Lendio Launches Lender Turndown Program

Lendio Launches Lender Turndown Program
By Julie Muhn (@julieschicktanz) Posted on
Categories: Lendio

Small business loan marketplace Lendio is helping lenders turn a negative response into a positive one through the unveiling of its Lender Turndown program this week.

With the new program, Lendio’s network of lending partners can offer a loan alternative, instead of an absolute rejection, to small businesses that do not fit their risk profile. Through their partnership with Lendio, lending partners will offer small business borrowers access to Lendio’s marketplace, where more than 75 lenders can offer an alternative source of funding. The program, which has already provided more than $60 million in funding to small businesses, has 20 lending partners, with new partners being added every month.

“We are excited about the rapid growth of this program,” said Jim Granat, President of Lendio. “We are seeing an increase of lending partners joining the turndown platform because it allows them to turn an application decision from a ‘no’ into a ‘yes.’ Working closely with our trusted lending partners to provide additional funding options shows their commitment to customer satisfaction; it’s a great way for us to partner in helping main street get much-needed access to capital.”

Lendio showcased its marketplace at FinovateSpring 2011. The company’s average loan size is just under $27,000 and Lendio reports that 70% of businesses received the funds they requested within five days of submitting an application. The top business categories funded on Lendio’s marketplace include construction, restaurants, retail, healthcare, and manufacturing.

Last summer, the company surpassed the milestone of matching small business borrowers with more than $500 million in loans on its platform. For every loan it facilitates, Lendio donates a percentage of the funds to low-income entrepreneurs through Lendio Gives, an employee contribution and employer matching program.

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You Don’t Need an Innovation Lab

You Don’t Need an Innovation Lab
By Julie Muhn (@julieschicktanz) Posted on
Categories: Thought Leadership

We’re living in an era where major banks and financial services companies have their own in-house innovation labs. Major players who are generally thought of as too clunky to operate hip, fast-moving, tech-adopting divisions are getting in on the game. The list of financial services companies who have launched labs in the past ten years is a long one.

Banks such as Capital One, Citi, Visa, Chase, BBVA, DBS Bank, Fidelity, JP Morgan Chase, Deutsche Bank, FIS, and Lloyds have all launched their own fintech labs. Some banks, such as USAA, even have member labs, where the bank’s customers can opt to test out new services before they’re released, and offer feedback.

Even non-banks are starting labs of their own. At FinovateSpring last year, NCR showcased a lab-grown technology that leverages virtual reality to offer ATM servicing help. And earlier this year, business commerce platform Tradeshift launched an innovation lab to leverage new enabling technologies. The result of these labs are often beneficial and have led to multiple, successful product launches. In fact, Many products pitched from the Finovate stage started out as projects from a lab.

The photo above shows off Standard Bank’s innovation lab, from the Financial Brand’s article titled Peek Inside 7 of The Banking World’s Coolest Innovation Labs. As the article suggests, it’s cool. But do you really need a place that looks like a daycare to create and launch new services for your members? Smaller FIs may argue that they can’t– they are already strained for resources and aren’t able to move fast enough to bring a product to market before technology changes. So how can small banks compete?

Room to fail

Create room in your culture to fail. If all of a bank’s or a fintech’s employees are afraid to fail, none will be willing to take on the risk of suggesting or trying new things. When you remove the fear of failure and replace it with an incentive to test new ideas, you’ll be surprised how the culture shifts.

Start small

Fintech innovation doesn’t necessarily mean creating the next mind-reading IoT device that automatically optimizes your investments and doubles as a mobile wallet. Instead of being intimidated by fintech vaporware, think about a spreadsheet or a process that your team dreads. What move can you take to change that process? Maybe you can make it more efficient adding productivity-enhancing technologies to automate or digitize more tedious, time-consuming parts of the process. Or perhaps some portions of the process are no longer necessary, and the simplification is the innovation. Sometimes, starting small is starting tiny.

