This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A holiday-shortened week begins with news of an acquisition, a new partnership, and a new solution to enhance lender-borrower communication. Be sure to check back all week long for updates on the latest headlines in fintech.
Back before regtech was cool, a Brooklyn, New York-based company called Alloy was introducing Finovate audiences and others to its technology that enables banks and other financial institutions to build fully-customizable APIs for customer identification and compliance. Even more, the company demonstrated how its graphical rules engine implements compliance rules in a way that actually optimizes conversions and coverage. Alloy’s technology empowers companies to choose which data sources are used and how they are applied. This lets companies decide how to customize and optimize this aspect of their own onboarding processes.
We first met Alloy in 2016, when the company demoed its technology at our developers conference, FinDEVr Silicon Valley. In the years since then, Alloy has grown into an end-to-end identity risk management platform with more than 600 banks, credit unions, and fintechs using its technology to manage fraud, credit, and compliance risks. The company has raised more than $207 million in funding according to Crunchbase. Glia most recently secured an investment of $52 million in follow-on Series C funding in September 2022 from Avenir, Lightspeed Venture Partners, and other investors.
Alloy was founded in 2015 by Tommy Nicholas (CEO), Laura Spiekerman (President), and Charles Hearn (CTO) who met while working at a payments startup. In their mission statement they note that, in the company’s early days, they faced skepticism from investors, but were heartened by client feedback, which they said was “overwhelmingly positive” and inspired the founding trio to forge ahead.
These days, more and more companies are getting the message. In the past few days, Alloy announced partnerships with commercial lending platform Numerated and embedded finance and payment solutions provider Sonovate.
Alloy’s strategic partnership with Numerated will enable the latter’s customers to conduct robust fraud checks seamlessly from within their own lending operations. The partnership will bring streamlined onboarding, enhanced fraud prevention, and a unified digital experience to Numerated’s platform. This will help Numerated’s customers capture deposits and offer competitive lending products to their SME and commercial borrowers.
“Fraud prevention and lending automation are crucial in today’s financial landscape,” Numerated CEO Dan O’Malley said. “By partnering with Alloy, we are ensuring that our platform not only meets but exceeds the expectations of financial institutions looking for secure, scalable lending solutions. This partnership allows us to deliver the best of both worlds — top-tier risk management combined with the efficiency and speed of automation.”
Founded in 2017 and headquartered in Boston, Massachusetts, Numerated leverages advanced data and AI to help companies automate their business lending operations — from application to closing. With 500,000+ businesses and 30,000+ lenders among its customers, Numerated processes $400 million in loan volume every hour and, since inception, has processed more than $50 billion in loans on its platform.
With Sonovate, Alloy’s identity risk technology will be deployed to help the company combat rising fraud trends in the U.K. as it seeks to scale its operations. In a statement announcing the partnership, the companies noted a report from UK Finance that underscored the challenge of more sophisticated, AI-powered tools that fraudsters are using against financial institutions. The report discovered that $1.5 billion (£1.17 billion) was lost to financial criminals in 2023 alone.
“With its network of data sources, Alloy gives us the power to protect our business and customers from financial crime and the flexibility to make adjustments as needed as our business scales,” Sonovate Global Head of Risk and Compliance Tom Wilson said. “We are excited for this next step in our global growth.”
U.K.-based Sonovate serves recruitment businesses, consultancies, and labor marketplaces with embedded finance and payment solutions for their workforces. Sonovate provides swift credit decisioning, same-day funding, credit insurance, collection services, and both timesheet and workflow automation. Founded in 2014, the company has funded nearly $8 billion in invoices, supporting 3,300 businesses and 50,000 workers in 44 countries.
In addition to its partnerships with fintechs, Alloy announced last month that it was working with Meridian Credit Union, to help Canada’s second largest credit union enhance its user experience and reduce fraud risk for its 380,000+ members. Also this year, Alloy published its 2024 State of Embedded Finance report which examines trends in embedded finance risk management and compliance.
Identity decisioning platform Alloy teamed up with SME data intelligence innovator Coris.
