Building a Financial Advisor for Main Street America

We recently chatted with SuperMoney Founder and CEO Miron Lulic to give us an update on the company’s platform that helps consumers reach their financial goals.

Miron, who strives on “creating something from nothing,” founded SuperMoney in 2013. The California-based company has raised $1 million and topped $2 billion in loan requests on its platform last August.

SuperMoney’s mission is to help Americans reach their financial goals. Tell us a bit about how you do that.

Miron Lulic: SuperMoney offers the most comprehensive, transparent and objective resource to compare financial services. There are a lot of personal finance blogs that write articles for whatever service is offering the best payout. SuperMoney is built as a platform to help find any financial product or service. The content found on our product profiles are dynamically generated based on stored data attributes. We are better than anyone at giving people the facts. Our community members provide a qualitative dimension about their experiences by indicating whether they would recommend or not recommend a service. These two dimensions combined help people make better financial decisions.

Furthermore we’ve made it easy for people to get competing personal loan, auto loan, auto refinance, and student loan refinance offers through our loan offer engine. We’re tightly integrated with all the leading online lenders so that consumers can submit a single application and get real loan offers back in real time.

Lastly, we provide a lot of financial education content that is financial goal focused. We are diligently working on expanding our ability to give people actionable advice that goes beyond basic content.

SuperMoney helps users with a handful of financial goals– from buying a house to getting out of debt. Which of these goals is most popular among your user base?

Lulic: Getting out of debt is the most common goal among our users. Our platform helps consumers find the best financial strategies for their unique circumstances. In some cases, that means refinancing credit card debt with a debt consolidation loan. For others, it might mean talking to a credit counselor.

We like to refer to ourselves as the “Financial Advisor for Main Street America.” Most Americans are not looking for help with tax loss harvesting strategies. They are looking to get out of debt, establish savings, and eventually buy a home. We are building the tools to help tackle these basic goals.

What is SuperMoney’s business model? How do you make money?

Lulic: We sometimes, (but not always), receive compensation when we refer users to financial service providers found on our website. This is similar to the model sites like Nerdwallet and Credit Karma use. The difference is that our unified platform provides the tools to compare a wide selection of financial services in an objective way, not just the ones that provide us with compensation.

In 2018, SuperMoney launched a product to help small businesses offer POS financing options to their clients. Do you plan to extend this further, for example, to larger businesses or to online retailers?

Lulic: Yes, we are in the final stages of launching an exciting new service that will open our financing platform up to a broader set of partners. We hope this will help millions of new users make smarter and more informed choices.

What’s next in the innovation pipeline for SuperMoney?

Lulic: We feel there is a huge opportunity to leverage artificial intelligence in the financial advice and planning arena. This is already happening in the investment sector with roboadvisors and AI-powered analysis. Yet, we have hardly scratched the surface when it comes to personal financial planning for everyday consumers. Our goal is to simplify the experience and provide smarter suggestions to users who are looking for basic financial advice.

How Accusoft’s FormSuite for Invoices Puts Machine Learning and RPA to Work

How Accusoft’s FormSuite for Invoices Puts Machine Learning and RPA to Work

This is a sponsored post by Accusoft. For more information on sponsored contributions please email sponsor@finovate.com.

Machine Learning continues to dominate conversations across the fintech ecosystem, but one aspect that rarely gets into the limelight is where the data to train the algorithms actually comes from.

Finovate sat down with Tracy Schlabach, Senior Manager, Product and Customer Marketing at Accusoft to discuss the company’s latest technology, the data challenges they overcame, and why having a symbiotic relationship with their clients drives their strategy.

Finovate: Give us an overview of what FormSuite for Invoices does.

Tracy Schlabach: FormSuite for Invoices is a toolkit for developers that are building invoice processing software solutions. FormSuite for Invoices does the heavy lifting of invoice processing, solving the hard part of finding and extracting data, such as invoice number, purchase order number, total due, line item quantity, line item description, and other data. It is configurable by the developer to extract the data specific to their needs.