Use your size as an advantage

The advantage of creating change in a small credit union or community financial institution is the small size, which translates to small scale. When you want to implement a fintech initiative as a smaller FI, you can get your entire organization on board. Big banks can’t do that. If 100% of a bank or credit union is excited about the change and willing to push the new initiative, things can happen a lot faster.

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Finovate Alumni News

By David Penn Posted on
Categories: BioCatch, Coinbase, Ephesoft, Fiserv, Kabbage, Kapitall, MasterCard

On Finovate.com

  • Coinbase Launches Coinbase Ventures to Support Early-Stage Crypto Startups.
  • Kabbage and Ingo Money Team Up to Power Faster Loan Payouts to SMBs.

Around the web

  • Carter Bank & Trust ($4.1 billion in assets) partners with Fiserv as part of strategic, digital transformation.
  • Phillips 66 to offer digital payments at the pump courtesy of integration with Mastercard’s Masterpass.
  • Ephesoft unveils latest version of its smart document capture solution, Transact 4.5.
  • BioCatch wins “Best Innovation in Securing Transactions” at Florin Awards.

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.

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Coinbase Launches Coinbase Ventures to Support Early-Stage Crypto Startups

Coinbase Launches Coinbase Ventures to Support Early-Stage Crypto Startups
By David Penn Posted on
Categories: Coinbase

Volatility in cryptocurrency markets continues to spell opportunity for digital asset trading platform and cryptocurrency exchange Coinbase. The company announced on Friday that it was launching a new venture fund called Coinbase Ventures to support crypto-based startups.

“We’ll be providing financing to promising early stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way,” wrote Coinbase Head of Corporate and Business Development and Business Operations Emilie Choi at the Coinbase blog. “At least in the beginning, our goal is simply to help the most compelling companies in the space to flourish. This means that we don’t have the strategic requirement of formalizing partner relationships with such companies, as some corporate venture programs do,” Choi explained. “Our focus is on building strong relationships and helping to spur on the development of the ecosystem.”

Interestingly, Choi added that some of Coinbase Ventures’ investments may be “in companies that ostensibly look competitive with Coinbase.” By way of explanation, Choi said Coinbase was “comfortable” investing in potential competitors because “we’re taking a long term view of the space, and we believe that multiple approaches are healthy and good.”

The launch of Coinbase Ventures comes amid a flurry of activity for the cryptocurrency exchange platform. A month ago this week Coinbase unveiled its Coinbase Index and Coinbase Index Fund, a market cap weighted index and related fund that provide investors with exposure to all the digital assets available on its GDAX exchange. More recently, Coinbase made available new tax tools to help cryptocurrency investors and traders comply with IRS guidelines as they relate to reporting gains from digital asset transactions.

Additionally, Coinbase announced support for the withdrawal of Bitcoin forks across its products “in the coming months”. The decision will make it easier for customers to withdraw assets associated with Bitcoin Forks, though Coinbase noted that supporting withdrawal for a bitcoin fork does not mean the asset will be available for trading on the platform. “Assets that are listed for trading will be independently evaluated using the Digital Asset Framework,” according to a post at the Coinbase blog. The company hopes that the simultaneous internal and external announcement would help it avoid the controversy surrounding the trading of Bitcoin cash last December.

Founded in 2012 and headquartered in San Francisco, California, Coinbase demonstrated its platform at FinovateSpring 2014. The company, which has raised more than $225 million in funding, launched its crypto eCommerce acceptance platform, Coinbase Commerce in February, and began the year with the acquisition of the engineering team from Memo.AI.  Named to the Forbes Fintech 50 for the second year in a row earlier this year, Coinbase earned unicorn status last August after closing a $100 million Series D round that boosted the company’s valuation to an estimated $1.6 billion. Founder Brian Armstrong is Coinbase’s CEO.

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Finovate Global: Fintech News from the Periphery

Finovate Global: Fintech News from the Periphery
By David Penn Posted on
Categories: Finovate Global, nanoPay, Sberbank

As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global: Fintech News from the Periphery is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.

