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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
We close out 2019 with a deep dive into fraud prevention, cybersecurity, and regtech, as well as unique insights from FinovateAsia and Middle East. This quarter’s eMagazine includes insights into the micro-trends set to emerge in 2020, and interviews with some of the Finovate Awards winners about their innovations.
Cloud banking platform provider Mambu and lending-as-a-service platform TradeLedger joined together recently to create an offering for online commercial lenders.
This client group, which the companies cite as an underserved $1.6 trillion (£1.2 trillion) opportunity, will offer commercial lenders a cloud-based solution to design, configure, and implement new lending products.
“Mambu’s composable banking approach blends perfectly with our vision for a brand-new mid-market transactional banking and trade infrastructure,” said Roger Vincent, Chief Innovation Officer at Trade Ledger. “Through an API-driven architecture, the Trade Ledger and Mambu platforms come together with Mambu Process Orchestrator allowing our customers to significantly reduce the cost of loan origination and servicing, improve customer experiences (internal and external), and rapidly increase the volume of their loan book – all without significant investment in more staff or resources.”
Mambu launched its composable banking concept to help financial services companies “compose the bank they want to be.” This approach enables banks to choose the best third party vendor for each process by facilitating as many integrations as the bank wants. And because technology is continuously evolving, Mambu allows banks to swap out integrations independently when they want to switch providers.
Mambu has raised almost $47 million in funding (€42 million) from investors including Bessemer Venture Partners, Acton Capital Partners, and CommerzVentures. The Berlin-based companymade its Finovate debut at FinovateAsia 2013 in Singapore. Last month, Mambu signed UK-based SME challenger bank Recognise.
SumUppartners with donation software company to help charities to go contactless for Christmas.
TransferWisepartners with Visa to enable real-time transfers to debit cards.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Growth, growth, and more growth is the goal of FintechOS as the company announces receiving a new investment of $14 million (€12.7 million). The open source, digital banking solution provider, which made its Finovate debut last year at FinovateEurope, will use the funding to fuel its expansion to both the U.S. and South East Asia, as well as continue its growth in Europe. The capital will also help the company invest further in the development of more pre-built apps and solutions to enable FIs to offer better experiences for their customers.
“Our disruptive approach is customer, not technology driven,” company co-founder and CEO Teodor Blidarus said. “We created FintechOS to transform the financial industry, empowering banks and insurance companies to act and react faster and to create a smarter, slicker customer experience. As a result, hyper-personalized services and elevated customer experiences are now available almost plug and play.”
The Series A round was led by Earlybird’s Digital East Fund and OTB Ventures. Also participating were existing investors Gapminder Ventures and Launchub. The new funding takes FintechOS’s total capital to $16 million.
FintechOS enables banks and insurance companies to offer personalized, data-driven digital solutions to their customers in weeks rather than months or years. Via cloud SaaS or on-premise deployment, FintechOS offers 150+ integrated data sources out of the box and more than 20 automated financial processes to support AI-enabled functions like KYC, Customer 360, pricing, and risk analytics. Firms can also use FintechOS to access a marketplace of 50+ open source, prebuilt apps for key processes ranging from client onboarding and lending to pensions and wealth management.
“FintechOS’s technology is transformational in its ability to provide true end-to-end digital automation for all services and products that banks and insurance companies offer,” OTB Ventures General Partner Adam Niewinski said. “This new technology is inexpensive and versatile, ultimately enabling massive cost savings and growth stimulators for financial institutions.”
With clients in more than 20 countries and three continents, FinechOS was founded in 2017 and has offices in London, Amsterdam, Vienna, Copenhagen, and Bucharest. The company reported annual recurring revenue growth of 4.5x this year.
Swiss IT and digitization specialist Inventx is the latest company to leverage technology from ndgit to enable it to maximize the opportunities of open banking. The company will use an open API integration layer from ndgit to power its new Open Finance Platform, ix.OpenFinancePlatform, which makes it easier for banks and insurance companies to connect with fintechs and other third party providers.
“The partnership with Inventx gives us clear strategic advantages, allowing us to expand our range of fintech solutions for Swiss clients and further boost local market growth,” ndgit Business Manager for Switzerland Roger Wisler said. “Inventx’s innovative Open Finance Platform is the next logical step for the evolution, adoption, and promotion of Open Banking in Switzerland. Together, our optimized interfaces will help to facilitate smooth and seamless integration of fintechs and financial service providers.”
Inventx’s ix.OpenFinancePlatform will use ndgit’s technology and open APIs to facilitate the connections between FIs, fintechs, and software partners. Inventx Head of Consulting and Software Solutions Pascal Wild said the two companies complemented each other insofar as ndgit’s APIs provide the standardized APIs for front-end applications while Inventx offers backend system connectivity. The combination makes it easier for FIs to take advantage of open banking for themselves and their customers “without having to worry about the technical challenges of system communication and orchestration,” Wild explained.
