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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
PNC now usingRipple’s XRP for cross-border payments.
Mortgage Media interviews Steve Butler, founder and GM of AI Foundry.
Flywirepartners with Vietnam Prosperity Bank to simplify international tuition payments for Vietnamese students.
InSpirAVE is being issued its first patent for the technology underlying its savings social network system. The patent is part of the company’s portfolio of patents published internationally.
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.
Less than a month after securing a $37 million debt financing from BMO’s Technology and Innovation Banking Group, mobile application development platform Kony is back in the fintech headlines with even bigger news: the company has agreed to be acquired by digital banking technology giant and fellow Finovate alum Temenos for $559 million and an earn-out of $21 million.
The acquisition will bolster Temenos’ ability to compete in the digital front office solutions market, specifically strengthening the company’s Infinity offering – which currently has more than 500 banking customers and is widely recognized as a leading technology by industry analysts from Forrester and Gartner. Kony Chairman and CEO Thomas Hogan will serve as President of Temenos North America, post-acquisition, and will join the company’s Executive Committee.
“The power of the Temenos portfolio, combined with Kony’s digital banking applications and multi-experience development platform, will bring the industry’s most robust suite of applications for delivering service, value, and efficiencies from the digital edge to the modern core,” Hogan said. “The strength, scale, and commitment of Temenos will also help protect and extend our market-leading innovation.”
The acquisition is expected to be completed by Q4 2019, and is subject to standard regulatory approvals.
Calling Kony the #1 SaaS digital banking company in the U.S., Temenos CEO Max Chuard highlighted the synergies between Kony and his company. “We are acquiring a digital front office product that has already been successful in the U.S. market and is connected to most third party cores,” Chuard said. “We are also adding a significant amount of exciting functionality and ease of generating customer journeys and experiences that will accelerate Temenos Infinity, providing banks in both North America and internationally with an unrivaled customer experience and omnichannel banking product.”
A long-time Finovate alum, Kony first demonstrated its technology at FinovateFall 2010, and returned to the Finovate stage two years ago for FinovateFall 2017 to present its retail banking solution. Founded in 2007 and based in Austin, Texas, Kony launched its Conversational AI DevKit earlier this month to enable businesses to deploy new technologies to improve customer engagement. In May, Kony announced that its Quantum digital experience development platform would power the new CareLogic mobile app from Qualifacts, and unveiled a new partnership with multiple Finovate Best of Show winner and fellow alum, MX.
Headquartered in Geneva, Switzerland, Temenos demonstrated its Connect Mobile Banking solution at FinovateEurope 2015. The company is also an alum of our developers conference, having presented its B2B Financial Marketplace at FinDEVr Silicon Valley – also in 2015. More than 3,000 banks in 150+ countries – including 41 of the top 50 banks – rely on Temenos’ banking technology to process the daily transactions and interactions of more than 500 million banking customers.
Kony is the second major acquisition by Temenos this year. In July, the company announced its purchase of explainable AI innovator Logical Glue and plans to integrate the company’s machine-learning-as-a-service technology into its cloud-native banking solution. Aside from acquisitions, Temenos has been on an energetic partner-making pace, working with IIG Bank, who agreed to use the company’s Infinity digital front office platform earlier this month; as well as teaming up with FIs like Israeli bank Mizrahi-Tefahot, New Zealand’s TSB Bank, and Pakistan’s Bank of Khyber.
The promotion of Chief Operating Officer Todd Clyde to the top job at Token marks the open banking technology provider’s transition “from start-up to scale-up,” the company noted in a statement today.
“Token has grown from an idea formed in the basement of Stanford into a commercially viable, leading fintech poised to change financial services forever,” founder and now-former CEO Steve Kirsch said. Kirsch, who introduced the company to fintech audiences at FinovateSpring in 2015, will assume the role of Chief Innovation Officer and focus on developing Token’s product roadmap. Featured prominently on that map is the company’s digital money business, including its digital currency for banks, Token X.
“Open banking is a huge opportunity for banks and fintechs across the world and Token has delivered a product with solid market fit,” Kirsch said.
