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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Berkshire Bank partners with Finastra to launch real-time payments.
Belgian online lender Buy Way deploys e-signature solution from OneSpan.
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.
We’re only halfway through 2019, and it’s already been a big year for fintech. The last few years have given us exciting fintech developments with a lot of potential, and it looks like this is going to be the year where those promising new technologies make the transition to real-world solutions.
And no area of fintech exemplifies this trend more than AI and machine learning. With such a wide variety of applications on show at FinovateSpring, and beyond, it’s clear to see the conversation moving beyond getting started with AI to how to leverage it for best use.
Of course, fintech is about much more than AI, and this issue of the Finovate eMagazine takes more of a deep dive into digital banking and payments, and the technology shaping this particular section of the industry. Read on for a recap of FinovateSpring, insights from some of our exciting speakers, an overview of the 8 companies that the audience selected as Best of Show, and more.
PlainsCapital Bank is the latest FI to take advantage of the omnichannel sales technology from Terafina. The company, whose platform is specifically designed for community banks and credit unions, announced that the bank has leveraged its small business onboarding solution to streamline the process of acquiring its SME customers.
President and COO of Terafina Ashwin Goyal praised PlainsCapital Bank as having made “all the right strategic moves” in distinguishing their product offering in the market. “They are designing a compelling small business banking strategy,” he said, “that helps them stand out from others, while taking advantage of the overlap with their existing retail capabilities and leveraging their trusted community footprint throughout Texas.”
PlainsCapital Bank sought to improve its small business customer onboarding to better serve its rapidly growing client base. In choosing Terafina, the institution is also trying to take advantage of small businesses’ willingness to choose a community bank or credit union as its bank partner (51% in a 2017 Raddon study) as well as the ability to market new products and services to SMEs more directly.
“We have been able to significantly improve the onboarding experience while penetrating the retail segment with small business products,” said Chief of Retail Banking for PlainsCapital Bank Matt Adkins. “This unique capability has added great value to our customers’ experience.”
PlainsCapital Bank is the fifth-largest bank in Texas based on deposit market share. Founded in 1988, the bank offers commercial, private, and consumer banking services, as well as treasury and wealth management. The Dallas-based institution has $9.7 billion in total assets, and operates more than 60 branches in cities such as Austin, Houston, and San Antonio.
Fremont, California-based Terafina demonstrated its Digital Sales Platform at FinovateSpring 2019. The technology enables community banks and credit unions to leverage the onboarding process to build deeper, lifecycle relationships with their clients. This helps FIs better tailor their product offerings, increase conversions, and drive growth.
It has been a busy first half of 2019 for Terafina. In April, the company announced that Gesa Credit Union, one of the largest credit unions in Washington state, with more than $2 billion in assets and 150,000+ members, would deploy its platform to provide real time sales and service offerings to its members. In March, the company reported that KeyPoint Credit Union, based in Silicon Valley and boasting $1.32 billion in assets, was going live with its omni-sales platform, as well.
Digital identity innovator IdentityMind is helping global crypto-to-fiat exchange operator BITPoint continue its expansion in Latin America by providing KYC/AML solutions for the firm’s newest exchanges in Panama and Peru.
BITPoint LATAM will use IdentityMind’s technology to identify and stop identity fraud and money laundering, as well as establish risk profiles and score reputations. The company will also leverage automated transaction monitoring to spot suspicious activity and provide alerts.
“We have been helping digital currency and asset exchanges in more than 40 countries since 2013,” IdentityMind Director of Products Neal Reiter said, “and we continue to build specific support within our platform as the regulatory requirements and technology evolves.” Reiter praised BITPoint as a company that “takes regulation seriously.”
In addition to helping BITPoint better assess risk and remain compliant, the company’s Operations Director Latam Julian Geovo said that the partnership with IdentityMind paves the way for a better regulatory environment for fintechs throughout the region more broadly. “In Latin America we see a very interesting opportunity, and we are here to work with the authorities and the traditional financial system in order to create and guarantee a sustainable model and regulation-oriented ecosystem for this new industry,” Geovo said.
He added that the company’s experience with the advanced laws and regulations of Japan, where BITPoint is headquartered, will help establish best practices in terms of compliance in Latin America.
