The Best of Europe’s Fintech at FinovateEurope 2020

The Best of Europe’s Fintech at FinovateEurope 2020

Fintech innovation is growing at an exponential rate and the need for financial institutions to embrace digital transformation has never been more urgent. We are at the beginning of a new S curve; just as the smartphone began to transform financial services in 2007, we now face unprecedented change driven by artificial intelligence, 5G and quantum computing.

In Berlin in February, FinovateEurope brought together 140+ expert speakers; 50+ cutting-edge demoing companies and 1,000+ attendees to explore the road to success in a brave new digital world.

The first day got off to a rousing start with a keynote address from Steven van Belleghem, author of Customers The Day After Tomorrow. His key message? The number one resource that we are all short of is time; the companies that save customers time are really solving a problem for them. The tech giants are excelling at this – how can financial institutions emulate their approach? If they don’t address real customer pain-points they risk losing them to new competitors.

In a new initiative for 2020 we then offered the audience the choice of five industry stages to attend – Digital Future, Open Banking Future, Future Tech, Future Payments, and Future Insurance. Themes that cropped up repeatedly across all five stages were the critical importance of the customer experience, the ability to effectively leverage data, and the need to embrace new technologies for real business reasons– not just for window dressing.

Two days of over 50 live demos followed, once again putting innovation front-and-center on the stage. Our unique demo model showcased the most transformative solutions currently being created across the whole fintech value chain and gave the audience the chance to speak to the innovators behind the most exciting tech in finance.

Across the whole event we covered a myriad of topics – from digital journeys to customer experience, open banking to payments, challenger banks to insurtech, digital identity to financial crime, AI to blockchain – and we launched three new initiatives.

Our Start-up Booster program was a huge hit with startups seeking expert advice around funding, scaling, and partnerships.

The Executive Reboot program allowed C-suite executives to brainstorm how to address their legacy culture and find a path to change with our keynote speakers.

And our Women in Fintech program brought together a highly engaged audience to explore the critical need for of diversity in financial services.

It was a jam-packed three days and the feedback was amazing – we look forward to returning to Berlin for more next year.

-Katie Gwynn-Williams, FinovateEurope 2020 Director

Catch the photos from FinovateEurope 2020 >>

Photos from FinovateEurope 2020

How a Banking License Evolved Neo’s Vision

Neo was founded in 2017 with a vision, as described by CEO Laurent Descout, “to create a platform that can replace the old fashioned banking platform. A true ‘one-stop shop’ that offers all the financial products a corporate client needs to operate in a global environment.”

The Spain-based company demoed its business account platform at FinovateEurope. At the event Descout, along with the company’s Chief Product Officer Emmanuel Anton, showcased how Neo offers a single place where businesses can manage their collections and payments across 30 currencies.

Neo also showed the audience (check out the video below) its FX hedging engine that enables businesses to hedge their FX risk over 90 currencies. The company offers a range of FX instruments, such as forwards, swaps, and options, as well as pre-designed hedging strategies.

Last July Neo received authorization from the Bank of Spain to become a PSD2-compliant payment institution. The new license will enable Neo to offer multicurrency business accounts, allowing companies to pay, store, and receive 25 different currencies. Among those are exotic currencies such as CNY, SAR, MXN, and TRY. Neo reports that it will add 15 currencies to the list soon.

The new banking license converts Neo’s website into a gateway of business-focused services. In addition to Neo’s flagship FX hedging solutions and the new multicurrency payments and collections tools, users have access to treasury management tools that allow clients to reduce costs and digitize their treasury department. Porting their treasury management tools to a digital environment allows businesses to automate tasks and reduce the human errors that result from manual input.

Neo has also made other recent developments, as well. The company has added new liquidity providers in its liquidity pool to offer users better prices. It also started offering hedging maturities up to 24 months and began offering currency deposits for clients holding USD, GBP, and PLN. Additionally, Neo landed a partnership with BPIFrance to build an FX offering for exporters.

Neo has raised $5.4 million since it was founded in 2016. The company’s founders include Emmanuel Anton, Ian Yates, Laurent Descout, and Nuria Molet.