Founded in 2016 and headquartered in Munich, Germany, ndgit demonstrated its PSD2-enabled Digital Loan Application at FinovateEurope earlier this year. The company, which implemented Switzerland’s first Open Banking Platform in 2017, notes that its technology has been deployed by 20+ banks over the past year. Ndgit’s API platform won the CEE Fintech Challenge in 2018, the biggest fintech conference in the Central and Eastern European region.
In October, ngdit forged a partnership with Swiss fintech incubator and accelerator F10. The following month, the company collaborated with Synpulse to launch Switzerland’s first fintech app marketplace. Ndgit was awarded the Finance IT Innovation Award in June, along with partners Finstar, Sonect, and neo.
‘Tis the season for every fintech news outlet to cite industry predictions for 2020. And while it’s helpful to know that AI is still the biggest trend since PFM, and that the bank of the future will get ahead by focusing on the customer, sometimes the best way to gauge new trends is to think on a smaller scale.
Examining these micro trends helps keep a finger on the pulse of what’s about to take off in fintech and cuts the noise of the glaringly obvious ideas that dominate headlines. Here’s a look at a few of those trends.
Workplace training and compliance
These types of solutions have two main drivers, new technology and new regulation. Both of these factors continue to move at a fast pace throughout financial services.
Solutions such as Horizn help employers train their employees to use new consumer-facing technology so that they are ready to answer questions from end clients. By using gamification and leaderboards, Horizn encourages employees to increase their knowledge about new tools and offerings. Similarly, Launchfire’s Lemonade is an interactive, game-based simulation approach to workplace learning and helps employees not only learn skills they need to share with their customers but also familiarize themselves with compliance regulations.
This second piece of Launchfire’s offering– the compliance training– is key because it is increasingly evolving. This is due in part to employees expecting a more interactive training experience and partially because new technology is driving regulation to change at an increasingly fast pace. Christina Luttrell, COO of IDology highlighted this in a discussion about Europe’s General Data Protection Regulation (GDPR), which took effect in 2018; and the California Consumer Privacy Act (CCPA), which will begin enforcement on the first of next year.
“According to IDology’s Annual Fraud Report, 28% believe CCPA compliance will be more burdensome than GDPR,” Luttrell said. “If GDPR is an indicator of how CCPA will unfold, then businesses need to consider how criminals can and will exploit subject access requests.” With regard to CCPA specifically, there is a lot at stake for non-compliance. “With consumers being able to sue, the compliance risk is enormous,” Luttrell added.
Debt management
Debt management, specifically student loan assistance platforms, have already started to take off. Players such as Tuition.io, Student Loan Genius, and CommonBond offer workplace benefits that enable employers to contribute to their employees’ student loan debt repayment efforts.
Direct-to-consumer debt repayment apps such as Qoins, which allows users to contribute their spare change from everyday purchases toward their debt, and Changed, which uses the same “spare change” concept but is focused on student loan repayment, are less common.
The coming year will bring even more of these types of solutions, especially as third party applications become more commonplace in financial services.
While there won’t be a huge wave of new players in the debt management space (again, we’re thinking micro trends!), it’s likely that existing players will launch new solutions to help consumers manage not only their student loan debt, but also mortgages and personal loans.
Philanthropic tech
We first saw an emergence of philanthropic fintech around 2012 when Billhighwaylaunched fundraising technology and CafeGive, which has since shuttered, powered multiple financial institutions’ community-focused giving promotions.
Newer examples of philanthropic technology include Betterment’s donation feature and Meniga’scollaboration with the UN that allows users to donate their cash-back rewards to fight climate change. Additionally, Radius (recently acquired by Kabbage) launched its Data for Good campaign to help the company’s employees and customers give back to their communities, and Revolutlaunched a charitable giving feature. And there are even fintechs devoted entirely to charitable giving, including Place2Give, Sustainably, and Pinkaloo.
Could charitable donations via “feel good fintech” begin to take the place of tax deductible donations – especially in the U.S. – in 2020? Philanthropic fintech is also partially driven by the convenience economy. For example, instead of sitting down to make a yearly donation to their favorite charity, consumers can support the organization on a regular basis through the deduction of their “spare change” on everyday purchases or investments.
Payoneer to acquire Munich, Germany-based open payment orchestration platform (POP), optile.
Open banking solution provider Tokenannounces digital money spin-off, M10 Networks.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Neither a bird, nor a plane … the latest offering from Russian digital bank Tinkoff is its new “super app” – launched his week – which offers functionality to support and enhance the users’ personal financial, leisure, and lifestyle needs.