IdentityMind Director of Commercial Operations for Latin America Mirel Aguirre similarly sees great potential for the growth of fintech in the area – and for regtech to help guide that process. “Latin America is witnessing an explosive growth in FinTech,” he said. “The financial inclusion revolution is disrupting the traditional financial ecosystem, and IdentityMind’s RegTech Digital Identities platform for KYC and AML is bringing cost-effective, state-of-the-art technology to support all companies to comply with the local authorities and international regulations.”
The partnership is the latest example of how IdentityMind is leveraging its growing presence in the region to forge new partnerships and expand the reach of its digital identity technology. Earlier this year, the company announced a deal with Latin American microlender MO Tecnologías. IdentityMind opened a new office in Mexico City in the spring of 2017.
The BITPoint news comes just a month after IdentityMind announced a collaboration with investorID to improve AML and KYC compliance for investors in security token offerings (STOs). This spring, the company teamed up with OTC trading desk Koi Trading to power the firm’s AML compliance-as-a-service offering Koi Compliance.
Palo Alto, California-based IdentityMind demonstrated its pre-figured, customizable, SaaS KYC plug-in solution at FinovateSpring 2018. Named to the RegTech 100 for two consecutive years, the company has raised $21.5 million in funding and includes Eastern Link Capital, Benhamou Global Ventures, and Lakewood & Company among its investors.
iSignthis has now approved more than 150 reportable accounts.
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.
One of the biggest banks in Romania, Banca Transilvania, is teaming up with Israel-based CallVU to support the launch of its new digital customer experience: BT Visual Help. The solution will drive mobile self-banking, and empower customers with features like card controls to block transactions or modify transaction limits.
The technology has successfully emerged from a beta phase involving more than 10,000 actions in two months from bank customers using the solution. Gabriela Nistor, Deputy Chief Executive Officer for Retail Banking at BT told Romania-Insider that CallVU was the ideal answer to the challenge of using new digital technologies to bring positive experiences to customers. “CallVU suited our needs extremely well and came with what we wanted,” Nistor said.
Founded in 2012 and headquartered in Tel Aviv, Israel, CallVU demonstrated its Digital Engagement and BOT Platform at FinovateSpring 2017. The solution automates business processes and maximizes digital assets in order to create consistent, cross-channel customer journeys. The platform helps steer queries to digital self-service, improves first contact resolution, and supports digital transformation.
Banca Transilvania offers retail, small business, and corporate banking services, and was voted The Most Trusted Brand in 2014 by the Romanian public. Founded in 1993, the bank has assets of $12 billion as of 2016 (RON 51.76 billion), more than 1.7 million customers, 550 locations, and more than 7,000 employees. Banca Transilvania is headquartered in Cluj-Napoca, Romania and, with Omer Tetik as CEO, is led by one of the youngest bank CEOs in the country.
CallVU’s partnership with Banca Transilvania is the most recent headline for the company. It began the year with news of a partnership with interactive voice and customer experience solutions provider Blueworx that added its visual-IVR solutions to Blueworx’s CX portfolio. In March, CallVU collaborated with NICE Robotic Process Automation (RPA) to offer organizations enriched IVR and digital customer engagement for the front end, with smart automation for complex back end processes.
CallVU has raised $8 million in funding. The company includes Liberty Global Ventures and Global Fintech Solutions among its investors.
As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global: Fintech News from Around the World is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.
Latin America and the Caribbean
Cross-border digital payments company PPRO acquires Latin American payments provider allpago.
Executives from financial cooperatives in Latin America meet with Denver, Colorado-area credit union leaders as part of immersion program sponsored by the World Council of Credit Unions’ Pasantia Tecnica.
Brazilian government and bank and insurance regulators agree to establish a regulatory sandbox to support fintech and insurtech development.
Asia-Pacific
Vietnam-based payments firms Vimo Technology and Vietnam MPOS Technology merge to become NextPay.
Learn more about Vietnam’s fintech ecosystem in this Fintech Startup Vietnam Map.
Indonesian fintech provider Achiko announces plans for direct listing on the SIX Swiss Exchange.
Sub-Saharan Africa
African Development Bank launches £100 million fintech fund focused on growing financial inclusion.
Ventureburn takes a look at the Nigerian fintech startup scene.
African payment service provider (PSP), DPO Group, introduces Africa’s first B2B prepaid, virtual and physical payment card: the DumaCard.
Central and Eastern Europe
“Hi Oleg!” Russia’s Tinkofflaunches new voice assistant for its banking app.