Conversational AI Innovator Clinc Inks Partnership with Visa

Financial institutions leveraging Visa APIs can now enable voice-first digital banking technology from Clinc. Courtesy of a newly-announced partnership between Visa and the conversational AI innovator, customers of participating banks and credit unions will be able conduct a wide variety of banking operations by communicating directly with their bank accounts using natural, conversational language. No special keywords, phrases, or scripted questions.

“Our goal has always remained the same – to create technology that makes people’s lives easier,” Clinc co-founder and interim co-CEO Lingjia Tang explained. “Partnering with a leader like Visa is a milestone for Clinc, and this API integration is going to offer small and mid-size banks a similar experience that some of the largest banks in the world are using.”

The collaboration will allow digital banking customers to check balances, transactions, and spending history; pay bills and transfer money; as well as perform financial management functions such as creating payment plans, checking rewards programs, and disputing transactions. Customers will also be able to conduct a wide variety of card management operations ranging from turning cards on and off, reporting and reissuing lost or stolen cards, and activating new cards – all using their natural voice in a conversational way.

“This is the kind of capability and cutting-edge AI wouldn’t be otherwise be accessible without Visa, ” Tang added.

Clinc’s partnership with Visa is the latest example of how the Ann Arbor, Michigan-based company is helping banks enhance the customer experience. Founded in 2015 and making its Best of Show-winning Finovate debut a year later at FinovateFall, Clinc teamed up with Singapore’s OCBC Bank last year, helping the bank launch its voice-enabled mobile banking assistant. The company has also partnered with Turkish bank Isbank, powering one of the most widely-deployed mobile banking voice assistants, with more than six million users.

Clinc has raised $60 million in funding. The company picked up the lion’s share of that amount last spring in a $52 million Series B round.

Are U.S. Banks Leaning Toward “Closed Banking?”

Odds are, if you work in fintech, you know what open banking is. It is such a popular concept that in Europe an entire regulatory regime, PSD2, has sprung up around the concept.

So if Europe is progressive enough to create regulations mandating open banking, how is the U.S. doing? It turns out that some banks in the U.S. are taking an opposite approach and preventing third parties from accessing consumer data.

Keeping it secure

The motive behind this move is pure: banks are closing down connections to third party apps to keep customer information secure and limit data breaches. Data retrieval methods such as screen scraping or using the customer’s password to gain access are indeed unsafe. We spoke with Chief Growth Officer and Co-founder of Flybits, Gerti Dervishi, who said this type of data sharing is “risky in so many different ways” since data scraping is not a standard protocol. Regarding recent decisions of U.S.-based banks who are gating off third parties, Dervishi said, “Honestly, this couldn’t go on for much longer.”

First-movers

JP Morgan Chase recently came up with a new access plan for third party fintechs that require access to customer data. The aim of this new plan is to stop third parties from using password-based access to retrieve customer banking data. Starting July 30, fintechs will be barred from pulling customer information until they sign data access agreements and stop using customer passwords to retrieve banking information. Instead, JPM wants third parties to connect to consumers’ accounts via its open API. The bank made it clear that not only is this method more secure, it will also place consumers in control of what data they want other applications to access.

PNC Financial is also cracking down on third party data access, but is leaving third parties with fewer options. Explaining the decision to the Wall Street Journal, PNC Chief Customer Officer Karen Larrimer said, “When aggregators access account numbers, many store them indefinitely, often unbeknownst to customers. This puts customers and their money at risk. We want to make sure we know who is setting up the account.”

As part of the move, Pittsburgh-based PNC is preventing customers from using P2P money transfer app Venmo and has blocked “multiple different aggregators,” including Plaid, which PNC states circumvented its security protocol. Plaid, a popular data transfer network, connects consumer information to other third party apps such as Square’s Cash app, Robinhood, and Digit.

Who owns the data?

But shouldn’t the consumer be able to decide if they want a third party to use their data? This became a major issue when PNC began directing users from PayPal’s P2P payment app Venmo to Zelle, the bank’s in-house P2P money transfer tool. This is because, as Dervishi said, “There is already an agreement in place with Zelle. [PNC] understands data sharing with Zelle, but they don’t have a standardized agreement with Plaid.”

When it comes to the issue of data ownership, Dervishi circled back to the need for standardization. Because PNC does not have a clear agreement in place with third parties, there is nothing to hold them accountable when it comes to how they use or store customer data. “We need a NAFTA for data,” he said.