Finovate: What are the technical differences between FormSuite for Structured Forms and FormSuite for Invoices?

Schlabach: FormSuite for Structured Forms deals with fixed forms, where the location of the information doesn’t move, such as a tax form, while FormSuite for Invoices deals with what we call semi-structured forms since the locations of certain values might move around the page based on the data.

For example, the “Total Due” field would move down in an invoice that has more line items. While FormSuite for Structured Forms does use AI to identify which form was passed in and to extract the data, the AI is more limited than what is required to process more dynamic content such as invoices.

FormSuite for Invoices uses some of the latest machine learning (ML) to be able to extract data from the line item tables found in invoices. This type of ML is what you hear about most often these days; deep learning with supervised and unsupervised training of a custom ResNet convolutional neural network. This technology “learns” from the changes that users make to the output results. For example, if the Total Due information on ABC Company’s invoice is located in a different quadrant on the document, the user will correct the output information. The ML technology in FormSuite for Invoices learns from these corrections, ultimately increasing confidence values.

A lot of our customers are dealing with both types of forms, structured and semi-structured, so we see people using these toolkits in combination to solve their overall forms processing challenges.

Finovate: What role does Robotic Processing Automation (RPA) play in FormSuite for Invoices?

Schlabach: Both FormSuite for Invoices and FormSuite for Structured forms have been used to serve as a data input source for RPA. When companies are using RPA to automate data entry on legacy systems, that data has to come from somewhere. Before RPA, a data entry person might key data from a piece of paper or from a computer screen into another screen that has the legacy application running on it. RPA performs the typing in place of that person, but now that data has to come from somewhere. If the data isn’t digital, for example, it is on a piece of paper, that paper can be scanned and the data extracted with one of our FormSuite products allowing the RPA robot to type that data into the legacy application.

Document capture and RPA make great partners in this way, automating what was previously a tedious and time-consuming job. Having that data available in systems quicker allows people to have quicker access to the data and make decisions faster. And the people doing the data entry are freed up to do more valuable work.

Finovate: What was the biggest challenge your team had to overcome in launching FormSuite for Invoices?

Schlabach: Line item tables are particularly challenging on multiple fronts. Their format varies a lot. Some have graphic lines surrounding each cell, but some are what we call white space tables which just use spacing to align the rows and columns. All the variation makes it really hard.

In addition, in order to use any ML, you have to have a lot of data to train with. We tried to solve the table detection and recognition using data from the leading research papers in this space, those that were winners of various ML competitions. But, we found they always fell short in some subset of our test data. 

Eventually, after working with various algorithms, one of our Principle Engineers identified a way to make a significant improvement in the ML algorithm, and the results are quite impressive. To solve the data challenge, we used a number of unique ideas to source the invoice images and used raw manpower (internal crowdsourcing) to create the “ground truth,” the correct values that are used in training and testing the machine learning.

It was an impressive effort that had the entire Accusoft organization contributing to our training data. We even had our CEO helping with the data creation at one point.

Finovate: Aside from the obvious benefit of saving time on data entry, what other benefits does FormSuite for Invoices bring to an organization?

Schlabach: There are several benefits. With Accusoft specializing in solutions for content processing, conversion, and automation solutions since 1991, developers can focus on their core strengths and let Accusoft handle the heavy lifting of content capture. As a toolkit, FormSuite for Invoices helps developers solve the most challenging aspect of the invoice process: data extraction. By embedding FormSuite for Invoices, developers significantly shorten their product’s time to market.

On the end-user side, automating invoice processing has been shown to contribute many benefits. The data entry, as mentioned, is the obvious benefit. However, companies also see dollar savings by paying invoices sooner and recognizing early payment discounts. In addition, with the speed of business today, having visibility to data is important. Invoice processing automation helps companies see a more accurate picture of their cash flow much quicker.

Finovate: So, what do you see as the next evolution of this technology?