New Token CEO Todd Clyde
With more than 30 years of experience in the enterprise and financial software business – including 12 years at Accenture – Clyde was responsible for all of Token’s commercial and financial operations during his three-year tenure as the company’s COO. In his new role as CEO, Clyde will drive the company’s open banking business worldwide, and build on a year that has seen Token forge partnerships with institutions like TurkishBank UK, Estonia’s Tallinn Business Bank, Sberbank Croatia, Omnio Group, Khaleeji Commercial Bank of Bahrain, and U.K. challenger bank Tandem.
“Open banking is already enabling the next generation of digital financial services,” Clyde said. “It’s one of the biggest disruptions to hit the payments and banking industries in decades.” He praised Token for “providing the infrastructure to power these services, at this crucial time.”
With more than 4,000 connected banks, Token offers financial institutions a single API and Smart Token technology that provides an easy route to PSD2 compliance, as well as a way to make multi-banking available to their customers. Merchants can leverage Token’s technology to connect directly to customer bank accounts, enabling direct payments and lowering costs.
Clyde is the second big C-level change for Token in 2019. The company began the year by hiring 15-year technology and payments veteran Gaurav Kohli as its new Chief Technology Officer. Kohli was previously VP of Product Development, Architecture, and Platform Engineering at Visa where he oversaw merchant and acquirer processing.
This summer, Token was honored at the second annual PayTech Awards, taking home the top prize for Best Consumer Payments Initiative. In March, the company announced a collaboration with Konsentus to launch a fast PSD2 compliance solution that combines a PSD2 API with automated third party provider verification.
Token has raised $32 million in funding – including more than $16 million raised in June in a round led by Opera Tech Ventures. Founded in 2015 and based in San Francisco, California, the company made its most recent Finovate appearance at FinovateEurope 2017.
If you try to access Hip Pocket’s website today, you’ll be redirected to this site: htmobileapps.com/products/hippocket/. That’s because mortgage rate comparison site Hip Pocket has officially been acquired by HT Mobile Apps (HTMA).
Terms of the deal were undisclosed.
Hip Pocket is a six-year-old fintech that aims to help consumers compare mortgage, auto loans, and retirement products on their bank’s website. The solution also gives banks a personalized way to engage their clients.
Founded by Mark Zmarzly in 2013, the company has raised over $250,000 across three rounds of funding. At FinovateSpring 2015, Hip Pocket demoed its mortgage comparison site. Two years later, the company graduated from Point of Light accelerator and that same year the company spun out Hip Money, a savings app that specifically targets millennials.
Kathleen Craig, Founder and CEO of HTMA said, “Hip Pocket is a great complement to our range of products. Each of our products empower customers to grow their knowledge of personal finances while also helping financial institutions provide better digital offerings and develop more meaningful relationships with their customers. We are excited to acquire this innovative technology.”
“Kathleen and I have known each other for years and always looked for ways to help each other’s companies,” said Zmarzly. “As we talked more, it became obvious that we could raise the level of impact for banks and customers by working together.”
The acquiring party, HTMA, is a Michigan-based fintech that offers a suite of solutions for banks and credit unions. The company also offers Plinqit, a savings management app; as well as Banker Jr. and Member Jr., apps that teach financial literacy to young clients.
This deal comes at a time when merger and acquisition activity is booming within fintech. So far this year, Finovate alums have inked 32 M&A deals, including the mega-merger announced today between Kony and Temenos. We laid out why all of this M&A is good for fintech in a blog post published this June.
Cloud cybersecurity specialist DefenseStormannounced the launch of its latest anti-fraud solution, DefenseStorm FI CyberFraud, this week. FI CyberFraud is designed to spot fraud risks in banking apps as well as identify potentially fraudulent activity in computer systems. The solution leverages designated specialists who work in collaboration with the institution to manage alerts, help in fraud investigations, and serve as an extension of the institution’s own internal operations, fraud, and IT teams.
“Until now, no solution has provided specific monitoring capabilities related to data and application protection, coupled with the ability to correlate events across data, applications, and server/network/workstation events,” DefenseStorm CEO Harold Brewer said. “DefenseStorm FI CyberFraud has the potential to reduce fraud-related costs, improve the financial institution’s risk management posture, and drive cost efficiency related to the required monitoring of cyber activities.”
