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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The votes are in and the people have spoken! Congratulations to the winners of Best of Show at FinovateEurope in Berlin, Germany!
Dorsum for its Communication HUB that provides real-time, private, banking customer engagement through automated notifications and instant human and AI chat possibilities. Video.
Glia for its digital customer service platform that connects financial institutions to their customers using chat, voice, video, cobrowsing, and AI. Video.
Horizn for its focus on equipping frontline employees and customers directly with the knowledge to improve customer experience and increase digital adoption. Video.
iProov for its solutions – used in production globally by governments and banks – that use biometrics to authenticate users online. Video.
Sonect for its easy-to-use and accessible for everyone, everywhere global platform for cash transactions. Video.
W.UP for its banking personalization platform that turns data into better banking. Video.
Thanks to all the demoing companies that took the time and effort to demonstrate their innovations live on stage. Thanks also the City of Berlin for being such a wonderful host for our first conference of the new year and new decade. We are already looking forward to returning in 2021!
Notes on methodology:
1. Only audience members NOT associated with demoing companies were eligible to vote. Finovate employees did not vote.
2. Attendees were encouraged to note their favorites during each day. At the end of the last demo, they chose their three favorites.
3. The exact written instructions given to attendees: “Please rate (the companies) on the basis of demo quality and potential impact of the innovation demoed.”
4. The six companies appearing on the highest percentage of submitted ballots were named “Best of Show.”
5. Go here for a list of previous Best of Show winners through 2014. Best of Show winners from our 2015 through 2019 conferences are below:
For banks, digital transformation is a moving target. Perhaps that’s because it’s all-encompassing, or maybe it’s because it seems like an ambiguous buzzword with no real meaning. There is one overarching truth about digital transformation, however, and that is that it is a multi-faceted process, not a single solution.
In a conversation with Grant Spradlin, Nuxeo’s VP of Customer Success, Spradlin outlined three key challenges businesses have in achieving digital transformation.
1. Competition Making digital transformation more complex are players in the bigtech arena such as Google, Facebook, Apple, and Amazon. When it comes to customer experience, banks are not only competing against other banks or even other fintechs. Instead, they are pitted against the tech sector at large.
2. Gap in customer expectations Customers are expecting more from banks than just acting as a safeguard of funds. This is because bigtech megaliths have redefined the user experience for their customers to such an extent that it has raised customer expectations.
3. Regulations New and updated regulations are always a challenge, but are especially so with digital transformation. Fortunately, digital transformation also serves as an aid to comply with new regulations. Banks will have an easier time complying with GDPR, for example, when they update their data management practices.
As with most digital objectives, digital transformation all comes down to data. Spradlin noted that his successful customers have one thing in common– they are all using data management as a service. Nuxeo’s data management as a service offering is a single API that offers access to all of the content across an enterprise. “It’s all kind of the same use case at the end of the day,” he said. “That is, providing the right content to the right person at the right time.”
Payment processing company Cloverannounced a new capability for dine-in restaurants to offer their guests. The Fiserv-owned company launched Scan to Pay, a tool that enables diners to pay for their meal at their table without the help of their server.
Available on Clover Dining, Scan to Pay prints a QR code on the customer’s itemized bill. Once guests scan the code with their iPhone they can pay via Apple Pay without opening a separate payment app. After the transaction is complete, the server sees a notification on their Clover terminal that their customer has paid. This allows the customer to leave the restaurant without further interaction.
“As restaurants look for new ways to adapt to consumer trends and offer quality dining experiences, Scan to Pay puts the power of when to pay and leave into the hands of the restaurant guest, creating a better dining experience and reducing extra tasks for servers,” said John Beatty, co-founder of Clover. “Scan to Pay represents another step forward for Clover as we continue to build out our core technology capabilities and provide additional solutions that can help merchants grow their businesses and delight their guests.”
Restaurants using Clover Dining can access Scan to Pay without additional cost, though they are charged card not present (CNP) rates for Scan to Pay transactions.
