with digital transformation. One of the overarching themes in this discussion as it related to digital transformation was the idea that we’ve recently reached a major inflection point in the banking industry. That is, banks are no longer adding products and services to their existing models, but the very nature of how they operate is beginning to change. And as these changes happen, banks can only move as fast as their customers are willing to move alongside them.
Shaping the Future of the Digital Economy This panel represented a range of industries. Specific to the financial services industry, PayPal CEO Dan Schulman said he expects the fintech industry to see more innovation in the next five years than it has seen in the last 30. The cause of this development speed comes down to AI. Along with AI, digital transformation was another hot topic. The panel agreed that digital transformation has opened up new opportunities and in many cases requires firms to revamp their entire business model.
From Token Assets to a Token Economy This session sought to answer the question, “how can tokenization make illiquid assets accessible without creating new financial risks?” The panelists explained how tokenization makes fractional ownership possible with physical goods, such as a famous painting or a piece of real estate. One overarching theme that pulsed throughout the discussion is that global regulation is behind in the tokenized asset realm. So while technology may be advanced enough for a tokenized asset economy, we are still many years away from it being commonplace.
How to Implement Responsible AI The World Economic Forum has teamed up with the government of Singapore to create a model framework of governance for the use of AI. This panel discussed the new framework and how it addresses the explainability of AI, which aims to be simple enough for all players to understand. As a part of the effort, the group has also released a toolkit for boards of directors to understand how to conduct AI oversight.
The Real-World Impact of 5G This session hosted representatives from Verizon, Qualcomm, and ABB. The group addressed political and policy issues around security and trust. Secondary to the conversation were social concerns. The first considered if 5G will cause a digital divide between societies that have 5G and those that do not. The other social concerns addressed were potential climate change and health concerns.
Global Cybersecurity Outlook The general consensus of this panel is that we are currently losing the battle of cybersecurity. The panelists looked at who is ultimately responsible to act as the authority to govern fraudsters, discussed the balance between security and consumer privacy, and considered whether businesses’ cybersecurity spending is happening in the right areas. Finally, the panelists concurred that security is not an IT problem, but that it is a business problem and everyone at the organization should be a security expert to some extent.
Creating a Credible and Trusted Digital Currency This discussion looked at opportunities, challenges, and concerns around digital currencies. The panel acknowledged that digital currency adoption has a certain and definite future. Representatives addressed real use cases, including cross-border payments, financial inclusion, and fraud prevention. Among the discussion points were stablecoin competition, central banks’ participation, as well as cultural effects. Much of the dialogue circled back to digital currencies issued by central banks (CBDCs).
The combination of Worldline and Ingenico will create the world’s fourth largest payment services provider with 20,000 workers in 50 countries serving nearly one million merchants and 1,200 financial institutions.
Worldline announced today that it would acquire Ingenico for $8.6 billion (€7.8 billion) in a stock and cash deal. The combination would give the new entity broad reach across Europe – blending Ingenico’s strength in Germany, the Nordic countries, and France, with Worldline’s strong presence in Switzerland and Austria. The acquisition also will help the companies expand and take advantage of opportunities in the U.S., Asia, and Latin America.
Worldline Chairman and CEO Gilles Grapinet will be CEO of the combined entity. Bernard Bourigeaud, Ingenico Chairman, will take the role of non-executive Chairman of the Board of Directors once the deal is closed.
“I am proud to announce that today is a great day for Worldline and for Ingenico, and more widely for our Payment industry,” Grapinet said in a statement. “Together we create the European World-Class leader in digital payments.” In praising the Ingenico team and its leadership, Grapinet also highlighted two areas – online payments and merchant acquiring – where he expected the new entity to excel.
In his statement, Bourigeaud put the deal in the context of the other recent mega mergers – FIS and Worldpay, Fiserv and First Data, TSYS and Global Payments – in the payments space. “The combination of Worldline and Ingenico offers a unique opportunity to create the undisputed European champion in payments on par with the largest international players,” he said. “This transaction comes at (a) time of accelerating consolidation of the industry and I am convinced that the joined forces of both leaders will deeply transform the industry.”