More specifically, FI CyberFraud analyzes and correlates data from all electronic delivery systems to spot potentially fraudulent behavior and monitors and audits access and configuration changes to both core and ancillary systems such as data warehouses. The technology also tracks transaction activity and databases for atypical usage patterns. DefenseStorm will demonstrate its new solution at the upcoming CUNA Operations and Member Experience Council and Technology Council Conference in Chicago next month.
The new product announcement from DefenseStorm comes just one month after the company picked up a major investment of $15 million in a round led by Georgian Partners. The funding took the company’s total capital to more than $29 million. Also in July, DefenseStorm teamed up with digital banking provider Apiture to offer cloud-based cybersecurity and cybercompliance solutions to its 500+ community bank and credit union partners. This spring, DefenseStorm announced a collaboration with Heritage Trust Federal Credit Union (HTFCU) to help the 50,000-member institution more proactively manage cybercrime risk.
Named a Top 40 Innovative Technology Company by the Technology Association of Georgia at the beginning of the year, DefenseStorm was founded in 2014 in Seattle as Praesidio. The company changed its name to DefenseStorm two years later, and expanded its operations from Seattle, Washington, where it still maintains an office, to Alpharetta, Georgia, where the company is currently headquartered.
DefenseStorm demonstratedPatternScout, its anomaly detection engine, at FinovateSpring 2017. PatternScout uses machine learning to identify potentially fraudulent activity in networks, and provides automated alerts to enable IT professionals and operations teams to stop cyberattacks before they spread.
FinovateFall is happening in less than a month, and we’re taking a look at the fintech trends that will grace the stage over the course of the three-day show.
This year’s word cloud of themes hints at the major points the demoing companies will showcase on September 23 and 24, and leads us to the topics of discussion we’ll see on stage during the panels and keynote discussions on September 25. Register in advance to secure your seat at the show.
I’ve broken down this year’s trends into three groups; the big, the small, and the surprising:
The big trends
Artificial Intelligence (AI) This is a trend that needs no introduction or explanation. We’ve seen AI come out on top as the largest trend in every Finovate conference this year, and next month’s show will be no different.
Data Data is a necessary component behind two of this year’s hottest trends– AI and machine learning. And since banks have an overload of data that gets larger by the minute, the way that they manage data is just as important as how they use it.
Compliance Buried within the regtech subsector of fintech, compliance is one of those topics that no one wants to think about but everyone needs to have a plan for. And these days, compliance is no longer just for banks. With bank-fintech partnerships on the rise, fintechs are increasingly expected to play by the rules, too.
Small but mighty trends
Chatbots Chatbots may not dominate the conversation at FinovateFall this year but that doesn’t mean people won’t be talking about them. Customer experience is top on the minds of both banks and fintechs alike, and having a chatbot can ease a lot of headaches associated with taking care of customers, including lowering costs, offering the ability to scale, and providing a mobile-first solution.
Customer service In many ways, 2019 is the era of the customer in fintech. We’ve seen both banks and startups throughout the industry refocus their solutions not only to attain new customers, but also to retain existing ones. As these efforts come to a head, investment in customer service solutions is at an all-time high.
Investing Investment technologies experienced their hey-day in 2015, when the use of AI was in its infancy and new robo-advisors were launching every week. Now, after much consolidation, investing technology is making a comeback with more sophisticated AI advancements.
Surprising trends
IoT devices Fintech may be all about technology, but the application of IoT devices has been slow to take off. Applications for Google Glass failed to prove valuable and the growth of Fitbit Pay remained stagnant. Today, not many new players in fintech have come forward.
Mobile wallets Technology that was the hype of 2011, mobile wallets, are everywhere and no where. A lot of players offer them, including PayPal, Square, and most alt-banking services providers. However, mobile wallets have faded into the background of fintech hype as they have transitioned into a necessity for many players.
Insurtech Unlike the previous two trends, insurtech is surprising not because it appears in the word cloud of trends we’ll see at FinovateFall, but because it appears to be such a small fraction compared to the size of other trends. The U.S. has never had a large number of insurtech players, especially compared to the U.K., but insurance is widely used across the country. Perhaps 2020 will mark the year of insurtechs in the U.S.