So though it may seem as if both of these U.S. players are taking a “closed banking” approach, that statement isn’t exactly correct. Both banks offer open APIs. The difference is that PNC has shut out Plaid (and, in turn, the many third party apps that use Plaid) to head off security issues. JPM (and potentially others) may not be far behind. As Ron Shevlin pointed out in his piece The Real Story Behind the PNC Venmo Clash, “[JPM will] be watching what happens with PNC, for sure. If PNC sees limited account attrition, other Zelle banks will be likely to follow.”

At the end of the day, the only thing to prevent banks in the U.S. from taking a “closed banking” approach may be to follow in the footsteps of the European Union and create a PSD2-like, standardized regulation for data sharing. “Because each bank takes a different approach to third party data access,” Dervishi said, “until we have a well-understood framework like open banking and PSD2, we will have a thousand different methods [to access data].”

Wirecard and Xolo Partner to Serve the Gig Economy

Digital financial services company Wirecard is partnering with Xolo (formerly LeapIN) this week to offer a more robust set of banking services for gig economy entrepreneurs.

Under the agreement, Xolo, a platform that helps entrepreneurs launch and run micro-businesses, will bolster the banking and accounting tools on its existing platform. The company will leverage Wirecard’s banking license to allow its 30,000 users to open a business bank account online within 48 hours, receive a debit card, and monitor their banking, tax, and compliance activity.

The move targets gig economy workers, an underserved segment of the population that is growing at 17% per year with an estimated value of $204 billion in 2018.

“This new partnership marks a significant step for Xolo as we strive to establish a new virtual nation for freelancers and solopreneurs,” said Allan Martinson, Xolo CEO. “With the addition of Wirecard’s pioneering digital banking solution, we will continue to build out our vision for enabling millions of micro-businesses to get to market quicker and without the bureaucracy.”

Xolo’s news follows a recent announcement last month from U.K.-based Wollit, which raised funding for its platform that helps gig economy workers smooth out their fluctuating cashflow. There is a significant lack of services for this consumer segment across the globe, but startups and challenger banks have been slowly filling the gaps that banks have left open.

PayPal Takes to the Google Cloud

Google Cloud has unveiled its latest data center and announced that PayPal will be among the first to move key components of its payments infrastructure to Google’s cloud region. The news is the latest example of a partnership between the two technology giants that extends back at least as far as 2017, when PayPal became an authorized payment method for Android Pay (which later became Google Pay).

The new cloud region, Google’s 22nd globally, will be based in Salt Lake City and is designed to provide customers in the western U.S. with better, more reliable cloud services.

“When it comes to processing a financial transaction, security and speed count,” PayPal VP for Employee Technology & Experiences and Data Centers Dan Torunian said. He added that Google Cloud will provide PayPal with the “security, quality, and velocity” it needs, particularly when it comes to managing seasonal payment transaction volume surges and keeping regional expansion costs low.

In fact, PayPal reportedly chose Salt Lake City in part for low-latency access to its own data center, which will make it easier for PayPal to commit additional resources to the cloud over time. The partnership will also allow PayPal to establish a migration pattern that can be used to convert more on-premises infrastructure to the Google Cloud – at the Salt Lake City data center or to any other Google Cloud platform region.

More than 300 million consumers and merchants in 200 markets use PayPal’s payments technology for financial services and commerce. The San Jose, California-headquartered company began the year forging a strategic partnership with UnionPay International that will boost its merchant and consumer business in the Chinese market. PayPal reported adding more than 37 million net new active accounts last year, processing “nearly $200 billion” in total payment volume in the fourth quarter alone.

Helping Secure Digital Identities; Managing Financial Crime Risk

Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.

“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”

Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.

Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.

Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.

“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.

ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.


Here is a round up of recent news from our Finovate alumni.