Fintech Futures features Poland’s Braintri in a discussion of how fintechs are leveraging real-time data to help banks improve the customer experience.
Are regulations in Hungary an obstacle to fintech innovation? BNE Intellinews considers the case of Hungarian payments company Barion.
Middle East and Northern Africa
S&P Global Ratings gives Gulf Cooperation Council countries the edge over their neighbors in the Middle East and Africa when it comes to the fintech adoption rates.
PayU acquires Turkish fintech Iyzico for $165 million.
Tez, a digital, non-bank microfinance startup based in Pakistan, took home $100,000 in prize money after winning the FinTech Challenge at the inaugural Visa Everywhere Initiative for Women.
Inc42 looks at the how India’s current fintech boom is contributing to financial inclusion.
Tinkoff introduced Оleg, a voice assistant created in Russia for finance and lifestyle-related tasks, with the mission to help users navigate within the Tinkoff ecosystem, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).
Surprisingly, Oleg is man, aged somewhere “between 25 and 40 years of age,” and seems to have a lot of personality, according to the bank.
According to the bank, Oleg, which can be accessed through the bank’s app, is able to recognize and interpret different user commands, ask follow-up questions, solve problems and speak on a variety of topics.
The AI can complete tasks such as transfer money to accounts at Tinkoff Bank and Sberbank, make restaurant reservations, book beauty salon appointments, buy cinema tickets with a cashback offer, search for discounts on products and services, converse on various topics, manage financial products (debit and credit cards), and more admin tasks, with many more to come.
Oleg will also be able to identify a user’s voice using biometric data and carry out commands that currently require authorisation within the Tinkoff app.
To start a conversation in the mobile app, one has to say “Hi Oleg” or “Listen Oleg” in Russian. You can ask Oleg a question, like “What’s on tonight” or ask him to perform a task, such as transfer funds. Oleg will be able to converse about various things, including himself.
Oleg can also say “Enough” or “Speak with a representative” if they feel Oleg isn’t resolving their problem successfully.
Tinkoff demonstratedStories for its mobile banking app at FinovateEurope 2018. Headquartered in Moscow, Russia, and founded in 2006, the digital-only, branchless bank serves more than seven million customers, employs more than 20,000 people, and operates nine research and development hubs across Russia.
Fenergoenters the Taiwanese market through a partnership with TUNG-I Information Services (TUNG-I).
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.
Early-stage, next generation fintechs are the target of the new accelerator program launched by IBM this week: The IBM Hyper Protect Accelerator Powered by IBM LinxuOne. Selected companies will collaborate with IBM and its partners, IBM Alpha Zone, Queen City Fintech, and MEDICI as they work to turn their startups into “sustainable and scalable companies.”
A total of fifteen early-stage, pre-Series A startups from both fintech and healthtech will be selected for the program. The application window closes at the end of July, and companies are expected to be selected in September. Later that fall, startups will participate in an in-person workshop event where they will have the opportunity to demo their solutions before an audience of IBM partners, customers, and investors.
IBM will provide the companies with a virtual mentorship of monthly one-on-one and quarterly all-hands check-ins for two years after completing the program. The startups will also benefit from a one-year business mentorship, with monthly and quarterly consultations, and the opportunity for the startup to participate in a second in-person demo day.
Companies in the program will be able to access technical workshops from IBM, and take advantage of a 300+ member network of business mentors and technical support. Startups will also have access to up to $10,000 a month in IBM cloud technology credits that can be applied each month to access IBM Cloud Hyper Protect Services. Up to $120,000 in credit can be earned by startups by the end of the program.
IBM will leverage its LinuxONE server platform to power IBM Cloud Hyper Protect Services and provide the kind of highly secure environment necessary for fintech and healthtech companies that need to protect sensitive data in cloud native apps. The highly scalable platform will also ensure that program participants will enjoy maximum uptime and availability.
IBM has been a Finovate alum since 2016 when it demonstrated its Client Insight for Wealth Management solution. The company has also been a participant in our developers conferences, presenting the Implementation of the Hyperledger Project at IBM with Blockchain as a Service at FinDEVr Silicon Valley 2016. Most recently, IBM Security demonstrated its IBM Trusteer New Account Fraud solution at FinovateEurope 2018.
Mary Meeker, general partner at Bond Capital, a VC firm she founded, released her Internet Trends Report this week at Recode’s Code conference. The report, which aims to deconstruct the future of the internet, has come to be a yearly highlight for techies since 1995, as it contains data and insights on nearly every aspect of the internet.