From Start-up to Scale-up: TokenIntroduces New CEO Todd Clyde
TemenosBuysKony to Boost its Front Office Technology for Banks
Around the web
PayActivpartners with Fiserv to streamline access to earned wages.
ABN Amro teams up with open banking solution provider Tink to bring multi-banking functionality to the bank’s Grip app.
Avaloqappoints Imad Abou Haidar as its new Head of Asia.
BeSmarteelaunches its new Mortgage Loan Officer (MLO) Command Center for loan originators.
Marqeta to create 175 new jobs in 2019, growing its workforce beyond 400 people.
SparkPost unveils new SparkPost Recipient Validation service, a sender reputation protection service that helps eliminate harmful bounces.
Azimo’s Richard Ambrose moves from COO to CEO, replacing Michael Kent.
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.
What happens when you mix automation with a library of stolen user credentials? This toxic combination allows bad actors to launch sophisticated attack campaigns against your public-facing web, mobile, and API-based applications. Attacks such as account takeovers and fake account creation lead to fraud and theft. This, in turn, has both a financial and reputational impact on financial services organizations.
In this #FinovateWebinar, we will highlight how these automated attacks take full advantage of Bulletproof Proxies, a rapidly growing class of infrastructure providers that have taken the concepts of anonymity and availability found in Bulletproof Hosting and extended them to the delivery infrastructure required to launch automated bot attacks. Topics to be covered will include:
Common automated attacks targeting financial services
What a Bulletproof Proxy is and why it matters
How Bulletproof proxies came to be and their place in the cyber community
Featuring
Matt Keil, Director of Product Marketing, Cequence
Courtesy of a partnership with NestReady, Missouri-based West Community Credit Union will soon offer a new and improved homebuying experience to its 26,000 members. The partnership between West Community CU and NestReady came about after the credit union’s president and CEO, Jason Peach, attended an event at fintech accelerator SixThirty.
“Our credit union strives to be very early adopters of technology that will enhance our members’ experience,” Peach said. “Being at the leading edge of innovation is important as there are many larger financial institutions as well as non-banks vying for our members’ business.” He praised NestReady’s technology as “a transparent environment” that “streamlines the more challenging aspects” of buying a home.
NestReady demonstrated its white label, end-to-end, homebuying platform at FinovateFall 2018. The technology automates many of the more cumbersome, labor-intensive steps in the mortgage process. It also leverages artificial intelligence and machine learning to give lenders actionable insights during the customer journey to ensure they are able to effectively engage the homebuyer at critical steps in the purchase process. The goal is to help boost the credit union’s role in the full homebuying experience – from the initial home search and discovery all the way through financing.
“Enabling (credit unions) to offer a true end-to-end homebuying experience and making them the trusted brand for every homebuying need is our primary focus,” NestReady CRO Marcos Carvalho said. He added that the company’s technology would help West Community CU “increase engagement and build loyalty.”
Awarded the Midwest Excellence Institute (MEI) Missouri Quality Award in 2018, West Community Credit Union serves members and businesses in St. Louis, St. Charles, and Boone counties. Founded in 1936 as Brentwood Mutual Credit Union, West Community CU has grown into one of the ten largest credit unions in Missouri, with assets of more than $260 million. The credit union, headquartered in O’Fallon, operates eight branch locations as well as mortgage lender West Community Mortgage, which it launched in 2017.
One of Finovate’s newer alums, NestReady announced in June that it was partnering with technology and marketing credit union service organization, CU Solutions Group (CUSG). NestReady also reported in that announcement that CUSG had made an investment in the company, though the amount was not disclosed. This spring, NestReady announced that a new partnership will also bring its technology to the loan originators of South Carolina mortgage banking company, Resource Financial Services.
With FinovateAsia and FinovateMiddleEast coming up later this year, we wanted to pause to take a look at the funding that participants from last year’s shows have received so far this year.
In the first eight months of 2019, four fintechs that participated in FinovateAsia and FinovateMiddleEast 2018 raised more than $23 million combined.