Worldline estimates that the new company will have projected 2019 net revenues of $5.8 billion (€5.3 billion) and operating margins of $1.3 billion (€1.2 billion).
An alum of our FinovateEurope conference, Worldline demonstrated its Worldline Connected Piggy Bank solution at our London event in 2017. The offering helps provide financial education for children, encouraging savings at an early age by combining an actual, physical piggy bank with a mobile app and savings account.
Opentech has leveraged Mastercard Send APIs to offer a new solution, OpenPay Send, that will give financial institutions across Europe powerful money transfer capabilities.
“Opentech’s mission is to be the enabler of digital payments
for banks, leveraging state-of-the-art infrastructures to build highly reliable
and flexible solutions, ready to be deployed to the end user,” Opentech CEO Stefano
Andreani said. “The partnership with Mastercard and the integration with their worldwide
network is a perfect fit to our strategy, bringing a great value and
convenience to our customers.” Andreani called OpenPay Send “an important
addition to our offering.”
OpenPay Send will also enable firms to offer a broad range of services – from remittance and micropayments to insurance claim distribution and real-time P2P payments. Available via a single integration, the solution helps institutions transfer money to more than 100 corridors – including as many as three billion bank accounts – as well as mobile wallets, payment cards, and cash-out locations worldwide.
The new technology gives banks and other FIs the flexibility to tailor its offering, specifying which countries and sending channels to be activated, and at what costs. OpenPay Send also features a customizable UI for both mobile and web, as well as an administrative portal. Opentech will demo OpenPay Send later this month at FinovateEurope in Berlin, Germany.
Mastercard’s Arne Pache, VP of Digital Payments and Labs, praised the collaboration as an example of how the Mastercard Send platform improves the process of global money transfer. “(We) designed the Mastercard Send platform envisioning a better, faster, and smarter way to send money all over the world in multiple ways by leveraging our expertise and the existing relationships with our customers.” Pache added that the partnership with Opentech and launch of OpenPay Send “brings this vision to life.”
Opentech demonstrated its white-label mobile app, OpenPay for Business, at FinovateEurope 2018. The company is headquartered in both Italy and Switzerland.
Here is our weekly roundup of the latest news from our Finovate alumni:
Revolutoffers free airport lounge access to users if their flight is delayed by more than one hour.
Billtrust’s Business Payments Network is now integrated with Corporate Spending Innovations to enable their customers to automate supplier payment delivery.
Voleotaps Glen Wilson as its interim CEO. Company founder Thomas Beattie will remain as Voleo CCO.
Xignite now available in Amazon Web Services (AWS).
Jack Henrylaunches core-agnostic banking platform.
DefenseStormreports zero attrition and 50% customer growth in 2019.
FISpartners with alternative SMB funding company LiberisFinance.
Pacific Service Credit Union selectsDigital Onboarding to enhance member onboarding.
Quidmerges with social media analytics company NetBase.
ndgit and Konsentuspartner for PSD2 compliance. This week, ndgit also released version 2 of its API platform.
Arxan Technologiesrecorded 30% subscription growth in 2019.
Here’s How Far We’ve Come with Voice AI in Customer Service – When it comes to customer service, even in-person interactions can be unpleasant. And doing business over the phone is usually markedly worse, especially if there is a bot involved. There is one fintech fighting that stereotype, however.
Currencycloud Raises $80 Million in New Funding – B2B cross border payments innovator Currencycloud has locked in $80 million in new funding.
Citi Unveils Digital Investment Platform Powered by Jemstep – Launched by Citi last week and powered by Jemstep, Citi Wealth Builder is the latest addition to the world of digital investing platforms.
LendUp Tops $2 Billion in Consumer Loans Mark – Since its launch in 2011, socially responsible lender LendUp has surpassed $2 billion in consumer financing via its digital lending platform.