Schlabach: As customers provide feedback, sometimes in the form of challenging images, we make improvements to the technology. That is the symbiotic value we have seen in many of our partnerships for document capture products. When partners report challenging images, we incorporate improvements into our products to better handle those images. We see this in our forms processing solutions, our barcode recognition product, our OCR and PDF products, and our viewer. We continually evolve our products, and as the exposure to documents in the wild increases, our products improve. 

We also see this technology expanding into other semi-structured forms use cases. Credit card statement processing, bills of lading, and purchase orders are just a few of the documents that could be processed using this technology. There are some different challenges in those types of documents, but there are also a lot of similarities to invoices that we can take advantage of.

U.S. Neobank Upgrade Launches Contactless Card

When Upgrade set out to create a new banking experience in 2017, there’s no way the company could have envisioned what 2020 would bring. Now, with social distancing measures in place across the globe, Upgrade’s launch of a contactless version of its credit card is just what the doctor ordered.

Furthermore, the California-based company is making the card available in digital form, supporting Apple Pay and Google Pay mobile wallets.

Upgrade first launched its card last year and has since made $500 million in new credit available to consumers every year. The company differentiates its card, which is issued by Sutton Bank, from traditional credit cards by combining monthly charges into installment plans that the borrower repays over 24 to 60 months. Upgrade structures the repayment this way to get its users into the habit of paying down their balance every month and avoid getting trapped in a continuous cycle of debt.

Further protecting consumers is the contactless element of Upgrade’s new card. “These new Upgrade Card features enable payments without any surface contact,” said Upgrade co-founder and CEO Renaud Laplanche. “While more customers have been shopping online since the start of the COVID-19 pandemic, many are still using their card in stores. We want to do what we can to keep our customers safe and give them a smarter way to pay.”

The Visa-branded Upgrade cards offer users credit lines from $500 to $20,000 and boast no fees.

Upgrade also offers personal loans for debt consolidation, credit card refinancing, home improvement, and major purchases. In partnership with Cross River Bank of New Jersey, which issues the funds, Upgrade has originated $2.5 billion in loans and cards since inception.

Upgrade is headquartered in San Francisco, California, with an operations center in Phoenix, Arizona, and technology centers in Chicago, Illinois, and Montreal, Canada. The company has raised $122 million.

3 Ways to Avoid Occupy Wall Street 2.0

In a COVID-19 world, the rich may not necessarily be getting richer, but it has become clear that the virus is taking a toll on lower income populations. And with this, the global pandemic is shining a light on income disparity.

Do you remember the last movement to highlight income inequality?Occupy Wall Street. The movement started in September 2011 as groups assembled at major financial districts and banks to make their voices heard about income distribution, bank reform, student loan forgiveness, and capitalism in general. Nearly 200 protestors camped out in Zuccotti Park in New York’s financial district, ultimately costing the city $17 million.

So with the income inequality fresh on consumers’ minds, here are a few ideas on how banks and fintechs can be their ally instead of their perceived enemy.

Be flexible

While you don’t need to bend over backwards, offering some flexibility is key. And even though offering flexibility on payment plans can be essential, it’s not all consumers are looking for. Your call center, for example, is likely overloaded right now. Instead of having callers wait on hold, can you direct them to a chatbot or make an option for them to request a call back from an agent at a certain time?

Straying from traditional operations and bending some rules (in a compliant manner, of course!) can make a huge difference to a stressed-out consumer that is just looking for someone to understand their situation.

Be generous

You don’t have to forgive a customer’s mortgage payment for them to like you. Peer-to-peer payment company Venmo is doing a great job at engaging with its customers during this time. The company is depositing $20 into consumers’ accounts in exchange for their generosity toward healthcare workers or others in need.

Select an idea that works for your organization’s image. You can give away gift cards to Netflix or offer free gift cards to local restaurants for take away meals. The giveaways can be in under $10 and done at random or as a daily or weekly online drawing. For something more simple, you could host a larger cash giveaway with only one or two winners.