Courtesy of the partnership, Alloy customers will be able to access Coris’ Merchant Profiler and Corshield solutions directly from within the Alloy platform.
Alloy introduced itself to Finovate audiences at FinDEVr Silicon Valley in 2016.
Alloy, the identity decisioning platform, announced a new partnership with SMB data intelligence company Coris. Via the partnership, Alloy customers will be able to access Coris’ solutions to automate SMB onboarding, underwriting, and fraud prevention.
“We’re excited to partner with Coris on improving the SMB risk management process for builders of financial products,” Alloy GM of Partner Solutions Brian Bender said. “Having a wide array of data at their disposal is critical for banks and fintechs to manage identity risk across the customer lifecycle.”
Alloy’s 500+ customers will be able to access a pair of Coris’ solutions directly from within the Alloy platform: MerchantProfiler, Coris’ KYB and small business intelligence product; and Corshield, Coris’ SMB-specific fraud model. Merchant Profiler enables fintechs and software companies to onboard, underwrite, and monitor their SMB customers via GPT-4 powered SMB industry classification. The solution also provides automated analysis of SMB websites, third party consumer reviews, and more; as well as real-time KYB, including Secretary of State business verification, sanctions screening, and TIN matching. Merchant Profiler also offers adverse media insights to see if there is significant negative news or information about a business or its beneficial owners.
CorShield fights business impersonation fraud and first party fraud at the point of sign-up. The solution automatically triangulates known data on SMBs and cross-references applicant data against the known information. CorShield then generates a fraud score to assess the likelihood of fraud and shares the primary reasons for the fraud score with the user.
One firm using CorShield claimed that the solution helped them instantly approve 90% of business applications. The company also said that Coris’ SMB intelligence data has lowered the firm’s application review time by more than 75%.
Founded in 2022 and headquartered in Palo Alto, California, Coris has helped its business customers verify more than 150,000 SMBs and provided data on more than 330 million global SMBs. The company secured $3.7 million in funding earlier this year in a round co-led by Lux Capital and Exponent Founders Capital. Y Combinator, Blank Ventures, WePay Co-Founder Bill Clerico, and Mercury CEO and Co-Founder Immad Akhund also participated.
Alloy introduced itself to Finovate audiences at FinDEVr Silicon Valley in 2016. The company returned to the Finovate stage in 2022 to demo its open payment hub, CHUCK, and its gifting platform Social Money, launched in partnership with Prizeout. Earlier this year, Alloy announced a partnership with embedded finance platform Liberis. The partnership will enable Liberis to integrate automated compliance verifications from Alloy directly into the funding application process.
Headquartered in New York, Alloy was founded in 2002. The company has raised more than $207 million in funding, according to Crunchbase. Alloy includes Lightspeed Ventures, Avenir Growth Capital, and Canapi Ventures among its investors.
Embedded finance platform Liberis announced a partnership with identity risk management innovator Alloy.
The partnership will enable Liberis to leverage Alloy’s platform to add automated compliance verifications to the funding application process.
Alloy made its Finovate debut at our developers conference, FinDEVrSilicon Valley 2016.
Embedded finance platform Liberis has teamed up with identity risk management innovator Alloy. Courtesy of the newly announced partnership, Liberis will leverage Alloy’s technology to integrate automated compliance verifications directly into the funding application process. The integration enables Liberis to accelerate its international growth and simplify the merchant experience.
“Alloy is designed to help businesses take control of fraud, credit, and compliance risk, while growing with the clearest picture of their customers,” Alloy CEO Tommy Nicholas said. “We’re confident that our partnership will help Liberis achieve its goal and provide its merchants with a seamless onboarding experience.”
LIberis will gain access and integrations to a global network of more than 190 data sources to streamline KYC, KYB, and AML operations and stop financial crime. The platform will also support the creation of custom, white-label onboarding experiences for partners.