  • Sezzle unveils new logo along with its first annual report.
  • Flybits expands its executive team in New York, Toronto, the U.K., and Dubai.
  • ID R&D updates voice biometric solution IDVoice.
  • M1 Finance surpasses $1 billion in assets on its platform.
  • Armor Bank selects Teslar Software’s automated workflow and portfolio management tools.
  • Mastercard partners with myPOS to boost adoption of card payment solutions among European SMEs.
  • Black Hills FCU selects nCino’s Bank Operating System.
  • Bazaarvoice launches partnership program with Yotpo as the piloting partner.
  • Keysafe inks partnership with Salt Edge to access tenants’ bank data without the need to acquire its own PSD2 license.
  • Lending Club appoints Annie Armstrong as Chief Risk Officer.
  • Assaray Trade and Investment Bank selects Temenos Infinity and Transact to power its digital transformation.
  • Long John Silver’s chooses Blackhawk Network for gift card program.
  • Trustly and Fly Norwegian team up to let travelers pay directly from their bank accounts.
  • Pindrop launches Deep Voice 3, the new version of its voice recognition technology.
  • Mastercard CEO Ajay Banga steps down, replaced by Chief Product Officer Michael Miebach.
  • Venmo to launch debit card for teens.
  • Almost 600 banks select Fiserv’s Turnkey Service for Zelle.
  • Finastra to offer ClickSWITCH’s account switching technolkogy to its clients.
  • Simmons Bank partners with Jack Henry to leverage its Banno platform to build a digital presence.
  • Currencycloud and Currensea team up.
  • Yseop and Automation Anywhere join forces to scale intelligent automation.
  • Lighter Capital appoints Kevin Fink at CTO and Patricia Elliott as CSO.
  • InComm launches Roblox gift cards in France and Germany.

Finovate Alum Features and Profiles

Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.

Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.

Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.

Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?

Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.

Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.

SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.

SheerID Expands Identity Marketing Platform

Customer segmentation identification company SheerID launched its Employment Verification tool today in 191 countries. The move enables brands to identify and acquire new customers across the globe.

SheerID’s segmentation tool enables companies to identify consumer subsets such as military members, students, and teachers to help personalize communications and increase customer acquisition via gated, personalized offers for different employee groups. Today’s geographical expansion of SheerID’s technology will help brands build their acquisition efforts on a global scale.

Along with employment verification, SheerID has updated its age range verification tool, which is available in 23 countries. With this offering, brands can more efficiently target consumer groups such as seniors and young adults.

“With this latest expansion of verification types, we’re making it easy for brands to extend their identity marketing campaigns beyond the U.S. and personalize offers in new ways, to new potential customers,” said Jake Weatherly, SheerID CEO. “The opportunity to use personalized offers to acquire consumer tribes is endless, and this latest expansion is yet another step forward in meeting customer demand.”

SheerID leverages 9,000 data sources and 1.3 billion identity attributes. Among the company’s clients are Amazon, Lowe’s, Spotify, and T-Mobile. SheerID, which recently showcased at FinovateSpring 2019, has raised $96 million since it was founded in 2011.

Russia Gets a New Tech Billionaire as U.K. Fintechs Get Funded

Russia has a new tech billionaire. The $500 million raised by financial platform Revolut this week not only establishes the U.K.-based business as the country’s most valuable fintech. It also makes its founder and CEO, Moscow-born Nikolay Storonsky, the latest fintech billionaire to come from the Russian Republic.

The investment was led by Technology Crossover Ventures – a U.S. firm – and takes Revolut’s total capital to $836 million. Revolut now sports a valuation of $5.5 billion.

Storonsky’s net worth figure – on paper, at least – is based on a Forbes report from last February in which he noted that his stake in Revolut was being diluted to 30%.

As part of this big week for U.K. fintechs, SME lender iwoca picked up $109 million funding and expansion into Germany. B-Social, a social payments app based in London, raised $10 million ahead of its transformation into a fully-licensed challenger bank later this year. And Azimo partnered with fellow Finovate alum Ripple to facilitate cross-border payments to the Philippines.

This week on Finovate.com, we featured a profile of Innovate Israel founder and CEO Itai Green and his thoughts on open innovation and collaboration between corporates and startups. We also highlighted Finovate newcomer Sonect, a Swiss company that demonstrated its Best of Show winning virtual cash network at FinovateEurope earlier this month.


Here is our weekly look at fintech around the world.

Central and Southern Asia

  • Indian fintech PhoneParLoan announces new investment from accelerator MOX. The amount of the funding was not disclosed.
  • Bengaluru-based digital billpay company XPay Life goes live in India.
  • Envestnet | Yodlee acquires Indian data aggregator FinBit.io.