MENA

  • Abu Dhabi Financial Group (ADFG) invests “substantial capital” in U.S. VC firm, 500 Startups.
  • Madfooat.com raises $2.3 million in Series B funding.
  • Saudi Arabia Monetary Authority introduces online payments service via the Saudi Payment Network.

Africa

  • nanopay CEO Laurence Cooke discusses the role of mobile money payment platforms will play in the transformation of Africa’s banking system.
  • South African Reserve Bank establishes division to build proof of concept for distributed ledger technology-based interbank clearing and settlement.
  • South African software company Finteq will collaborate with Zimbabwe’s Zimswitch EFT switch and clearing house to build an automated clearing house.

LATAM

  • Banks in Chile shut down accounts of local cryptocurrency exchanges.
  • Brazil’s leading consumer loan marketplace FinanZero raises $3.6 million in Series A funding.
  • Deutsche Welle looks at Spain’s “under the radar” rise as a digital leader.

CEE

  • Romania’s first factoring fintech platform, Instant Factoring, goes live.
  • Sberbank partners with systems integrator I-Teco to develop joint cloud platform, SberCloud.
  • PKO Bank Polski teams up with blockchain company Coinfirm to log and store client transactions and agreements.

Asia

  • China and Singapore complete first all-blockchain commodity trade.
  • Is it time for a fintech revolution in the Philippines?
  • Bank Indonesia announces 15 fintech companies as official payment system providers.

Top image designed by Freepik

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GoodData Goes for Insurtech

GoodData Goes for Insurtech
By Julie Muhn (@julieschicktanz) Posted on
Categories: GoodData

Data analytics and insights company GoodData expanded into the insurance industry this week to simplify claims and underwriting. The San Francisco-based company’s foray into insurtech is marked with the launch of two analytical solutions, Underwriting Insights and Claims Insights.

These two products aim to help insurance companies enhance the end customer experience by automating data integration. GoodData leverages machine learning and AI to automate multiple steps in the claims and underwriting process. The solutions alert insurers of recommended actions that reduce underwriting risk and improve insurance adjusting decisions.

In a press release, Roman Stanek, founder and CEO of GoodData said, “While most Business Intelligence tools require a separate pane of glass to deliver static information based on historical data, we’re bringing analytics and recommendations directly into the business process so employees can determine the correct course of action within seconds.”

Underwriting Insights and Claims Insights are only the start of GoodData’s move into insurance. The company already has other insurance-specific offerings in the works, such as a Customer Acquisition Optimization tool.

GoodData crafted the insurtech solutions to be quick to onboard. While most of the company’s solutions can be implemented in eight weeks, with the new insurance offerings, firms can be production-ready in six weeks.

GoodData was founded in 2007 and works with 70,000 companies across the globe, including 8 of the 10 largest brands. The company’s business intelligence solutions reach more than 1 million end users. At FinovateFall 2017, GoodData showcased its Insights PaaS. Earlier this spring, Carol Lee joined the company as chief financial officer and last December, GoodData added James Smith as chief marketing officer.

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Finovate Alumni News

By Julie Muhn (@julieschicktanz) Posted on
Categories: Coinbase, Featurespace, GoodData, Jumio, Kantox, Kreditech, LendingTree, PaySimple, TransferWise, Trustly, Zopa

On Finovate.com

Around the web

  • PaySimple announces latest payment integration with Profit Rhino’s selling app for home service companies.
  • The Financial Times ranks Transferwise, Kantox, Zopa Featurespace, Trustly, Kreditech on its FT 1000 list of Europe’s fastest growing companies.
  • Jumio and Insights Network partner to deliver “Passport” for blockchain projects.
  • LendingTree launches Credit Analyzer, a free credit and debt analysis tool.

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.