At 333 pages long, the report contains a wealth of information relevant to a range of industries, so we’ve dissected a quick look at some of the details that are relevant and useful specifically for banking and fintech.
The number of internet users is at 50% global penetration but growth is slowing.
The Asia Pacific opportunity persists: Asia Pacific claims 21% of global internet users. The U.S. trails at 8%.
Ecommerce growth is “solid” and up from last year.
Customer acquisition costs are rising and have been steadily increasing over time.
Customers try a new service if they see a positive product recommendation or if they can first use a freemium version. In fact, Meeker said the freemium strategy as a business model is “just getting started.”
Investment from VCs, public stock exchanges, and IPOs remains high.
The best ways to engage with audiences are through short form video or voice engagement, such as podcasts or Amazon Echo, which now has 4.7 million users (up 2x since last year).
Cyber attacks are on the rise but the time it takes to detect them is falling.
Digital payments account for more than 50% of daily transactions.
In the report, Meeker also mentioned specific fintechs and their growth. Including:
China’s Alipay has 1 billion users, up 2x in two years.
South Korea’s Toss has 12 million users, up 2x in one year.
Revolut has 4 million users, up 2x in 10 months.
Brazil’s NuBank has 9 million customers, up 2x in one year.
Latin America’s Mercado Libre has had 389 million transactions, up 2x in two years.
Read the full report or check out Recode’s bullet point breakdown to get a gist of the fuller picture.
In a marriage between payments innovators from Sweden and Silicon Valley, Trustly has announced that it has agreed to merge with U.S.-based PayWithMyBank. The merger comes a little over a year after Nordic Capital announced taking a majority stake in Stockholm’s online banking payments provider.
“This transformative merger creates the first and only online banking payments network with transatlantic coverage and accelerates our path towards global coverage,” Trustly CEO Oscar Berglund said. He credited PayWithMyBank for being an online banking pioneer going back to 2000. “Together we’re thrilled to be able to offer merchants and billers a unique alternative to card payments,” Berglund said, “allowing them to accept payments from 600 million consumers across Europe and the U.S.”
According to Trustly spokesperson Meredith Popolo, the two companies will continue to operate under their own brands “for now.”
Just this week, we took a look at the rise in M&A activity among fintechs. The news that Trustly and PayWithMyBank will combine into a global payments entity with revenues of more than $120 million (€100 million) in 2018 serves as further evidence of this trend. The merger between payment specialists also supports the trend toward enabling consumers to pay directly from their bank accounts – cutting out the card networks altogether.
Trustly’s straightforward, three-step process makes it easy for consumers to shop and pay directly from their bank accounts. Via the Trustly option during checkout, users select their bank from a drop-down menu and log on as usual. Then they choose the account from which they want to pay, and confirm the payment with the authentication option of their choice. The technology helps merchants improve conversions and reduce churn while providing bank-grade security.
PayWithMyBank CEO Alexandre Gonthier pointed out that the idea to merge with Trustly was in some ways a function of demand. “Our large, U.S.-headquartered customers were all asking us to expand our consumer coverage globally beyond the U.S.,” Gonthier said. “So, joining forces with Trustly, the established leader in our space in Europe, was a natural strategic next step for PayWithMyBank, the emerging leader in the U.S.”
Redwood City, California-based PayWithMyBank was founded in 2012, and provides a high-UX conversion, high-payment authorization, low-cost, no-chargeback alternative to checks as well as other popular payment methods such as Visa, Mastercard, and PayPal. The firm’s client list includes Western Union, First Data, United Way, and a number of social media and telecommunications firms and utility companies.
As a result of the merger, Gonthier will serve as U.S. CEO, where he will oversee the U.S. market and report to Oscar Berglund, who will serve as Group CEO.
Founded in 2008, Trustly demonstrated the Direct Debit feature of its platform at FinovateEurope 2017. Direct Debit enables recurring charges and one-click payments on bank accounts, providing faster, safer transactions for customers and merchants.
More recently, Trustly announced a partnership with Collector Bank to bring instant payments to merchants in the Nordics. Last month, the company introduced its automated invoice payment solution, Pay Your Invoice, for both customers and merchants. With offices in Stockholm, Sliema, London, Orebro, Cologne, Barcelona, and Helsinki, the company celebrated adding its 300th employee this year.