“Alloy’s platform will allow us to enter new markets quickly, optimize our merchants’ fully digitized application for funding and scale to meet our partners’ demand, while also maintaining our high standards for compliance,” Liberis’ Chief Legal & Compliance Officer Alexis Alexander said. Alexander added that one main challenge with compliance checks is that they can increase friction during the onboarding process. To this end, Alloy’s identity risk solution automates and manages onboarding, fraud monitoring, and credit underwriting processes, reducing the amount of paperwork. For those businesses that need more extensive documentation, Liberis will provide a custom, white-label experience tailored to the needs of merchants and partners alike.
Founded in 2015 and headquartered in New York City, Alloy made its Finovate debut at our developers conference, FinDEVrSiliconValley 2016. Today, more than 500 banks and fintechs have partnered with Alloy to manage identity risk at origination as well as throughout the customer lifecycle. Alloy processes millions of identity decisions daily for the world’s top banks and fintechs in 40 countries across North America, EMEA, Latin America, and APAC. The company has raised more than $207 million in funding from investors including Avid Ventures and Felicis.
Just a few days ago, Alloy issued its 2024 State of Fraud Benchmark Report. The report featured some good news on the fight against fraud. According to the 450+ financial industry fraud decision makers who responded to the firm’s survey, the number of reported fraud attacks has begun to “even out – and for some organizations, to decelerate.” Nevertheless, there were devils in the details, including the number of companies reporting an increase in attempted fraud attacks via consumer accounts (61% of companies) and as well as through business accounts (54% of companies).
“It’s encouraging to see companies getting fraud volume under control using the wide array of identity data and technology available on the market,” Nicholas said when the report was release in late January. “But fraud remains a critical problem because bad actors are always finding new tools – such as generative AI – to steal increasingly large amounts of money.” Indeed, Alloy’s report noted that 56% of respondents lost more than EUR 500,000 ($537,000) to fraud in the last 12 months. Over the same time period, a quarter of respondents had lost more than EUR 1 million ($1.7 million).
Payments infrastructure company Astra and identity risk management innovator Alloy announced a new partnership this week.
The partnership will combine Astra’s advanced payment transfer technology with Alloy’s identity decisioning platform.
New York-based Alloy introduced itself to Finovate audiences at FinDEVr Silicon Valley in 2016.
A newly announced partnership combines identity risk management and advanced payment transfer technology to both streamline onboarding and give businesses new ways to send money to their customers.
Faster payments infrastructure company Astra and identity risk management innovator Alloy shared news of their collaboration today. The two companies will work together to streamline the onboarding process and give customers the ability to deploy Astra’s advanced payment transfer technology in their products.
“With Alloy’s identity risk solutions, businesses can confidently onboard verified customers,” Astra co-founder and CEO Gil Akos said. “Paired with Astra’s best-in-class payment technology, more product owners and consumers can leverage accelerated settlement of funds.”
Astra’s platform helps businesses create and offer debit transfers and Visa Direct payments. Partnering with Alloy will make it easier for businesses to quickly and securely onboard new customers and begin offering debit transfer services, Alloy VP of Strategic Alliances Brian Bender explained, “without taking on additional risk.”
Founded in 2015, Alloy introduced itself to Finovate audiences a year later at FinDEVr SiliconValley. The company’s automated identity decisioning platform provides access to 120+ data sources to enable companies to create automated workflows that verify customer information. The platform monitors transactions among accounts and flags suspicious behavior for further review. The technology also enhances the credit underwriting process, helping businesses make better credit decisions as well as accurate identity and customer information assessments.
Today, Alloy’s platform processes nearly one million identity decisions every day. The company also counts nearly 500 banks and fintechs as its customers. This spring, Alloy teamed up with fellow Finovate alum Kyckr to streamline KYB checks for companies operating outside the United States. In February, the company announced a partnership with loan origination solution provider Baker Hill – also a Finovate alum.
Alloy has raised more than $207 million in funding, according to Crunchbase. The New York-based firm includes Lightspeed Venture Partners and Avenir Growth Capital among its most recent investors.
New York-based identity decisioning platform Alloy has raised $52 million in funding at a valuation of $1.55 billion.