While the potential user base is limited to iPhone users and further limited to those that have set up ApplePay, the user base for payment services such as Scan to Pay is growing. 9to5Mac recently reported that Apple Pay is used for 5% of card transactions across the globe. And by 2025, that number could reach 10%.
Clover was founded in 2010 and was acquired by First Data in 2013. First Data, in turn, was acquired by Fiserv in July of last year. Clover, which demoed at FinovateSpring 2012, offers a range of card present and CNP technologies and processes more than $100 billion in payment volume each year.
Automatic saving tools have been around since the dawn of the new millennium. You’re probably familiar with how they work; the tools allow users to contribute to savings goals on a regular basis using microtransfers. Some take a randomized approach to the contributions, transfering under $10 a few times a week from a user’s checking account to their savings account. Other tools round up the amount of everyday purchases and contribute the “spare change” to a savings account.
Though Bank of America’s autosave tool has been available since 2005, it wasn’t until the launch of investing app Acorns in 2012 that the industry picked up on the possibility of success for autosave and payment round-up tools.
Banks were quick to notice not only the positive consumer response to such tools but also the potential for more consumer deposits and increased debit card usage. While many banks offer a straightforward version of autosave, a handful offer more robust features, such as purchase round-ups, to entice users to keep a few more bucks in the bank. Below are autosave programs from six banks.
USAA’s Tracker
Tracker from USAA tries to make saving a bit more approachable with the use of a German Shepherd. The tool does not implement purchase round-ups, however. Instead Tracker randomly withdraws small amounts ranging from $2 to $9 from a user’s checking account one to four times per week. To keep the user involved, Tracker texts the user every day to inform them of their checking account balance.
Bank of America’s Keep the Change
Bank of America was well ahead of its time when it launched Keep the Change in 2005. The savings program rounds up consumers’ purchases to the nearest dollar and deposits the extra change into a separate savings account.
The tool is still available and is relatively unchanged today.
KeyBank’s EasyUp
KeyBank’s savings tool, EasyUp, is tied to a user’s debit card and works by automatically transfering $1 to a specified savings account every time a user makes a purchase. While customers can use the savings balance any way they choose, KeyBank specifically highlights using EasyUp to pay down debt faster.
Chime’s Automatic Savings
Chime, a U.S. challenger bank that was founded in 2013, uses the round-up concept to help users save money every time they make a purchase. In conjunction with this way to save, the bank also allows users to automatically transfer a percentage of each paycheck into their savings account. While this isn’t a new concept, Chime has built a user experience around the transfer capability and sends push notifications regarding savings progress to make it more accessible for users.
Qapital’s Rules
Qapital uses the concept of If This, Then That (IFTTT) to help users set up a structure around their savings transfers. The tool leverages behavioral economics to get users to save when certain actions are triggered. For example, accountholders can have Qapital set a small amount of money aside each time they visit the gym, every time it rains, or each time Donald Trump tweets.
Simple’s Round-Up Rules
Simple’s saving program, Round-up Rules, works similarly to Bank of America’s Keep the Change tool by depositing the “spare change” from each of a customer’s purchases into a separate savings account. The one difference with Simple’s savings tool, however, is that it waits until the spare change adds up to or exceeds $5 before transfering the cash into the savings account.
Digital banking and client lifecycle management solutions provider Fenergobrought in $80 million in funding today, bringing its total raised to $155 million and boosting its valuation to $800 million.
The funds come from new investor ABN AMRO Ventures and existing investor DXC Technology, which have taken a 10% stake in Fenergo. “We are very happy to add Fenergo to our investment portfolio,” said Hugo Bongers, Director at ABN AMRO Ventures. “This investment will contribute to ABN AMRO’s strategic priority to build a future proof bank and fight financial crime. We are impressed with the management team and solution Fenergo offers. In addition, this gives us additional exposure to a group of tier one investors.”
Fenergo will use the funds to bolster its products and hinted that the money will also fuel future company and product acquisitions.
Founded in 2009, Fenergo aims to help financial institutions revamp their client onboarding process by creating a seamless user experience while maintaining regulatory compliance. Demand for the company’s modern onboarding tools can be seen in the growth of its bottom line; last year, Fenergo grew its revenue by 21%.