FICO Suite 10 Brings New Precision and Flexibility to Credit Scoring Decisions – The new technology from FICOleverages trended credit bureau data to boost its predictive power, enabling lenders to make more precise decisions on credit risk.
Splitit Taps Stripe to Facilitate Merchant Onboarding for Payment Installments – The agreement makes Stripe the payment facilitator for all new merchants who onboard with Splitit.
Also on Finovate.com
PSD2 Turns Two: Where Do We Go From Here? – Break out the PSD2 birthday cake! On January 13 the Second Payment Services Directive (PSD2)– what we now generally think of as open banking– turned two years old.
Digital Dollars and E-Euros: The Case for National Digital Currencies – In recent weeks and months, we’ve heard news of a growing number of central banks investigating the pros and cons of digitizing their money supply.
Stop Looking at Your Customer Base as a Faceless Mass – f you ask Balázs Vinnai, president of W.UP, one size does not fit all when it comes to banking. In fact, his company’s entire premise is built around creating a personalized user experience.
Follow the Money: FinovateEurope’s VC All Stars Talk Fintech Investment in Europe – This year at FinovateEurope, we’ve added a panel called Investor All Stars. It’s stacked with investors who will offer up their take on the top topics for venture capital funding in fintech.
Citi Wealth Builder is the latest addition to the world of digital investing platforms. Launched by Citi this week, the new solution features a low initial investment of $1,500 and no advisory fees for Citi Priority and Citigold clients on their initial portfolios. Citi Wealth Builder is powered by Jemstep, which demonstrated its digital advisory technology at FinovateSpring in 2013.
“We have worked closely with Citi to configure the Jemstep digital advice platform to provide a compelling client experience that supports Citi’s value proposition, omni-channel delivery capabilities and robust operational and compliance requirements,” Jemstep CEO and President Simon Roy said. Based in Los Altos, California and founded in 2008, Jemstep was acquired by Invesco in 2016.
Citi Wealth Builder works by pairing customers with one of six portfolios based on the customers’ responses to questions about their investment preferences and goals. Factors ranging as the customer’s ability to tolerate volatility to the current amount the customer already has saved are used to help ensure a good fit between customer and portfolio. The technology works automatically, monitoring and rebalancing the investment allocations; customers have the ability to adjust investment levels and see in real-time how those changes likely will affect investment outcomes.
“Citi Wealth Builder makes it easy for clients to start investing so they can reach the next level of their financial journey,” Head of Citi U.S. Consumer Wealth Management John Cummings said. “It’s part of Citi’s holistic approach to banking and wealth management. In just a few minutes, customers can start building a solid foundation for years to come.”
The new release from Citi comes a year after the firm’s launch of Citi Wealth Advisor, which gives Citigold clients their own relationship team to help them design and implement personalized financial plans. The unveiling of Citi Wealth Advisor was accompanied by Citi’s announcement that it would offer commission-free trading on ETFs and new-issue U.S. Treasury purchases for Citigold clients.
India is the latest country to announce that it is looking into development of a national digital currency – or what’s known in the industry as a Central Bank Issued Currency (CBDC). In recent weeks and months, we’ve heard news of a growing number of central banks investigating the pros and cons of digitizing their money supply. Japan announced last week that it is considering the advantage of a “digital yen.” The Central Bank of the Bahamas is also examining the issue, as is, ahem, North Korea. Tunisia made fintech headlines last fall when a Russian news agency reported the country had digitized its currency. But Tunisian authorities have since denied the story.
The case for digitizing national currencies includes the idea that, at a minimum, central banks need to keep up with – if not get ahead of – the trend toward the digitization of money. More constructively, central bank-issued digital currencies (CBDC) could provide significant benefits in terms of reducing the costs and risks to the payments system and, according to a 2018 report from the IMF, “could help encourage financial inclusion.”
However as the report makes clear, there are a wide variety of risks associated with CBDCs – the most immediate of which may be a simple lack of demand. The IMF’s Christine Lagarde made the point a few years ago in her address subtitled “The Case for New Digital Currency,” delivered at the Singapore Fintech Festival. The same “winds of change” that are driving central bankers to consider digitizing the money supply are also stimulating innovation in other forms of payment and value-storage. Any digital currency issued by a central bank still would have to compete with digital payment and value-storage offerings from the private sector.