Alloy will use the additional funding to help it respond to global demand in the wake of its recently announced international expansion.
Alloy made its Finovate debut at FinDEVr Silicon Valley in 2016.
Alloysecured $52 million in new funding today. The identity decisioning platform for banks and fintechs announced that the investment, led by Lightspeed Venture Partners and Avenir Growth, gives the New York-based company a valuation of $1.55 billion. The capital will help Alloy respond to growing global demand for its fraud prevention solutions.
Existing investors Canapi Ventures, Bessemer Venture Partners, Avid Ventures, and Felicis Ventures also participated in the funding. This week’s investment comes almost one year after the company raised $100 million at a valuation of $1.35 million.
“We feel incredibly lucky to have partners that not only understand the impact of our investments into our platform and in expanding globally but also proactively come to the table to support them,” Alloy co-founder and CEO Tommy Nicholas said when this week’s investment was announced. “With this newest investment we’ll be able to accelerate our growth and better address the global fraud challenges that companies are facing.”
Alloy demonstrated its technology at our developers conference, FinDEVr Silicon Valley 2016. At the event, the company discussed how its technology enables businesses to build fully-customizable APIs for customer identification and compliance. In the years since then, Alloy has grown into a fraud-fighting unicorn with more than 300 companies using its API-based platform to automate identity decisions during the account origination process and monitor those decisions on an ongoing basis. Leveraging more than 160 data sources, Alloy enables institutions and companies to pull customer, credit bureau, and alternative data through a single point of integration to help them find and onboard good customers without increasing their exposure to potentially fraudulent activity.
Over the past 12 months, Alloy has experienced revenue gains of more than 2x. Processing more than a million decisions daily, Alloy includes Ally Bank, Ramp, and Evolve Bank & Trust among its customers. The company was named to the seventh annual Forbes Cloud 100 last month, a roster of the world’s top private cloud companies. In August, Alloy also announced that its fraud and risk decisioning platform is now officially available in 40 countries in North America, EMEA, Latin America, and APAC.
“We’ve identified a clear need in the global market for Alloy, particularly with the recent rise in fraud, fines for poor implementation of regulatory requirements, and the growth of embedded finance,” Alloy Head of Global Edwina Johnson said. “We’re excited to bring Alloy’s unique platform, and team, to companies operating worldwide.”
“Identity and its associated risk isn’t something businesses should be figuring out, it should just be something they install,” Alloy co-founder and CEO Tommy Nicholas said. “As Alloy grows into a multi-product platform for the full customer identity lifecycle, we can not only help make risk easier to understand, but also further industry innovation by making fintech products easier to build.”
The Series C round was led by Lightspeed Venture Partners’ Justin Overdorff and featured participation from current investors Canapi Ventures, Bessemer Venture Partners, Avid Ventures, and Felicis Ventures. Alloy said that the new capital will enable the firm to “invest” in its team, as well as help expand the company’s product offerings. Over the past year, Alloy’s solution has evolved from a platform that automates onboarding identity decision-making to one that now incorporates transaction monitoring. The company said that it will soon also feature richer data and risk signals to provide FIs with even greater insight into their customers.
Alloy’s API-based platform leverages more than 120 data source products to help companies and banks verify customer identities and monitor transactions. Processing more than 455,000 decisions a day on average, the company’s solution provides both identity verification and risk monitoring functionality in the same place, enabling both developer and product teams to maximize the platform’s resources. The result is a 50% reduction in manual review, and 80% automation rate for new account openings, and an automated customer approval rate of more than 80% for customers such as Novo, Brex, and HMBradley.
Headquartered in New York City and founded in 2015, Alloy was named one of the Best Fintechs to Work for in 2021 by American Banker, and boasts a workforce that is more than 50% female and has ethnic minority representation of nearly 40%. In August, Alloy announced its newest partnership, collaborating with Amerant Bank to automate identity verification in customer onboarding for the $8 billion, Florida-based community bank.