The Dublin-based company boasts 70 clients, including two of its investors, ABN AMRO and BNP Paribas. Also on the list are ANZ, PNC, Banc of California, National Australia Bank, Canadian Imperial Bank of Commerce, UBS Asset Management, Anglo Gulf Trading Bank, Royal Bank of Canada, First Abu Dhabi Bank, Tricor, Exos Financial and Mizuho.
Why is platformification an important development in financial services? And what will happen to financial services companies when financial decisions are made less by people, than by their trusted, AI-enabled personal assistants?
Answers to these questions were among the most compelling content on Day One at FinovateEurope this week. Our morning session, featured a pair of presenters, Nicolai Schattgen, founder and CEO of Match-Maker Ventures, and author and entrepreneur Steven Van Belleghem. Both speakers’ insights on platformification and the relationship between the customer and major enabling technologies like AI, respectively, were especially well-received by our FinovateEurope audience.
Opening his conversation on the role of the platform in financial services, Schattgen explained that platforms thrive in areas of low transparency and high transaction costs. He used the example of Airbnb, asking audience members to consider how Airbnb as a platform has helped revolutionize the industry of global online property rental. Calling this ability to transform opaque and expensive markets into accessible, consumer-friendly opportunities “the platform economy rules,” Schattgen implored the audience to understand that “the world will never be as slow as today” and that financial services companies and fintechs alike could receive “massive benefits” from the platform economy.
The plan? Financial services companies must accept the shifting realities of their markets, including the preferences of customers. They must believe in what they do as innovators; as Schattgen put it, “you’ve got to be IN it.” This includes committing the appropriate amounts of both capital and mindshare from leadership. It is not something that can be effectively outsourced. Lastly, Schattgen encouraged partnerships, and praised the value of collaborations between “corporates” and “startups” to drive business value by combining leadership with innovation.
A little later in the day, a special address from Steven Van Belleghem was an entertaining and informative journey from the land of selfies, 4G, and Instagram to the precipice of a world driven by powerful enabling technologies like AI and machine learning, quantum computing, 5G, and robotics. Author of Customers The Day After Tomorrow, Belleghem discussed these technologies in the context of how they will change the relationship between customers and the products and services they buy – from the favorite and trusted brands to impulse purchases – once they are mature and widely distributed throughout the economy.
He refers to this future as B2A – business-to-assistant, as in virtual assistant, and asks the question of what companies will do to retain customers in a world in which customers rely on enabling technologies to either help them make purchasing decisions or to make those same purchasing decisions on their own.
In other words, Belleghem asks, what if the customer is no longer part of the decision flow? In much the same way that Facebook has become effective for its ability to filter information, Belleghem notes that algo-driven, B2A commerce will create product filters and digital shelves that are significantly more personalized and less diverse than brick-and-mortar shelves. The implications for brands of all kinds are significant.
Belleghem sees two possible futures as a result of this. In one future, mega platforms create centralized systems that serve as gatekeepers and distribution networks leveraging an AI-enabled understanding of consumers’ past and likely future buying preferences. In another future, customers access their preferred brands directly via a strong and user-friendly, automated interface. Belleghem he has no crystal ball to tell him which path is the one we are more likely to pursue as a society. Nevertheless, he recommends that businesses spend a significant amount of time on brand-building, and said understanding that managing a customer’s top three resources: time, money, and energy – and especially “time” – can be a gamechanger when it comes to determining which product or service is the one a customer will stick with over the long term.
Mastercardannounced today it has received approval from the People’s Bank of China (PBOC) to set up a domestic bankcard clearing institution in China. PBOC has given Mastercard, along with its partner NetsUnion Clearing Corp (NUCC), one year to begin clearing activity in China.
This move comes after a long period of restricted payment card operations in China. For the past ten years, foreign payment card companies could only tap into China’s credit card market via partnership with state-run UnionPay.
“China is a vital market for us and we have reiterated our unwavering commitment to helping drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses,” said Mastercard President and CEO Ajay Banga. “We remain focused on working with the Chinese government and local partners to grow the overall payments infrastructure.”