Show unity

Play a role in your community, even if it’s not an in-person effort. Advertise in the local paper that your staff is volunteering to drop off groceries for elderly citizens, display uplifting sayings to encourage passersby, or even place rolls of toilet paper on front steps of houses in nearby neighborhoods. If toilet paper isn’t your style, mail coloring sheets and simple art supplies to customers with small children. For smaller banks, publish the phone number of a representative who can help customers sort through financial issues.

Small actions can have big outcomes during a crisis like this. During a time when people are “looking for helpers” as Mr. Roger’s instructed, banks have a great opportunity to be the helpers in their community.

Sila, a Startup Founded by Shamir Karkal to Rethink ACH, Raises $7.7 Million

Blockchain-based payments company Sila announced today it has pulled in $7.7 million in Seed funding. The round was led by Madrona Venture Group and Oregon Venture Fund with contributions from Mucker Capital, 99 Tartans, Taavet Hinrikus, and Jerry Neumann.

Sila was co-founded in 2018 by Shamir Karkal, one of the entrepreneurs who co-founded Simple in 2009 and was responsible for integrating the challenger bank’s system into BBVA after it was acquired by the mega bank in 2014 for $117 million. Karkal now serves as Sila CEO.

The company will use today’s funds to accelerate growth, introduce new product features, and acquire more customers. As part of today’s deal, Madrona Venture’s Hope Cochran and Oregon Venture’s Rick Holt will join Sila’s board of directors.

The Portland, Oregon-based company has a single API that offers what it’s termed Infrastructure-as-a-Service. Overall, Sila helps companies authenticate consumers via a partnership with Alloy, connect with consumer bank accounts via a partnership with Plaid, and move money. All three of these capabilities come together to enable companies to create their own in-app, white-labeled digital wallet. Sila’s customers range from startups to established businesses working in finance, insurance, real estate, and blockchain.

To power the funds transfers, Sila is using SILA, its own ERC token that is pegged to the U.S. penny. Since the money is held in Evolve Bank and Trust, a traditional bank, all funds are FDIC insured.

“The global financial system is broken,” said Karkal. “(It) doesn’t serve consumers, small businesses, or the innovators trying to reach them. It is too expensive, inefficient, tightly regulated, and difficult to integrate into fintech applications.” Sila is addressing these challenges in multiple ways, one of which is its price point. The company’s pricing ranges from $0 per month plus fees for startups, to just under $10k per month plus fees for enterprises.

As for what’s next, Sila is currently working on adding support for card payments, business ID verification, and international payments. The company, however, has yet to disclose timing on these projects.

SoFi Inks Agreement to Acquire Galileo Financial Technologies

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In a cash and stock deal valued at $1.2 billion, online lender and personal finance innovator SoFi has agreed to acquire financial services API and payments platform, Galileo Financial Technologies.

Galileo enables companies to build innovative consumer and B2B fintech services via its suite of open APIs. The company’s technology powers a variety of functions including:

  • account set-up
  • funding
  • direct deposit
  • ACH transfer
  • IVR
  • early paycheck deposit
  • billpay
  • transaction notifications
  • check balance
  • point of sale authorizations

Galileo processed $53+ billion in annualized payment volume in March of this year, more than doubling its September 2019 tally of $26 billion. Notably, SoFi and Galileo are already quite familiar with each other; SoFi’s Sofi Money solution is currently integrated with Galileo’s payments platform and leverages a number of the platform’s account and events functionalities.

Together, the two companies will further combine their efforts to create value for customers of both firms, who will benefit from a feature set that enables them to participate in the transition from “physical-only to a multi-channel digital and physical platform.”

“SoFi has established itself as a leader in the fintech sector, providing our more than one million members a full array of financial products to help them get their money right,” SoFi CEO Anthony Noto said. He credited SoFi’s members for motivating the company to continue innovating, and for encouraging “bigger, bolder, and more expansive” thinking. “Together with Galileo, we will partner to build on our companies’ strengths to drive even greater financial technology innovation, making those products and services available to both current and future partners.”