“Providing an exceptional experience for customers, both online and in-person, is at the core of our digital transformation strategy,” Amerant Bank Vice Chairman and CEO Jerry Plush said in a partnership announcement. “With the addition of Alloy, we’ll be able to still meet regulatory requirements, while ensuring a faster and more seamless onboarding and underwriting process that will benefit both customers and Amerant team members.”
In a round led by Canapi Ventures, digital identity management innovator Alloy raised $40 million in Series B funding last week. The round featured participation from Avid Ventures, Felicis Ventures, as well as a trio of existing investors: Bessemer Ventures, Primary Venture Partners, and Eniac Ventures. The investment takes the New York-based company’s total capital to more than $55 million.
“Our mission is to help our customers deploy safe and seamless digital customer experiences,” company CEO Tommy Nicholas wrote on the company blog. “This investment will help us continue to support our growing customer base, while expanding our product offerings and scaling marketing, sales, and customer efforts.”
More specifically, Nicholas noted that the investment will help the company bring new products to market in the areas of transaction and credit decisioning, as well as document verification. He added that Alloy will also continue to invest in its onboarding decisioning system and build a new learning portal to help users maximize their use of Alloy’s technology.
Alloy’s platform enables financial institutions to increase the number of customers they can safely and quickly onboard, automate manual processes to reduce error and manual review burden, and reduce fraud and financial risk. The technology allows FIs to access more than 60 KYC and identity vendors via API, and leverages data from a variety of sources in order to provide real-time risk decisioning. The company includes Ally Bank, Evolve Bank & Trust, and Brex among its partners.
In a blog post titled “Why Canapi is Leading Alloy’s $40M Series B Financing,” the Series B’s lead investor makes a strong case for investment not only in Alloy, but also for investment in digital identity innovation in general. The post discusses the challenge that financial services companies face in meeting compliance and regulatory standards that “were not designed for a digital-first world,” and points out that the arrival of the public health crisis has only made this challenge more acute. “What was costly and ineffective in the past has become unsustainable in the COVID-19 era,” the authors write.
Founded in 2015, Alloy presented “KYC: The Customer Killer – Solved!” at our developer’s conference, FinDEVR Silicon Valley, later that same year. At the event, Nicholas and company CTO Charles Hearn showed how Alloy’s technology enabled businesses to create fully-customizable APIs for customer identification and compliance.
It’s FinDEVr Silicon Valley like you’ve never seen it before—on video! If you missed out on last month’s conference and want to catch the latest in fintech developer trends, or if you just want to re-live the moments from the show, you’re in luck.
Hat, courtesy of Alloy, a customer-onboarding specialist that debuted at FinDEVr in October.
The dream of RegTech is alive at Finovate
Deloitte recently asked what we should make of regtech in a new report titled, “RegTech is the new FinTech: How agile regulatory technology is helping firms better understand and manage their risks.” To the extent that regtech represents technologies, strategies, and solutions designed to help firms better meet regulatory obligations, remain compliant, and/or secure their processes, there may be less new here than meets the eye. Compared to insurtech, regtech firms have been prominent players in the fintech firmament for years.
To its credit, Deloitte is aware of the “old-is-new-again” aspect of regtech. The report notes that “while the name is new, the marriage of technology and regulation to address regulatory challenges has existed for some time with varying degrees of success.”
Indeed. Consider companies like Gremln (F14), which demonstrated a social media platform specifically for regulated industries, and Finect (F13), which unveiled a compliant communication platform for financial professionals. Qumram (F16) provides software that helps ensure complaint communication by recording digital interactions from web, social, and mobile channels.
My Virtual Strongbox (F14) introduced the kind of secure document-storage technology that can help FIs better manage customer documentation. Global Debt Registry, another F14 presenter, provides compliance and risk-management solutions to the account-management industry. OutsideIQ (F16) enables FIs to uncover regulatory risk using a combination of machine learning and human analysis. FundAmerica (F15), arguably one of the most explicitly regtech companies to demo at Finovate, provides crowdfunding platforms with APIs for a wide variety of “mission-critical, back-end regulatory requirements.”