According to Bloomberg, which estimates the payments market in China to be $27 trillion, the country has 8.2 billion bank cards in circulation 90% of which are debit cards.
Thanks to a recent trade deal with the U.S., China has ended the monopoly of state-run payments and so far has already opened its doors to American Express and PayPal after the payments company took a 70% stake in China-based GoPay.
Customers have been getting a lot of attention in the financial services industry lately, and for good reason. After all, they’re the ones who are interacting with and relying on banking services on a monthly, weekly, and daily basis. And many times they are even the ones footing the bill!
Fortunately, there are fintechs in the business of helping financial services companies connect with their customers. Take Unblu, for example. The Switzerland-based company launched in 2008 as a conversational platform for financial services companies.
Unblu allows banks and relationship managers to interact with their customers across multiple channels and mediums in order to keep the conversation natural, comfortable, and compliant. Customers can open a chat discussion, host a video call, or schedule a co-browsing session with a view of existing websites and screens to enhance the conversation of the customer’s view.
The company offers four products. The first, Conversational Banking, provides interactivity that allows for a seamless flow of questions, answers, ideas, and scheduling. Retail Banking and Private Banking allow the organization to enhance the user experience while better capturing leads for upsell and cross-sell opportunities. Lastly, the insurance offering provides the capability to submit claims and compare different products.
Key to the Unblu platform are the safety and compliance aspects. Not only does Unblu protect clients’ data, it also protects their information during screensharing by masking sensitive information. Organizations are safeguarded as well, with archived interaction logs and audit trails of client communications.
Last year Unblu opened an office in Frankfurt, Germany. The move aimed to support geographic expansion and marks the company’s third international office location– in addition to the U.S. and U.K.– outside of its Switzerland headquarters. And Unblu’s growth continues to compound. The company counts more than 120 financial services firms as clients– almost triple the number of clients Unblu had in 2017.
If you happen to be at FinovateEurope this week, you’re in luck! Unblu will take the stage during the second demo session on Wednesday, 12 February at the Intercontinental Berlin. There’s still time to register so book now!
For all the excitement about challenger banking ex-U.S., there may be more going on in the alternative banking scene in America than many think.
Mobile banking company Varo Money, for example, announced this week that it has received approval for deposit insurance from the Federal Deposit Insurance Corporation (FDIC). This is a significant step on the company’s journey toward obtaining a national bank charter and moves Varo to the final stage of the approval process, the company said in a statement.
Varo Money CEO Colin Walsh said that the goal of earning a license to operate nationally was “part of Varo’s vision from the very beginning.” Walsh noted that the bank charter would help Varo also meet its goal of boosting financial inclusion. “Becoming a fully chartered bank will give us greater opportunity to deliver products and services that positively impact the lives of everyday people around the country,” he said.
Founded in 2015 and headquartered in San Francisco, California, Varo Money offers a mobile banking account with high-yield savings, direct deposit, and no account fees. The company had a big 2019 – forging partnerships with Galileo Processing, Socure, Cachet Financial, Bancorp Bank, and iHeartMedia in the second half of the year alone. Varo also raised a significant chunk of change in 2019 – picking up a $100 million investment from Warburg Pincus, Gopher Asset Management, and The Rise Fund that drove the company’s total capital to more than $178 million.
En route to earnings its national banking charter, Varo still needs to complete certain organizational requirements, as well as meet terms of both the OCC’s (Office of the Comptroller of the Currency) and the FDIC’s Federal Reserve membership. The company said that once it earns its charter it will expand its offerings to include products like credit cards, loans, and savings solutions.
How is the battle of the challenger banks manifesting itself in Germany? As FinovateEurope gets started in Berlin this week, we take a look at some of the top challenger banks in the country.
Bitwala– Based in Berlin, Germany, Bitwala leverages blockchain technology to offer a banking experience for holders of both fiat and cryptocurrencies. Co-founded by Benjamin Jones, Jorg von Minckwitz, and Jan Goslicki in 2015, Bitwala has raised more than $21 million in funding. Late last summer, the challenger bank launched its all-in-one mobile bitcoin app, enabling customers in 30+ countries to open a German bank account with an integrated Bitcoin wallet and trading functionality.