In some ways, this is the most interesting consideration in the debate over digital currencies. Issues of safety and anonymity remain paramount, and themes like regional specificity remind us that what works for one geography may not work for another. But it is increasingly easier to imagine a world in which digital national currencies exist than it is to imagine a world in which they do not.
For more on the national digital currency movement around the world, check out Stephen O’Neal’s in-depth examination of the topic in Cointelegraph from the summer of 2018. O’Neal divided the world of state-issued currencies into the Adopters, the Rejectors, the Experimenters, and the Researchers. Note that Tunisia, as reported above, is no longer in the Adopters category, however the country’s central bank did note that it is “exploring” digital payment options including CBDC.
Additionally, some of the countries that have rejected national digital currencies have appeared to reconsider in recent years. A report from last fall suggested that private bankers and lenders in Germany, for example, have expressed interest in a form of “digital central bank money.”
This week on the Finovate blog we celebrated the second birthday of PSD2 in Europe, and highlighted the advances Israeli startup and Finovate Best of Show winner Voca.ai has made in deploying voice AI in customer service. We also previewed our upcoming FinovateEurope Venture Capital All Stars presentation on fintech investment trends in Europe.
Here is our weekly look at fintech around the world.
Asia-Pacific
Contour, a blockchain-based trade finance platform headquartered in Singapore, announces investment of undisclosed size from Standard Chartered.
Malaysian cross-border payments company Tranglo integrates with Ripple.
Digital-only banks may be coming to Thailand as the country’s central bank considers offering digital banking licenses.
Sub-Saharan Africa
South African fintech Oyi launches prepaid medical savings card.
Inlaks, a Nigeria-based ICT infrastructure solutions provider, introduces new line of “ultramodern” ATMs that feature the ability to access customer service via a live video connection.
FinTech4U Accelerator names the five Zambian fintechs that will join its program this month.
Central and Eastern Europe
Leading browser provider Opera acquires Estonian banking-as-a-service startup Pocosys.
German fintech Heidelpay is on the hunt for acquisition opportunities and is considering an IPO.
EU Startups features Cashpresso in its look at top Austrian startups to watch in 2020.
Middle East and Northern Africa
Arab News features Nosaibah Alrajhi, founder of Shariah-compliant P2P lending platform Forus, scheduled to go live in Saudi Arabia later this year.
Al Khaleej Bank of Sudan to deploy Path Solution’s core banking iMAL platform.
A digital rupee? That’s the proposal from India’s National Institute for Smart Government (NISG).
Fintechs are not the only ones disrupting financial services in India. Increasingly, smartphone brands are getting into the act.
Indian fintech startup Mera Cashier raises $250,000 in seed funding.
Latin America and the Caribbean
Softbank strikes again! The Japanese firm has led a $125 million Series B round for Mexico’s AlphaCredit.
Americas Quarterly looks at ways that fintech can become “a priority” in Latin America.
Olivia, a Brazilian financial wellness app, raises $5 million in funding from BV (formerly Banco Votorantim).
As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.
If you ask Balázs Vinnai, president of W.UP, one size does not fit all when it comes to banking. In fact, his company’s entire premise is built around creating a personalized user experience.
Earlier this month we chatted with Vinnai about the struggle that banks face when it comes to tailoring their user experience to suit each customer individually.
Balázs Vinnai
Finovate: Why do you think banks have such a difficult time creating a personalized user experience?
Vinnai: There are several reasons: patched-up IT systems, outdated vendors, a lack of entrepreneurial spirit, just to name a few. But legacy thinking is by far the biggest culprit. Many incumbents still think that digital transformation is about buying the right technology and streamlining a few processes. That’s part of it, of course, but mostly it’s about understanding customers as much as possible and catering to their very needs.
Finovate: What is one small step banks can take to improve their customer experience?