Additionally, there are a sizeable number of credit risk analysis innovators such as QCR (F15), CreditHQ (F16), and FICO (FD16); companies like Avalara (FD15) that help merchants recognize and satisfy sales-tax requirements (or by that token, even a VATBox (F15) that helps recover VAT fees for international travelers); and cloud-based auditing technologies like those available from Auvenir (F16), whose identity as a fintech company was a topic of our deliberations.
And all of this is to say nothing of the even larger number of security and authentication specialists whose technologies—at least by Deloitte’s definition—can be considered regtech. Note that Deloitte’s Ireland-based rundown of regtech companies includes Finovate alum Trustev (F14), whose online ID-verification technology is very much in the same category as dozens of other security, authentication, verification, anti-fraud innovators.
The question as to whether regtech as a “thing” (as the millennials say) can be separated from the broader fintech discussion is likely more of a marketing decision than anything else. Clearly regtech has the ranks; the issue is to what degree does distinguishing them as a type of innovator apart from the larger fintech world make it easier for these companies to attract top talent, develop necessary solutions, and raise the capital to drive and grow their businesses. From the perspective of fintech in general—and Finovate/FinDEVr in specific—we’re happier having regtech innovating from “inside the tent,” as opposed to being outside the tent trying to find a way in.
See also:
To be a fintech hub, Singapore needs RegTech – Today Online
You’ve Heard of Fintech, Get Ready for ‘RegTech’ – American Banker
The emergence of regtech as a catalyst for innovation – BANKNXT
21 Hottest RegTech Startups That Are Defining the Industry – Let’s Talk Payments
Two more major players jumped on the blockchain bandwagon. IBM (FD16) showed its Hyperledger at FinDEVr last week and Visa (FD14) announced its cross-border payment system built on blockchain-like distributed ledgers, an apparent challenge to Swift. The technology is powered by Chain (FD15) which counts Visa, Capital One (FD15) and Citibank as investors. According to Javelin Strategy, banks will invest $1 billion this year in blockchain initiatives.
Mobile payments gets another huge player
Speaking of IBM, one of the more surprising announcements at Money2020 was the launch of IBM Pay, a private-label mobile payments and POS system. Details are sketchy, but in the IBM video below, it appears to be a Starbucks-like QR code system. It’s part of IBM’s Watson Commerce initiative.
After watching two days of live presentations from fintech innovators from around the world, the attendees at FinDEVr Silicon Valley 2016 have made plain their preferences. So many presenters received enthusiastic praise for the way they are solving problems and developing tools/APIs to make payments more efficient, security more effective, and financial data more accessible. Although all companies impressed the audience, still a few emerged as clear favorites.
So without further ado, let’s take a look at them (all chosen by audience vote, except the press/analyst favorite):
Crowd favorite, day one:
MXfor its heartfelt message on how it gets the necessary work done, both in fintech and in life
Crowd favorite, day two:
OCR Labs for its innovations in optical character recognition (OCR) and facial recognition (FR) technology and their application on web and mobile platforms.
Press/analyst favorite:
1787fp for its mobile app that helps consumers track and manage their finances and investments.
Favorite FinDEVr alum:
Lleida.net for its registered email and registered electronic contract technology.
Favorite FinDEVr debut:
WiseBanyan for its free, independent, goal-based roboadviser designed to help investors reach their first $100,000.
Favorite established company:
IBM for its implementation of the Hyperledger Project and blockchain-as-a-service strategy.
Favorite startup company:
Alloy for its software solutions that help financial services companies conduct KYC/AML; develop risk-management strategies; and maintain continuous compliance.
We want to thank everyone who made FinDEVr Silicon Valley 2016 possible. From our presenters to our attendees to all the staff and others who participated in this year’s event, we truly could not do this without you. So give yourselves a pat on the back, raise a toast of something tasty, and mark your calendars as we take our developers conference to the Big Apple next spring for FinDEVr New York 2017, and then across the Atlantic in June for FinDEVr London 2017.