Consorsbank – Founded in 2014 – and sporting an origin story that goes back to 1994 – Consorsbank is owned by BNP Paribas SA Niederlassung Deutschland. The bank offers a current account and two free debit cards, as well as a securities trading account with fee-free trading in ETFs and funds. In 2018, Consorsbank introduced its new installment loan product, and last year, the company went live with both Apple Pay and Google Pay.
Fidor Bank – Headquartered in Munich, Fidor Bank was founded in 2009, and serves both retail and business banking customers. The firm was acquired by Groupe BPCE of France in 2016, one year after Fidor Bank began operations in the U.K. Fidor offers a business account and card solutions, as well as financing products including installment loans and lines of credit. The bank also facilitates customer investment in foreign currencies and online savings bonds. Fidor Bank celebrated its 10th anniversary last May, and currently has 250,000 private and 40,000 business customers.
Fyrst -Bonn-based Fyrst Bank is the latest challenger bank in Germany to offer financial services to freelancers and the self-employed. Launched in 2019, Fyrst charges no account management fees and offers integrated accounting and invoice management, instant payment transfers and inexpensive financing options. Fyrst is backed by DB Privat- and Firmenkundenbank AG, and is a division of Postbank.
Insha – Founded in 2018 and proclaiming itself to be the first interest-free mobile bank in Europe upon its launch a year later, Insha is a spin-off from Turkey’s Albaraka Turk Participation Bank. Insha is headquarted in Berlin and offers a mobile account and Insha Mastercard debit card, money transfers, and financial wellness tools inSave and inSight to help customers manage their money better. Insha also provides a zakat calculator to help Islamic customers accurately determine the amount of their annual zakat obligation.
Kontist – A bank that specializes in serving freelancers and workers in the gig economy, Kontist is based in Berlin and was founded in 2015. The challenger bank calls itself the only bank that calculates and sets aside taxes in real-time – responding to a major pain point for workers with irregular or untraditional sources of income. Kontist offers its customers a mobile app and business account, and supports its customers accounting by keeping banking and bookkeeping in “permanent sync.” Kontist also provides a Mastercard Business debit card. The company is a strategic partner of solarisBank.
N26 – Berlin-based N26 provides mobile and online banking services to customers throughout the E.U. Earning its banking license in 2016 and rebranding from Number 26 to N26Bank, the company has raised $683 million in funding, including a $470 million Series D completed last summer. This funding was accompanied by the bank’s expansion to the U.S. With a valuation of more than $2.7 billion, N26 is regarded as one of the most valuable challenger banks in Europe.
Penta – Founded in 2016, Penta provides banking services – including expense management, accounting, and corporate cards – for SMEs and startup companies. Penta customers can establish sub-accounts to more readily monitor various business cash flows, and take advantage of a variety of small business financing options. Headquartered in Berlin, and acquired by finleap in spring of 2019, Penta introduced its all-in-one founder’s package, Kompass, in January. Kompass includes a set of legal documents and guidelines to help ensure successful company launch.
solarisBank – A self-described technology company with a banking license, solarisBank was founded in 2016, and has both its own banking license as well as a banking platform to help other firms to offer their own financial solutions. The Berlin-based firm offers a suite of RESTful APIs to enable its partners to integrate its modular financial services solutions within their own product line. solarisBank announced a partnership with Penta last fall to support the business banking platform’s expansion into Italy. In December, the bank launched its subsidiary, Digital Assets, to provide a custody solution that takes advantage of the growing ownership of cryptocurrencies and other digital assets.
Tomorrow – Tomorrow offers a current account that gives customers the opportunity to make a positive difference on the environment. The bank finances renewable energy and organic agriculture, as well as other climate-supporting initiatives. The challenger bank’s account features a digital budget with automatic categorization, and real-time, push notifications for every transaction. Tomorrow was founded by Inas Nureldin, Michael Schweikart and Jacob Berndt and is based out of Hamburg. Tomorrow closed its first round of funding in 2019, pulling in €8.5 million from impact investors.