With real funding at stake, what are you waiting for? Apply to demo your tech at FinovateAsia or FinovateMiddleEast today. The application is free and you have nothing to lose!
The Middle East and North Africa startup culture has continued to mature, especially when it comes to early stage companies. Part of the growth can be attributed to the region’s investment in both talent and infrastructure. Coding programs and regional hackathons have not only added to the talent pool of startup recruits, they have also given the startup culture a boost.
In Asia, India has risen as the region’s top country for fintech funding. The $286 million in fintech funding the country raised in Q1 of this year outranks China’s total of $192 million raised for fintechs in that same quarter. Part of the slowdown in China can be attributed to increased regulation in the region.
If your startup is interested in demoing at this year’s FinovateAsia or FinovateMiddleEast conference, contact our demo team at middleeast@finovate.com or asia@finovate.com.
NestReady to Enhance the Homebuying Experience at West Community Credit Union.
Around the web
Tearsheet interviewsFlybits CEO Hossein Rahnama on the challenge of digital transformation.
Facebook partners with HackerOne to launch bug bounty for its Libra Project.
Crowdfund Insider quotesUnison CEO Thomas Sponholtz and Lending Club CEO Scott Sanborn on the trend of fintechs considering a move from the San Francisco area.
Hanscom Federal Credit Union selectsDigital Onboarding to facilitate account activation.
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.
Intelligent identity platform Ping Identity is making plans to go public. The company’s registration statement with the Securities and Exchange Commission, which paves the way for an initial public offering, was made available late last week.
The number of shares to be offered and the initial price range have not yet been disclosed, but TechCrunch reports that the company could secure a valuation between $2 billion and $3 billion. Ping Identity will list on the NASDAQ under the ticker symbol “PING.”
Vista Equity Partners, which acquired Ping Identity in 2016 for $600 million, will retain partial ownership of the company post-IPO. Goldman Sachs, Bank of America Merrill Lynch, RBC Capital Markets, and Citigroup are the IPO’s lead underwriters.
Founded in 2003, Ping Identity demonstrated its technology at FinovateEurope 2012. The company’s solutions enable customers and employees to securely and seamlessly access cloud, mobile, SaaS, and on-premises applications and APIs from any location. Ping Identity leverages single sign-on (SSO) and multi-factor authentication (MFA) to provide one-click, real-time access and security, helping organizations move toward a “Zero Trust” identity-defined security regime. Named a leader in Gartner’s Magic Quadrant for Access Management in 2019, the company introduced its new private cloud identity solution for the enterprise, PingCloud Private Tenant, earlier this month.
In its prospectus, Ping Identity notes that its platform secures more than two billion identities around the world as of June of this year. More than 50% of the Fortune 100 are Ping Identity customers, as are 12 of the biggest banks and five out of the seven largest retailers in the U.S. The company also highlighted its use of artificial intelligence and machine learning, as well as its role in helping develop open identity standards.
Financially speaking, the company is seeking a return to the profitability it enjoyed in 2017. Ping Identity reported year-over-year revenue growth of 17% the following year, and announced period-over-period revenue growth of 14% for the first six months of this year.
This spring, the company was namedBest Identity Management Solution at the 2019 SC Awards, and twice-honored by DeveloperWeek with its Devies and Info Security Global Excellence awards. Ping has forged partnerships this year with companies like fellow Finovate alum TIBCO to leverage AI to help defend APIs against cyberthreats, and with Citrix Analytics to enable contextual access for its Citrix Workspace.
Ping’s competitors in the SSO and MFA solution provider space include heavyweights like IBM and Oracle, as well as Microsoft. And while comparing its technology favorably to the “complex, costly and increasingly fragile” systems of its rivals, Ping Identity has partnered with Microsoft and noted the benefits of this relationship in its prospectus.
“(We) partner with Microsoft to provide SSO, security control and adaptive MFA where non-Microsoft environments require integration or independence is preferred,” the prospectus reads. “Microsoft’s integration and interoperability with our solutions benefits enterprises while providing optionality and choice.”
Ping Identity was founded by Andre Durand, who serves as the company’s CEO. The company is headquartered in Denver, Colorado.