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WorkFusion’s $50 Million Round to Fuel Robotic Process Automation

WorkFusion’s $50 Million Round to Fuel Robotic Process Automation
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, WorkFusion

Robotic process automation (RPA) technology is a term that’s becoming more and more common in fintech. And thanks to WorkFusion’s $50 million round announced today, it’s a trend that’s gaining even more footing.

This Series E investment was led by Hawk Equity and Declaration Partners, with contributions from previous investors Georgian Partners, iNovia Capital, and NGP Capital. WorkFusion’s total funding now stands at $118 million.

The company also announced today it has appointed former President Alex Lyashok as CEO. Lyashok will take the reins from Co-founder and former CEO, Max Yankelevich, who will transition to Chief Strategy Officer.

Hawk Equity Founder David Hawkins said that WorkFusion is a “clear leader” in leveraging intelligent automation for workforce efficiency. The company plans to use the $50 million to expand its global operations, which is essential to accommodate growing interest in RPA software. According to Lyashok, “Demand for our products grew 850% in 2017, reaffirming the power of AI to automate common business processes such as customer onboarding in banking, claims processing in insurance, or accounts payable in shared services.”

WorkFusion was founded in 2010 and is headquartered in New York City with offices in eight countries throughout Europe and Asia. At FinovateFall 2014, Yankelevich demoed how banks can leverage the company’s active learning automation technology to create workflow efficiencies. Last year, the company partnered with IBA Group to launch a Smart Application for customer support email processing.

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Lender Price Integrates with Mortgage Management Solution from Ellie Mae

Lender Price Integrates with Mortgage Management Solution from Ellie Mae
By David Penn Posted on
Categories: Ellie Mae, Lender Price

Cre8tech Labs’ Lender Price, a digital mortgage platform that provides a product pricing and eligibility engine and competitive, real-time analytics, has partnered with fellow Finovate alum Ellie Mae. The Pasadena, California-based company, which demonstrated its PPE engine at FinovateSpring last year, will integrate its technology with Ellie Mae’s all-in-one mortgage management solution, Encompass. “Our pricing engine coupled with our real-time competitive analytics platform provides actionable insight into competitor pricing,” Cre8tech Labs President and CIO Dawar Alimi said.

Lender Price gives mortgage loan originators an openly accessible marketplace to price mortgage loans with hundreds of lenders in real-time. The company’s PPE engine can handle producing pricing and eligibility across all mortgage products including Conforming, Non-Conforming, Specialty Loans, and Hard Money, making it a more flexible solution compared to pricing engines built over a decade ago that are still commonly used.

“We are delighted to partner with Ellie Mae,” said Jerry Halbrook, who joined Lender Price as CEO in September. “Our secure, seamless integration with Encompass enables our clients to simplify the process of managing Products, Pricing and Eligibility, so they can more efficiently process mortgage loans and grow their business. We look forward to a long, successful relationship with Ellie Mae.”

Lender Price is the second Finovate alum to team up with the cloud-based mortgage finance platform provider this year. In March, Finicity announced that it was integrating its digital verification technology into Ellie Mae’s Encompass solution. Ellie Mae SVP of business development Parvesh Sahi said this underscored Ellie Mae’s commitment to working with technology partners to improve the way it serves customers and “change the way lenders and consumers engage in the loan manufacturing process.”

Founded in 2015, Lender Price demonstrated its technology at FinovateSpring 2017. With more than 85 partners and more than 30,000 registered users, Lender Price also recently partnered with Black Knight to integrate its LoanSphere Empower LOS into Lender Price’s POS solution. Last fall, the company was named a 2017 HW Tech100 Winner by Housing Wire.

Also demoing its technology at FinovateSpring 2017 last year, Ellie Mae showed how its Encompass Connect Solutions, Consumer Connect and Developer Connect, help lenders improve the application process for customers and provide developers with tools to quickly add new features and customizations to the platform. In March, Ellie Mae launched its Encompass Data Connect solution, which provides mortgage lenders with real-time data to help them make better lending decisions.