Top U.K.-based challenger bank Starling Bank raised $77.5 million (£60 million) from existing investors Merian Global Investors and JTC.
Today’s investment brings Starling’s total funding to $417 million (£323 million).
“The support of our existing investors represents a huge endorsement of our business strategy, as we continue to ramp up our growth,” said Anne Boden, Starling Bank founder and CEO. “We’re constantly innovating and have big ambitions to turn Starling into a world-leading digital bank.”
Starling will use the funding to support “rapid expansion” efforts and to create products and services that compete with traditional financial institutions. Helping motivate its employees to push for this expansion, the bank is awarding shares to its staff.
“We could not do this without the support of our 800 employees, who work so hard to provide a better banking experience for our customers, giving them more control over their finances. So I’m thrilled to be giving shares to them,” said Boden.
Since launching its banking app in 2017, Starling has amassed 1.25 million accounts and holds $1.61 billion (£1.25 billion) in assets under management. The bank was founded in 2014 and is headquartered in London with offices in Southampton, Cardiff, and Dublin.
Blockchain-powered payments platform Paystand has raised $20 million in Series B funding. The investment, which the company will use to grow its products and services, as well as sales, marketing, and engineering teams, featured the participation of both new and existing investors.
“We made a promise to reboot commercial finance because it’s insecure, inefficient, and built on trustless networks and technology,” Paystand CEO Jeremy Almond said. “Today markets another step towards realizing that vision and transforming enterprise finance.”
Paystand seeks to do for complicated commercial payments what Venmo has done for P2P transactions. By digitizing and automating a company’s cash cycle, Paystand’s payments-as-a-service platform helps businesses become more capital efficient, streamlines back office operations, and allows them to offer innovative payment experiences.
Paystand participated in our developer’s conference, FinDEVr Silicon Valley, in 2014. With offices in both Scotts Valley, California, and Guadalajara, Mexico, the company has added 80 new large enterprise customers in the last 24 months.
Last week we shared news of FinovateEurope alum Opentech and its partnership with Mastercard.
Now we can add that Swiss Bankers Prepaid Services has teamed up with Opentech to launch its latest money sending service, Send. The new offering is based on Opentech’s OpenPay Send solution which, as we learned last week, leverages the Mastercard Send platform to give users a convenient, “use-case agnostic” way to transfer money to locations around the world.
Swiss Bankers’ Send can be readily activated after a quick KYC process that only takes a few minutes via the mobile app. The solution is is available to all Swiss citizens who are Swiss Bankers cardholders.
Highlighting the rise of P2P payments as a preference for both domestic and international payments, Swiss Bankers CEO Hans-Jorg Widiger praised the partnership with Opentech. “Seizing this opportunity is a crucial step for us to remark and consolidate our positioning as a customer-driven, trustable and innovative company,” he said. “With Send we faced this challenge, relying on our long-dated partnership with Mastercard and Opentech to provide our customers with a distinctive solution in line with our quality standards.”
Fiserv Partners with Hong Kong Digital Bank Pioneer ZA Bank – ZA Bank, will use the company’s VisionPLUS global payment software, which supports the entire card payment lifecycle from origination and issuance to settlement and customer service.
Worldline to Acquire Ingenico in $8.6 Billion Deal – 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.
Also on Finovate.com
Everything Fintech at Davos 2020 – 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.
Finovate Launches New Gender Diversity Stream at FinovateEurope – FinovateEurope is innovative for us in a number of ways. This year we will debut our Women in Fintech stream.
Fintech and the Case for Senior-Based Solutions – Ensuring that the online and mobile worlds are a safer place for seniors is one of the important contributions that technology can make.
Can Amazon Help Goldman Sachs Get its Groove Back? – According to reporting in both the Financial Times and on CNBC, Amazon and Goldman Sachs are discussing a partnership that would enable the investment bank to offer loans directly to merchants via Amazon’s platform.