Galileo will operate as an independent subsidiary of SoFi, post-acquisition, with Galileo CEO Clay Wilkes remaining on board to continue leading the company. Praising SoFi’s suite of solutions for borrowing, saving, spending, and investing, Wilkes said, “these are products that many of our leading fintech clients are asking for. Distributing products through our enterprise class API is the vision behind this combination. I think it’s very powerful.”

SoFi made its Finovate debut in 2017, partnering with Quovo to present How Quovo and SoFi Perfected Bank Authentication at our developers conference, FinDEVr Silicon Valley. The company, based in San Francisco, California and founded in 2011, has raised $2.5 billion in funding, earning a valuation of $4.3 billion as of May of last year.

The Importance of Financial Literacy During Uncertain Economic Times

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What does it mean to be financially literate? Is it more important to be able to balance a checkbook or to understand the power of compound interest? Does a financially literate person pay down student debt or consumer debt first? And does a truly financially literate person even take on debt in the first place?

A growing number of fintechs – many of them Finovate alums you’ll meet below – have devised innovative ways to help young people in particular, become better earners, savers, spenders, and investors. The majority of these innovations leverage rewards and gamification to make the educational medicine go down easier. These strategies use everything from gift cards to actual cash to encourage users to successfully complete lessons on personal finance or watch videos on common sense money management.

As companies, these fintechs partner with financial institutions – community banks and credit unions in particular – to help make their financial literacy offerings available to their customers and members. In some instances, companies have successfully partnered with educational institutions which have used their solutions as part of their financial education curricula.

April is financial literacy month. And as the coronavirus-induced economic slowdown – and potential recession – has everyone reconsidering the stability of their financial circumstances, now seems like an especially good time to be reminded of the importance of a solid – contemporary – financial education.

As recently as last fall, Finovate audiences were ranking financial literacy among the top of fintech’s most important themes. Zogo Finance, a Durham, North Carolina-based fintech that made its Finovate debut at FinovateFall, took home a Best of Show award for its Teen Financial Literacy app. Zogo’s solution pays users cash rewards – in the form of gift cards from leading brands – for successfully completing lessons on topics such as budgeting, credit, and investing.

The platform’s more than 300 educational modules were designed by educators at Duke University and ensure that users meet national standards for financial literacy. Zogo has teamed up with more than 11 community banks and credit unions in 12 states since its inception in 2018. The company began this year announcing a new partnership with fellow Finovate alum Bankjoy.

EVERFI, a Washington, D.C.-based company founded ten years before Zogo Finance, is another recent Finovate alum that has made a commitment to promoting financial literacy. The company powers community-oriented financial education for more than 850 financial institutions and 3,500+ partners in all 50 states of the U.S., as well as in Canada and Puerto Rico.

EVERFI, which offers workplace training and other educational programs as well as financial literacy, demonstrated its Achieve solution at FinovateSpring last year. The financial wellness technology enables financial institutions to offer personalized financial education to customers, employees, as well as to small business and corporate banking clients. From savings for college to navigating the homebuying process, EVERFI’s Achieve platform offers financial education that is as relevant as it is comprehensive.

Last fall, EVERFI announced a partnership with Zelle parent Early Warning Services to provide free financial education coursework to more than 1,000 high schools and 50,000+ students. The company began this year working with the MassMutual Foundation and the Washington Wizards NBA team to host the FutureSmart Challenge – an interactive financial literacy event for middle school students. Named to Fast Company’s 2020 World’s Most Innovative Companies roster, EVERFI unveiled a new financial education website earlier this month dedicated specifically to the financial challenges of the coronavirus pandemic.

Plinqit is another platform that made its Finovate debut last year and combines being an actual savings app with financial literacy features. Developed by Ann Arbor, Michigan-based HT Mobile Apps (HTMA), Plinqit leverages its Build Skills feature to pay users for engaging with its educational content. Once users sync their Plinqit account with their bank or credit union checking account and set up as many as five savings goals, Plinqit will help the user set aside a pre-determined amount of money on a customized schedule. Users can earn Plinqit cashback rewards (of approximately 1%) by reaching savings goals, referring friends and family to Plinqit, or by viewing articles and videos on personal finance and financial wellness topics.