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$1.32 Billion Raised by 26 Alums in Q1 of 2018

$1.32 Billion Raised by 26 Alums in Q1 of 2018
By David Penn Posted on
Categories: Funding, Fundings

It seems as if it was only yesterday when we were looking at the first quarter funding numbers for our alums in 2017 and wondering if the slow start was a harbinger of investment stinginess to come.

Fortunately, by the end of 2017, investment in fintech in general and our Finovate alums in specific had rebounded strongly. As the financial world accommodated itself to the incoming Trump administration, so too did fintech investors get back to the business of putting major money behind some of our industry’s most innovative startups. The result was a big year for Finovate alums who raised more than $2.7 billion for 2017, recording their fourth consecutive year of more than $2 billion in funding.

And it looks like the momentum is still going strong. For the first quarter of 2018, 26 Finovate alums have raised more than $1.32 billion in funding combined. This number is not only more than 5x our first quarter funding total from last year, it also rivals any other first quarter in our history – as our quarterly comparison below shows.

Previous Quarterly Comparisons

  • Q1 2017: $230 million raised by 20 alums
  • Q1 2016: $656 million raised by 32 alums
  • Q1 2015: $680 million raised by 29 alums
  • Q1 2014: $600 million raised by 23 alums

What is especially tantalizing about Q1 numbers this year is the high number of undisclosed investments. This quarter, five of the investments were undisclosed. This compares with two undisclosed investments from Q1 2017, five in Q1 2016, one in Q1 2015, and one in Q1 2014. The actual amounts of undisclosed investments can vary widely, of course, but having five such investments in a quarter suggests our real alum funding total for Q1 is actually higher.

Top 10 Equity Investments

  1. Credit Karma: $500 million
  2. NuBank: $150 million
  3. eToro: $100 million
  4. Ledger: $75 million
  5. Wealthfront: $75 million
  6. Alkami: $70 million
  7. defi SOLUTIONS: $55 million
  8. Endor: $45 million
  9. Stash: $37.5 million
  10. Ohpen: $31 million

In terms of the top equity investments in the first quarter, Credit Karma stands out with their secondary investment of $500 million. NuBank’s $150 million comes in second place, with the $100 million raised by eToro being our third largest equity investment of the first quarter of the year. Tied for fourth place are Ledger and Wealthfront, each raising $75 million in funding. The top 10 equity investments in Q1 totaled $1.14 billion or 86% of the quarter’s total funding.

Here is our detailed alum funding report for Q1 2018.

January: More than $338 million raised by ten alums

February: More than $156 million raised by ten alums

March: More than $825 million raised by six alums

If you are a Finovate alum that raised money in the first quarter of 2018, and do not see your company listed, please drop us a note at [email protected]. We would love to share the good news! Funding received prior to becoming an alum not included.

Top image designed by Freepik

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The Analysts are Up & the Pressure is On

The Analysts are Up & the Pressure is On
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateSpring 2018

After the final fintech demo at FinovateSpring next month, the next highlight to take the stage will be a committee of six fintech experts. Each analyst will have seven minutes to make their case for what they see as the hottest trend and opportunity in financial services.

The pressure is on for this group. Here’s who will be in the hot seat at FinovateSpring next month:

Jacob Jegher

Jegher is an experienced fintech executive and digital banking thought leader. He advises clients on emerging technologies and business strategies related to retail, small business, and corporate digital banking. Jegher provides strategic consulting to financial institutions and solution providers on issues ranging from digital strategy to vendor selection. In addition to his client-facing responsibilities, Jacob leads Javelin’s overall strategy, marketing, and product development efforts.

Most recently, Jegher was Vice President of Global Solution Marketing and Head of Analyst Relations at FIS, where he was responsible for marketing strategy efforts across all business units and solutions. He also brings extensive expertise in the banking research and consulting field, having spent over 10 years as a Research Director at Celent.