“The Tinkoff app has evolved into more than a traditional mobile bank, and the latest changes are the culmination of this transformation,” said Tinkoff SVP Arten Yakanov. “The super-app is both our own version of the App Store, with its own mini-app, and the first WeChat-like app in the Russian or any other European financial market, featuring products and services from our partners.”
The app is currently in beta, and will be available “shortly” in version 5.0 for iOS, with an Android version to follow. The technology currently features Tinkoff digital banking and lifestyle services (movies, concerts, restaurants, travel, commerce, sporting events, etc.), and integration with the complete Tinkoff ecosystem of investment, business banking, and insurance services. Users of the app will also benefit from end-to-end integration with Oleg, Tinkoff’s voice assistant.
In a statement, Tinkoff signaled a number of features to be added to the super app, including more retail experiences, food and flower delivery, car sharing, as well as fitness and wellness services. The bank said it has agreements with a number of industry partners to offer customers discounts and cashback via the app.
“Unlike other Russian ecosystems, we decided to blaze a trail of our own,” Yamanov added. “Instead of scooping up businesses, we opted for a win-win solution, attracting the market’s best partners who share Tinkoff’s qualities and values.” Yamanov said one goal would be to expand these partnerships, working with businesses “from Instagram bloggers to Russia’s largest B2C companies.”
Named one of the world’s leading digital banks, Tinkoff demonstratedStories for Mobile Banking at FinovateEurope 2018. Headquartered in Moscow, Russia, and founded in 2008, the digital bank has more than seven million customers and has been listed on the London Stock Exchange since 2013.
Small and medium-sized businesses in Malaysia are the focus of a new partnership between enterprise content capture and data discovery solution provider Ephesoft and Alliance Bank Malaysia Berhad. The pact, announced today, heralds the integration of Ephesoft’s intelligent capture automation technology, Transact, into Alliance Bank’s middle office operations.
Alliance Bank Group CEO Joel Kornreich praised the way Ephesoft’s technology helps it manage the high volume of high-value documents it deals with every day. “Ephesoft is able to meet our requirements and is versatile to scale with us as we continue to transform our business processes to deliver faster, simpler, and more responsive customer experience to our clients,” he said.
Kornreich added that the technology will also enable Alliance Bank to better defend itself and its customers against fraudulent activity. “We also use the information (from customer transactions) to perform financial casting to understand our customers better, and due diligence in assessing customers,” he explained.
Ephesoft Transact enables businesses to accurately and quickly convert unstructured data in documents into actionable information. The technology leverages human-supervised machine learning to examine documents ranging from mortgage applications to insurance claims and to extract required data from them.
Transact improves in efficiency over time, becoming more “intelligent” with every correction, new layout, or new document type. The solution is available as both an on-premise option, running on Windows, Ubuntu, CentOS, and Red Hat servers, as well as via the cloud courtesy of Ephesoft’s Cloud HyperExtender add-in.
“Ephesoft’s machine learning-powered software enables Alliance Bank employees to accelerate tedious processes and use their time to bring value to the organization in strategic ways that provide a competitive advantage,” company founder and CEO Ike Kavas said.
The company’s partnership news comes one month after it announced a collaboration with Thailand-based insurance company, Tokio Marine Asia. The month before, Ephesoft unveiled a pact with automation-driven, IT, BPO, and consulting service provider Hexaware. The company will combine Ephesoft’s intelligent data capture technology with Hexaware’s own robotic process automation-based solutions to enhance a wide variety of business processes.
“Many organizations suffer from having a tremendous amount of untouched, unstructured data that they either don’t use or must manually process,” Kavas said when the Hexaware partnership was announced. “We solve those challenges so that companies can be nimble, efficient, and accurate using modern tactics.”
Founded in 2010 and headquartered in Irvine, California, Ephesoft demonstrated its Capture-as-a-Service platform for smart document capture at FinovateSpring 2018. With customers in more than 50 countries, and partnerships with 250+ fintechs, integrators, solution partners, and resellers, the company has raised $15 million in funding from investors including Mercato Partners.
Capture-as-a-Service Specialist EphesoftPartners with Malaysia’s Alliance Bank
TinkoffLaunches Super App, Integrating Finance, Leisure, and Lifestyle
Around the web
Trulioobrings its identity verification service to Nigeria and Ghana.
ID.meintroduces new solution to help businesses to comply with California’s Consumer Privacy Act (CCPA).
Greece’s Pancreta Bank partners with Finastra to enhance regulatory compliance.
ThetaRaytaps Edward Sander as its new Chief Product Officer.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Last week, the international fintech buzz was all about the booming investment in African startups. As you can see in our sub-Saharan Africa section below, that buzz continues as analysts wonder how African fintechs can best leverage their good financial fortunes of late.
But this week, it’s all about Latin America as fintechs from Mexico to Argentina lock in triple digit investments. What’s especially interesting is that two of the week’s biggest beneficiaries – Konfio and Uala – have the same participating benefactor in SoftBank.