A partnership with Arkansas-based First Community Bank ($1.5 billion in assets) put Plinqit back in the fintech headlines at the beginning of the year. The 26-branch bank teamed up with Plinqit parent company HT Mobile Apps in order to provide HTMA’s savings and financial literacy solutions to its customers. More recently, HTMA brought its financial education solutions to ChoiceOne Bank and Marquette Savings Bank.

Provo, Utah-based Banzai is another fintech oriented around financial literacy that made a major splash in its FinovateFall debut in 2018. The company picked up a Best of Show award for a demonstration of its turn-key, Community Reinvestment Act-eligible solution to enable organizations to add personal finance-based educational content – including interactive online simulations – to their websites.

Partnerships with community banks and credit unions enable Banzai to offer its financial literacy solution free of charge. The company provides three tiered courses for youth – Junior, Teen, and Plus – to ensure that the information provided and real-world scenarios are age-relevant and appropriate. Banzai’s curriculum has been used by 60,000 teachers across the U.S. and can be accessed from desktops, tablets, and mobile devices, as well.

In launching a new financial education resource for adults last fall, Banzai Coach, the company made a significant addition to its financial literacy offerings. Banzai Coach provides adult users with financial advice and instruction on how to get out of debt, how to manage basic business finances, and how to maximize their tax-advantaged investments such as retirement accounts, health savings accounts (HSA), and flexible spending accounts (FSA).

“Kids in schools love knowing that their decisions in the game actually have an impact,” Banzai’s Bryce Peterson wrote on the company’s blog announcing the availability of Banzai Coach. “As adults, we have quite the opposite concern: just about every decision we make has some kind of impact we didn’t predict or control.”

Payroll Company Paylocity Acquires Video Platform Provider

HR and payroll software solutions provider Paylocity made an acquisition today that will bring the company into the COVID-19 era. The Chicago, Illinois-based company announced it has purchased video platform provider VidGrid for an undisclosed amount.

Paylocity made the purchase to reinforce its services with VidGrid’s peer-to-peer learning courses. The company expects that adding workplace video communication tools will boost employee collaboration, engagement, and retention.

“We believe video will play a critical role in transforming workplace communication,” said Paylocity CEO Steve Beauchamp.

Today’s acquisition stems from Paylocity’s previous partnership with VidGrid that powered Paylocity’s learning management system (LMS), a tool that enables clients to learn from interactive videos featuring subject matter experts. “As part of our product expansion, we introduced our Learning Management System and worked with VidGrid to provide learning opportunities that the modern workforce expects,” Beauchamp said. “VidGrid’s approach aligns with our culture of caring deeply for our clients and we couldn’t be more excited to welcome their talented and innovative team to Paylocity.”

The acquisition– Paylocity’s first– comes at a time when traditionally in-person consultations and services have been pushed to online channels in order to comply with social distancing requirements. Secure video communications channels have proven to be invaluable during the COVID-19 era. Many experts are predicting consumers’ habits to pursue services online instead of in-person to continue even after it is once again deemed safe to gather in person.

Founded in 1997, Paylocity has more than 3,300 employees, more than 60% of whom work remotely (this was, of course, before everyone was required to do so). The company has more than 20,000 clients and 2,200 partners. Paylocity is publicly traded on NASDAQ under the ticker PCTY with a market capitalization of $4.71 billion.

Kabbage Collaborates with Facebook to Back Retailers During the COVID Crisis

One of the most immediate impacts of the worldwide effort to combat the COVID-19 virus is social distancing. And however effective social distancing is in limiting the ability of the coronavirus to spread, it is equally effective in crushing the revenues of businesses large and small.