Tiffani Montez

Montez is a Retail Banking senior analyst at Aite Group covering card issuance for prepaid, credit, and debit cards. She has deep experience in global financial services with more than 20 years of experience in strategic planning, strategic execution, and consumer experience design. Montez has the unique ability to not only build strategies but also provide the strategic guidelines for executing complex strategic plans to deliver results.

Prior to joining Aite Group, Montez held executive-level positions at Wells Fargo, building digital experiences for various product groups such as home lending, personal credit, wealth, brokerage, and retirement, and was a principal analyst at Forrester Research, covering topics such as mobile banking, digital financial management, multichannel banking, and next-generation sales strategies. Most recently, she was the VP of operations at Terafina, helping banks and credit unions transform their customer experience through an omnichannel strategy. Her unique blend of experience as a practitioner, analyst, and vendor solution provider gives her the foundation to be able to provide thought leadership to clients through all lenses of the financial services ecosystem.

Ron Shevlin

Shevlin is the Director of Research at Cornerstone Advisors where he heads up the firm’s strategic research efforts, including the Insight Vault service. Shevlin is the author of the book, Smarter Bank, and is the purveyor of fine snark on his Snarketing blog and the Fintech Snark Tank podcast. Shevlin’s experience includes research and consulting for Aite Group, Forrester Research, and KPMG.

Shane Hubbell

Hubbell is a Vice President at Arbor Advisors and has more than 10 years of experience as an investment banker, business operations manager, and entrepreneur. In his role at Arbor, Hubbell is responsible for driving the firm’s business development efforts to source new clients as well as helping clients execute successful transactions. He has executed over $600 million of M&A and capital raising transactions over his career.

Prior to joining Arbor, Hubbell helped drive the strategic development of Goldman Sachs’ derivative trading systems. Previous to this, he was co-founder and CFO of a biotechnology company that developed a safer device for a cricothyrotomy.

Daniel Latimore

Latimore, CFA, is the Senior Vice President of Celent’s Banking group and is based in the firm’s Boston office. Latimore’s areas of focus include the banking ecosystem, digital and omnichannel banking, and innovation. Underlying each is a keen interest in consumer behavior and technology-enabled strategy. Latimore is a frequent speaker at industry conferences and client gatherings, having addressed audiences ranging from intimate meetings of CEOs and central banks to conference keynotes in more than a dozen countries. He led research groups at Deloitte and IBM, worked in industry Liberty Mutual and Merrill Lynch (where he lived in New York, Tokyo and London), and was a consultant at McKinsey & Co.

Jerry Silva

Jerry Silva is research director for IDC Financial Insights responsible for the global retail banking practice. Jerry’s research focuses on technology trends and customer expectations and behaviors in retail banking worldwide. Jerry draws upon over 25 years experience in the financial services industry to cover a variety of topics, from the back office, to customer channels, to governance in the technology shops at financial institutions. His work for both institutions and vendors gives Jerry a broad perspective in technology strategies.

Join us on May 8 through 11 at the Santa Clara convention center to hear the experts talk about the latest in fintech. Register by April 27 and save.

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Finovate Alumni News

By David Penn Posted on
Categories: Arxan Technologies, Ellie Mae, Geezeo, InComm, Lender Price, Malauzai, Malauzai Software, Mr. Cooper, WorkFusion, YellowDog

On Finovate.com

  • Lender Price Integrates with Mortgage Management Solution from Ellie Mae.
  • WorkFusion’s $50 Million Round to Fuel Robotic Process Automation.
  • $1.32 Billion Raised by 26 Alums in Q1 of 2018.

Around the web

  • Retail chain Speedway names InComm Innovative Business Partner of the Year.
  • Technology from Malauzai and Geezeo contributes to new mobile app for Florida’s Axiom Bank.
  • YellowDog announces new partnership with [RE]DESIGN.
  • Mr. Cooper awarded Top Servicing Performance Rating from Fannie Mae. Come see Mr. Cooper’s demo at FinovateSpring next month.
  • Arxan launches new app security monitoring and analysis service, Arxan Threat Analytics.

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.

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