Latin America and the Caribbean

  • AlphaCredit, a Mexico City-based fintech, raises $125 million in round led by the SoftBank Innovation Fund.
  • Mexico issues its first license – to NVIO Pagos Mexico – under its new fintech law.
  • U.S. Bancorp’s merchant acquirer subsidiary, Elavon, sells its Mexican operations to banking group Santander.

Asia-Pacific

  • Azimo taps Ripple for cross-border payments to the Philippines.
  • Philippines-based Tonik Financial raises $6 million ahead of the launch of its new digital offering.
  • Malaysia’s biggest telecom, Axiata Group, is the latest company in the country to announce plans to pursue a digital banking license.

Sub-Saharan Africa

  • South Africa’s Jumo raises $55 million in combined debt and equity funding.
  • Nigeria’s The Nation looks at how fintech empowers startups.
  • Kenyan B2B e-commerce platform Sokowatch locks in $14 million Series A funding.

Central and Eastern Europe

  • Mastercard expands its partnership with Rakuten Viber to bring P2P payments to Romania.
  • A new $500 million funding round for Revolut makes the company’s founder and CEO Nikolay Storonsky Russia’s latest tech billionaire.
  • Apple Pay goes live in Slovakia and the Czech Republic.

Middle East and Northern Africa

  • Kashat, an Egyptian mobile app that offers short-term loans of up to $95 to the underbanked, goes live in Cairo and Alexandria.
  • Jordanian SME lending marketplace Liwwa raises $5 million in growth funding.
  • A new agreement between Tencent Holdings and Network International will expand WeChat Pay’s presence in the UAE.

Top image designed by Freepik

iwoca Locks in $109 Million in Debt Financing to Help Fund German SMEs

Photo by anna-m. w. from Pexels

With more than $1.1 billion (€1 billion) provided to small businesses in the U.K. and Germany, London-based SME lender iwoca announced today that it has received $109 million (€100 million) in debt financing from Insight Investment. The new capital will help iwoca continue its work in funding entrepreneurs in Germany.

The investment takes iwoca’s total debt and equity financing to more than $550 million (€500 million). The company, one of the largest fintech SME lenders in Germany, plans to double its workforce in the country to 100 employees and will use the funds to help scale its loan book to give institutional investors more opportunities to participate in the SME credit market.

“More than 90% of companies in Germany are small businesses, yet many of them suffer from poor access to finance as traditional lenders can’t support them the way they need it,” iwoca CEO and co-founder Christoph Rieche explained.

“Our mission is to change that. With Insight Investment we have found a very agile and responsive partner that complements our mission-driven way of working. They provide the perfect basis for us to enter a new phase of growth in Germany,” Rieche said.

Iwoca has gained more than 50,000 customers since offering its first loan in 2012, and lent more than $1.1 billion (€1 billion) to U.K. and German-based businesses. The company offers short-term financing of up to £200,000, and only charges interest – starting at 2% a month – for the days the borrower actually has the money. Iwoca also makes it easy for companies to apply for a top up in the event that additional financing is required, enabling their credit to grow along with their businesses.

The company partnered with German business banking platform Penta late last year, enabling the challenger bank to launch its credit solution. We took a look at challenger banks in Germany as part of our FinovateEurope coverage this month. Last summer iwoca launched a pair of real-time loan integrations with U.K.-based financial marketplaces Funding Xchange and Funding Options.

Among the first fintechs in the U.K. to leverage open banking to offer a lending API, iwoca has been named to the Deliotte Fast 50 and was recognized by cloud accounting platform – and Finovate alum – Xero as its Financial Services App of the Year in 2018 and its Emerging App Partner of the Year in 2017.

Lendio Lands $55 Million to Match Small Businesses with Lenders

Online marketplace for small business loans Lendio landed $55 million in combined debt and equity funding today. The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.

The equity portion of the Series E round was led by Mercato Partners’ Traverse Fund, which contributed $31 million, and included contributions from existing investors Napier Park Financial Partners, Comcast Ventures, Blumberg Capital, Stereo Capital, and Runa Capital. Signature Bank led the debt facility with $24 million.