To help small businesses in the retail sector cope with this challenge, small business cash flow solution provider Kabbage has partnered with Facebook. Together, the two companies will help merchants continue to generate revenue at a time when their customers – for sound reasons based on public health – are largely staying away.

Via the partnership, small businesses can sign up on a new website sponsored by Kabbage: www.helpsmallbusiness.com. This will enable them to sell online gift certificates through Kabbage’s KabbagePayments portal and automatically list them on Facebook. These offers will be visible to Facebook users through their Facebook mobile app; Facebook users can then purchase gift certificates from the www.helpsmallbusinss.com website.

The integration makes it easy for small businesses to sell online gift certificates and place them where they are most likely to be seen by consumers increasingly resorting to online shopping in lieu of traveling to brick and mortar stores. It’s also a way for consumers to support their favorite retailers.

“Now with the powerful reach of Facebook, small business owners have greater opportunity to share gift certificate offers to the community that rely upon them,” Kabbage CEO Rob Frohwein said. “Small businesses are the most impacted in this crisis and this is one way Kabbage is applying its technology and resources to save them.”

The initiative with Facebook is only a small part of Kabbage’s participation in the effort to help SMEs survive the economic consequences of the coronavirus pandemic. The company is one of many helping facilitate relief funding to SMEs via the Small Business Administration’s Paycheck Protection Program (PPP). The PPP provides funding up to 2.5x average monthly payroll, and the SBA forgives the portion of the loan that is used for critical business operations such as payroll, rent, mortgage interest, or utilities if all employees are kept on staff. Kabbage reports that it has received more than 37,000 applications for the PPP, totaling more than $3.5 million.

“The smallest businesses in America are always the hardest hit, the most vulnerable, and the most in need when a crisis strikes, and together with our bank partner, we are working tirelessly to support them,” Frohwein said.

Founded in 2009 and headquartered in Atlanta, Georgia, Kabbage has been a Finovate alum since 2010 when the company debuted its Kabbage Loan at FinovateSpring.

Open Banking in the Same Language

What happens when third party fintechs try to access banking data on behalf of their consumers, but each way has a different way of doing so?

That’s exactly what’s happening in the U.S. right now, and it’s a major factor in preventing the country from adopting an open banking culture. In an era when consumers conduct their banking activities with multiple providers, open banking not only safeguards consumer data but also places them in control of how they want their data used and for how long.

Speaking different languages

The lack of a consistent approach is also the reason why customers of some U.S. banks have been locked out of third party applications such as Robinhood and Digit. While these customers were prevented from using their own banking data, banks had good reason to lock out the third party providers, citing security concerns. Our piece Are U.S. Banks Leaning Towards Closed Banking? covers the drama in more detail.

What’s needed is a standardized regulation for data sharing. Banks can’t trust third parties and what they may do with customer data. With new regulations such as CCPA and GDPR, banks are required to keep track of how their clients’ data is used. Once a third party possesses customer data, the bank can no longer guarantee it will be used and stored properly.

Aligning the approach

So how does the fintech industry get everyone on the same page when it comes to data sharing?

The Financial Data Exchange (FDX) was created to solve that very same problem. “FDX is member-driven and governed by majority vote and we’re united by a common mission and purpose: providing secure and convenient financial data sharing,” said FDX Managing Director Don Cardinal. “Our Working Groups are inclusive, transparent and benefit from our members’ decades of experience and professionalism.”

FDX is a non-profit organization that is creating what is essentially a playbook of data communications rules for banks and third party fintechs. FDX currently counts 102 organizations– only one third of which are banks– that vote on an agreed upon global standard for data sharing.

Keeping the end consumer in mind

Importantly, FDX not only helps its member organizations speak the same language, the alignment trickles down to benefit end consumers as well. That’s because FDX helps place consumers in control of their own data, allowing them to decide which organizations can use their data and for how long. Aiding in this transparency, some banks have created dashboards that allow customers to view and edit which apps have access to their data.