The investment in Argentina’s Uala was the first time the Japanese-based firm had funded a company from Argentina, but not SoftBank’s first funding in the region. The firm invested $1 billion in Colombian delivery app Rappi in April of this year. SoftBank has a deeper history investing in Mexican startups, having funded payments startup Clip and used car buying platform Kavak. SoftBank is also especially active in Brazil; the firm led a $140 million round for the country’s e-commerce solution provider VTEX in November.
FinovateEurope Goes to Berlin!
It’s not too early to start thinking and planning for 2020 – especially with our first conference right around the corner in February.
After six years of basing our annual European fintech conference in London, Finovate is crossing the channel and setting up our stage in Berlin, Germany next year. Our new FinovateEurope location will also feature a new event format designed to ensure attendees maximize their time at the conference. Take a look at our developing agenda to see what we have in store February 11th through the 13th.
Here’s our weekly look at fintech around the world.
Asia-Pacific
Singapore’s FinAccel, maker of Kredivo, raises $90 million in round led by Asia Growth Fund and Square Peg.
Maybank Group, the fourth largest bank by assets in Southeast Asia, goes livewith Avaloq’s banking suite.
South Korea announces plans to launch opening banking system before year’s end.
Vymobrings AI-powered sales coaching to insurance giant Sompo.
Sub-Saharan Africa
Can Africa’s fintech startups learn from the experience of M-Pesa? TechCrunch considers the opportunities now available thanks to recent positive funding trends.
A partnership between Smartstream and Union Systems will help African FIs digitize their post-trade environments.
QuartzAfrica takes a look at the “niche ecosystems” that are developing amid Africa’s rapidly expanding fintech industry.
Central and Eastern Europe
Berlin, Germany-based SME digital banking platform Penta teams up with SumUp.
First Investment Bank (Fibank) goes live with the first, PSD2-compliant, open banking platform in Bulgaria.
Tinkoff GDRs will be included in MOEX Russia indices next month.
Middle East and Northern Africa
Sudan’s Nile Bank is the latest FI to choose Oracle’s Flexcube core banking solution.
Temenosteams up with Egyptian National Post Organization.
Dubai Financial Services Authority inks fintech pact with Luxembourg’s Commission de Surveillance du Secteur Financier.
Central and Southern Asia
DriveWealthhelps Indian investors access U.S. stocks via new partnership.
Indian banking technology provider TCS Financial Solutions migrates three credit unions to a cloud-version of its TCS Bancs system.
Paysendintroduces worldwide money transfers to Uzbekistan.
Sri Lanka’s central bank examines the possibility of applying blockchain technology to streamline KYC processes for FIs.
Latin America and the Caribbean
Uala, a money management app from Argentina, raises $150 million in Series C round led by Tencent and SoftBank.
Mexican SME credit assessment specialist Konfio closes $100 million investment from SoftBank.
MercadoLibre picks up $125 million loan from Goldman Sachs.
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.
The newly-released Fintech Power 50 for 2020 features ten Finovate alums. The roster is produced every December and bills itself as “meant to be controversial and provoke debate” while at the same time providing “inspiration to the rest of the industry.”
“Throughout its first year the Fintech Power 50 has seen consistent success for our members and we are very proud of the opportunities that being a member of the Power 50 has offered the companies involved,” Fintech Power 50 Managing Director and co-founder Jason Williams said. “We look forward to continuing the traction we have made this year with the 2020 cohort, with a more ambitious and exciting programme.”
The Fintech Power 50 aims to help fintechs reach a broader audience around the world. Over the course of 2020, the program will offer media partnerships and networking, business development and branding support, and investment and talent acquisition. This year marks the third edition of the program; coincidentally, the 2019 Power 50 featured ten Finovate alums, as well.
“We’re incredibly excited at this announcement, which is clear recognition of Keepabl’s value to customers, and to trusted advisers alike, and our potential to keep disrupting compliance-as-a-service,” wrote Keepabl CEO Robert Baugh in an email.
CREALOGIX CEO David Joyce added that he was “looking forward to exchanging ideas with the renowned digital leaders in this unique group.” He praised the way the roster reflected “the breadth, diversity, and creativity of the global fintech scene.”
The Fintech Power 50 2020 also features ten fintech thought leaders whose names will be familiar to Finovate veterans. Nine of the ten – David Birch, Ghela Boskovich, Theo Lau, Brett King, Jim Marous, Devie Mohan, David Parker, and Ruth Wandhofer – have made major contributions to our Finovate conferences since we expanded our format in 2017. We’ll have to get Mr. Lawrence Wintermeyer, co-founder of Global Digital Finance and the tenth thought leader on this year’s Fintech Power 50, to a Finovate stage sooner than later!