Vinnai: Stop looking at their customer base as a faceless mass. Banking customers are individuals with unique needs and problems, goals and habits. With the help of advanced data analysis, banks can do much more than segment or micro-segment them. They can create segments-of-one and laser-target each and every customer with the right financial solutions.
Finovate: How does improving the customer experience ripple out to add value into other areas of a bank, such as fraud prevention?
Vinnai: Personalization in general is becoming a means of survival instead of added value. Completely rethinking how customer experience is delivered might seem a bit radical today but, in the long run, failing to do so will have more severe consequences. A Gartner study says that by 2030 as many as 80% of traditional financial service providers will go out of business if they can’t catch up with digital-savvy competitors.
Finovate: Tell us about what W.UP does and what sets the company apart from its fintech competitors.
Balázs Vinnai: W.UP is a personalization platform that allows banks to understand and meet their customers’ needs in real time. It comes with pre-built use cases that are easy to set up and tailor to banking systems, processes, and goals. What makes it different from other AI-driven tools is that not only does it give customers a better insight into their finances, but it can also spot and offer solutions for key money moments and complex life situations.
Finovate: Last year was considered to be “the year of the customer” in fintech. Do you think that mentality will continue into 2020?
Vinnai: I think every day should be about the customer in banking and fintech alike, no matter what year it is. And it shouldn’t just be an empty motto or mission statement. It’s time incumbents and challengers teamed up and walked the talk together.
Check out W.UP’s Best of Show-winning demo at FinovateEurope 2019 and don’t miss the company’s upcoming appearance at FinovateEurope on 11 through 13 February in Berlin.
A look at the companies demoing at FinovateFall on September 14-16, 2020. Register today and save your spot.
Chatvisor combines customer engagement and analytic platforms powered by Co-Browsing, providing improved customer communication for companies.
Features
Screen-sharing without downloading
Bi-directional control
Maximum security & privacy
Why It’s Great Co-Browsing is screen-sharing without downloading, optimized for websites, mobile apps & desktops.
Presenters
Horst Fuchs, COO Fuchs is a former competitive swimmer as well as former COO at his family company. He’s passionate about innovation & disruptive technology and loves competition, sports, learning, and pushing limits. LinkedIn
Markus Wagner, CEO & CTO Wagner is a problem solver at heart and applies his exceptional skills daily in his co-role as CEO & CTO. He leads Chatvisor’s product development to not just match, but exceed customer expectations. LinkedIn
A look at the companies demoing at FinovateFall on September 14-16, 2020. Register today and save your spot.
Neonomics arose as a direct response to the challenges facing the financial industry during its radical transition into the era of PSD2 and open banking.
Features
Reduce cost
Plug-and-play integration
Seamless customer journey
Why It’s Great Users are enabled to trigger instant payments and transfers from their bank, directly from your app or website.
Presenters
Roar Alme, COO Alme is extremely experienced with business development and finance in Norway and internationally. He is the Chief Commercial Officer at Neonomics. LinkedIn
A look at the companies demoing at FinovateFall on September 14-16, 2020. Register today and save your spot.
Passwords should not exist. Covr is the next generation of digital on-boarding & authentication solutions. Credential-less, for maximum security and user experience for your customers.
Features
User intuitive with end users in full control
Eliminating One Time Passwords, ending reliance on passwords and hardware tokens
Biometrics for digital on-boarding of new customers and three factor SCA
Why It’s Great Digital identification is a strategic asset in financial services. Covr is the next generation of digital on-boarding & authentication solutions, eliminating passwords and optimizing your UX and security.
Presenter
Johan Envall, VP Bus. Dev. Envall brings more than 15 years of experience in banking and financial services, including JPMorgan, Mastercard and as entrepreneur in Fintech start-ups. Currently, VP Bus. Dev. at Covr Security, based in Sweden. LinkedIn
Sam Leslie-Miller, Head of Ops. Leslie-Miller looks after Fidel’s delivery of products, existing & new, ensuring Fidel is adhering to it’s ambitious goals. LinkedIn