Founded in 2011, Lendio serves as a matchmaker that connects small businesses seeking funding with its network of over 75 lenders. Since Lendio launched at FinovateSpring in 2011, the Utah-based company has funded more than 100,000 loans totaling $2 billion. Over the past two years, Lendio has seen an average year-over-year growth rate of 75%.

CEO Brock Blake called today’s investment a “significant milestone” for the company. “With these funds, we are strongly positioned to grow our existing platform as a trusted loan facilitator that supports both lenders and borrowers, while building out a range of new integrated lending services that get the right loans into the right hands at the right time.”

Lendio will use today’s investment to increase the scope and precision of its flagship loan marketplace; expand lender services functions, which provide lenders access to a white-labeled online loan application; and enhance its small business bookkeeping platform, Sunrise by Lendio. The company launched Sunrise last year after acquiring online bookkeeping startup Billy. The new service aims to help Lendio’s small business clients manage their cash flow and monitor their overall financial health.

“Lendio’s ability to combine data analytics with the human touch to connect small businesses quickly and precisely with ideal lending partners has made all the difference in its success,” said Ryan Sanders, senior investor at Mercato Partners Traverse Fund. “Lendio uniquely solves the problem of inefficient capital for small businesses by bridging lenders and borrowers. They are able to connect both sides and facilitate loans faster and more effectively between small business owners and lending institutions. Lendio’s impressive growth is a result of its technology-backed personalized service which has created a loyal and growing following in the industry.”

Commitment, FOMO, and Capital: How Smart Corporates Make Partnerships Work

Photo by Haley Black from Pexels

With one startup for every 1,400 citizens, Israel may have the highest “innovation per capita” ratio of any country on Earth.

That makes it little surprise that Itai Green, founder and CEO of Innovate Israel, would be the one to help explain what corporates need to do in order to make the most out of their collaborations with startups at FinovateEurope in Berlin last month.

Green advocates an innovation model – open innovation – in which corporates leverage their local ecosystems to collaborate and partner with startups, entrepreneurs, universities – even customers and other corporates – in order to develop whatever products or services will allow it to grow and expand. This argues against the in-house innovation model, which many have found to be an insufficient way of driving major innovation due to factors ranging from a lack of internal incentives to inconsistent and/or unclear support from management.

Green made the case to our audience that open innovation provides the lowest risk and the greatest return on investment a company can ask for – if they do it right.

In his presentation at FinovateEurope this month, Green outlined the most important factors that businesses need to keep in mind when working with innovative companies in an open innovation context. He listed nine distinct “Tips for Corporates” – a few of the more compelling ones are highlighted below.

Commitment – A theme that was quite common at FinovateEurope in Berlin this year – that bringing tech-savvy diversity to a financial institution’s board of directors was a must – was echoed strongly by Green. He advocated that companies have at least one technology/innovation-oriented board member – though having three, he noted, was far better. Green said that this kind of board representation was increasingly common in Israel where he pointed out that boards of directors typically had 20% of their members under the age of 40. Compare this to the S&P 500, where the age of the average board member is above 60.

FOMO > NIH – Even among companies that have recognized the importance of digital transformation, there can be a reluctance by corporates to embrace non-native ideas. This “Not Invented Here” attitude can be especially harmful when working with innovative startups, who often arrive on the scene with a passion to, if not disrupt, then certainly make a clear difference for their partner and a strong representation of their technology.

Green argues that a “Fear of Missing Out” on the next big opportunity is a more healthy psychology for the corporate when working with a startup rather than any sense of injured pride at not having come up with the innovation on their own.

Show Startups the Money – Another highlight on Green’s list was the importance of paying for the work. This was a point that Steve Frook of Best of Show winner Horizn would underscore in his FinovateEurope presentation, Landing Your First Bank Customer, later that day. From Frook’s perspective, it was important that startups avoid the temptation to, essentially, work for free in an attempt to show their enthusiasm and eagerness to collaborate. Establishing a business relationship – even a modest one – was an important early step for startups to take, Frook suggested. Green, from the perspective of advising the corporate, concurred. Companies should come to collaborations with startups with a budget and be prepared to use it. Paying startups, Green explained, sends a positive, professional signal to the company and to the broader community of innovators and entrepreneurs, as well.


Founded in 2017, Innovate Israel helps partner global corporations with innovative entrepreneurs and startups in Israel to help them implement advanced technologies in their businesses.