To promote more consumer awareness, FDX is working to create a certification stack that would indicate to consumers whether a bank, fintech, or organization is part of FDX. You can think of this similar to a bluetooth logo on a device that informs consumers that a product has undergone the Bluetooth Qualification Program.

So when can we expect mainstream adoption of FDX?

“While we cannot give an exact date, we know from similar innovations (online banking, billpay, mobile banking, EMV chip cards) that we are moving from the Innovator to the Early Adopter stage and that acceleration of adoption will accelerate once we pass the mid-market peak,” said Cardinal. “To date, our members have moved nearly 12 million U.S. consumers over to the FDX API.”

Chime is Making Up for the U.S. Government’s Slow Stimulus Payments

With many U.S. citizens out of work these days, some are struggling to put food on the table. Recognizing this need, the U.S. government has agreed to come to their aid by issuing $1,200 checks to every adult earning less than $75,000 per year and $500 per child. The actualization of this effort, however, has been slow. While some families haven’t been able to work in weeks, they will not receive their check for another two-to-three weeks.

Because of this lag time, U.S. challenger bank Chime is supporting its user base by helping select members access their stimulus money early. So far, the bank has provided a group of randomly selected 1,000 of its members that meet certain criteria to immediately receive an additional $1,200 in their account while they wait for the government’s funds to come through.

“…these randomly selected members will have access to spend an amount equaling their estimated government payment 2-3 weeks early and be able to use that money right away on everyday needs such as groceries and bill payments with their Chime card,” the company noted in its blog post announcement.

The California-based company is using SpotMe, Chime’s free overdraft protection service that allows eligible users to hold a negative balance of up to $100 while they wait for their next paycheck. Instead of charging interest on this microloan, however, Chime requests users to “pay it forward.” As stated on the company’s website, “When your SpotMe negative balance is repaid, we’ll give you the option to leave us an optional tip to pay it forward. Whether or not you tip won’t affect your SpotMe eligibility. SpotMe is a fee-free service, and friendly tips from our community help it stay that way!”

So who is funding all of this? Chime is leveraging its relationships with The Bancorp Bank and Stride Bank, as well as its investors (and specifically Mark Cuban), to forward the funds.

With a valuation of $5.8 billion as of December 2019, Chime has raised nearly $809 million. Last fall, rumors indicated that the company had 5 million customers and CNBC reported last December that Chime was adding 150,000 accounts each month.

Yapily Locks in $13 Million in New Funding

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Open banking platform for Fortune 500 companies like IBM, Yapily has picked up $13 million (€12 million) in Series A funding. The round was led by Lakestar and takes the company’s total capital to $18 million. Also participating in the funding were existing investors HV Holtzbrinck Ventures and LocalGlobe, as well as angel investors including TransferWise’s Taavet Hinrikus and Twilio’s Ott Kaukve.

This week’s funding comes a year after the company’s last capital infusion – a seed investment of $5.4 million. Yapily will use the new funds to help support adoption of open banking by institutions across Europe.

Based in London and founded in 2017 by former Goldman Sachs executive Stefano Vaccino, Yapily helps drive open banking adoption by connecting banks to fintechs and other financial services providers. The company notes that its recurring revenues have grown by more than 5x over the past six months. Yapily also has increased the size of its London office to 45 employees, and expanded into Italy, Ireland, and France.

“We believe open banking is a force for good. Using our API and infrastructure, we’re not only providing our partners with strong and powerful connectivity to boost their user experiences,” Vaccino said. “But we’re also giving their customers, whether they be customers or businesses, greater control of their finances, through the creation of products and services which can fuel greater financial management and accessibility.”

Vaccino added that this flexibility for institutions and developers was especially valuable “during this period of uncertainy.” This point was echoed by Lakestar partner Stephen Nundy who cited the COVID-19 outbreak in crediting Yapily’s technology as being “best placed” to support financial innovation that drives business growth “across the financial ecosystem.”

In addition to IBM, Yapily includes GoCardless and Intuit Quickbooks among its customers.