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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Founded in 2008, Dwolla is one of the fintech originals. Because of its long-standing history in the fintech space, the Iowa-based company has been through a lot of changes as it evolves with banks, fintechs, and consumer demand.
Since its start, Dwolla has focused on offering an alternative to the traditionally slow ACH money transfer system. Initially, the company tackled this objective through a direct-to-consumer (DTC) product, which allowed individual users to sign up for Dwolla to make peer-to-peer money transfers and transact with the company’s merchant partners.
As part of its DTC solution, Dwolla even offered a cardless credit product called Instant. The tool would lend users up to $5,000 for one month, with no interest, in exchange for a $3 per month subscription fee.
As an evolution of its credit offering, the company partnered with Alliance Data to launchDwolla Credit. The ecommerce point of sale product worked much like PayPal in that users would select a Pay with DWOLLA button at the point of sale to complete their purchase. Funds would transfer on Dwolla’s rails to enable merchants to receive the funds instantly in their Dwolla account.
Despite the company’s numerous innovations in the consumer space, Dwolla received the most traction from its bank-focused product, FiSync, a payments protocol for real-time money transfers. The success of this tool prompted the company to exit the consumer space in 2016 to focus on creating payment APIs.
Today, Dwolla’s API helps organizations integrate payments into their application to send, collect, and facilitate payments. Earlier this year the company doubled down on its roots in faster payments to deliver real time payments in collaboration with Cross River Bank. The new, instant payment option leverages the RTP Network to send money directly to a bank account in seconds.
In a post-COVID world in which consumers have been trained to conduct more of their daily transactions online, Dwolla’s real-time payments capability will play a key role. “The immediacy of real-time payments will fundamentally change how businesses operate,” said Dwolla CEO Brady Harris. “As electronic payments continue to grow in adoption, RTP is the perfect complement to our ACH and Push-to-Debit offerings.”
Dwolla, a three-time Finovate alum, most recently demoed at FinovateSpring 2015 where it debuted FiSync. The company has raised $51.4 million from investors including Union Square Ventures, High Alpha, and Foundry Group.
When it comes to European wealthtech companies, Nutmeg is the original gangster. The London-based company was founded in 2011 and demoed at FinovateEurope a year later in 2012.
Today, the company reached a milestone, topping almost $4.2 billion (£3 billion) in assets under management. The news comes after the company experienced a 72% year-on-year growth in assets under management in the first three months of this year.
Nutmeg has seen a 53% increase in the number of investors on its platform over the past year, and now counts 130,000 investors total.
The growth spurt can be attributed to a few things. First, the company brought on a new CEO, Neil Alexander, after taking a $30+ million loss in 2019. Another big factor in Nutmeg’s recent growth is the increased interest in investing during a low interest rate environment.
“While the last year has been financially difficult for many people, we have also seen many new and existing clients who have been fortunate enough to have more disposable income as a result of reduced expenditure on leisure, hospitality, commuting and holidays,” said Alexander. “Nutmeg has been a beneficiary of this shift, welcoming tens of thousands of seasoned investors wanting to take advantage of a digital-first wealth management service, along with first-time investors looking for the support they receive from our wealth services team in helping them to achieve their financial goals.”
Nutmeg offers ISAs, pensions, and general investment accounts. The firm offers a range of investment options including fully managed, fixed allocation, socially responsible. Earlier this year, Nutmeg partnered with J.P. Morgan Asset Management to offer a new investment option, Smart Alpha.
Smart Alpha combines Nutmeg’s core investment principles, ETF experience, and fractional investment expertise with J.P. Morgan’s in-house, multi-asset knowledge to provide investors a globally diversified, dynamic portfolio.
A new partnership between AbbyBank and FinovateFall Best of Show winner Sensibill will enable the Wisconsin-based community bank to give its customers the ability to de-clutter and digitize their financial lives.
“In today’s online world, customers expect more convenience to bank how they want,” AbbyBank AVP of Marketing Natalyn Jannene said. “Our partnership with Sensibill will help our customers and employees with digitizing the shoebox of receipts or overstuffed purses and wallets, making it easier for them to track receipts, exchanges, and warranties in one place.”
Founded in 2013 and headquartered in Toronto, Ontario, Canada, Sensibill offers a receipt management solution that makes it easier to organize and track everything from Health Savings Account receipts to expenses from government relief programs like the Paycheck Protection Program. Sensibill’s everyday financial tools give financial institutions the ability to tap into – and act upon – SKU-level transaction data in order to provide their customers with the kind of personalized financial insights that can help them build better financial habits. More than 60 million individuals across North America and the U.K. use Sensibill’s AI-powered technology.
The company’s newest solution – Sensibill Platform – features a pair of new tools – Spend Manager and Spend Insights – that provide financial institutions with more ways to drive digital engagement with their customers and members. Spend Manager leverages predictive analytics to help customers track and manage their everyday spending, while providing personalized tips and custom advice based on their transactions. Spend Insights enables financial institutions to draw upon more than 150 unique points of data from purchases, and pair them with transaction data to anticipate customer needs and preferences in real-time.
“Sensibill is empowering institutions of all sizes to harness SKU-level data to offer personalized experiences and recommendations that help make customers’ hard-earned money go further,” Sensibill co-founder and CEO Corey Gross explained when the platform was unveiled in January. “The time to act is now – by better contextualizing the transaction-level data they already have with SKU-level insights, institutions can help their customers make smarter financial decisions. Those that do will retain loyalty and expand market share while making financial wellness more attainable for all.”
In addition to its newly-announced partnership with AbbyBank, Sensibill in recent months has also teamed up with Leaders Credit Union of Jacksonville, Tennessee ($520 million in assets) and Progress Bank, a $1.4 billion asset bank that serves customers in Alabama and in the Florida panhandle. Last month, Sensibill earned recognition as the winner of the “Personal Finance Innovation” category of the FinTech Breakthrough Awards.
A Finovate alum since 2017, Sensibill has raised more than $55 million in funding. The company’s investors include First Ascent Ventures, Information Ventures Partners, Impression Ventures, Mistral Venture Partners, and Radical Ventures. Sensibill also secured $5 million in debt financing from CIBC Innovation Banking a year ago.
This week’s partnership with Sensibill is only the latest instance of AbbyBank working with innovative fintechs in order to add to its own offerings. Last month, the Wisconsin-based community bank – with more than $616 million in assets – teamed up with another Best of Show-winning Finovate alum, MX, to power its new PFM solution.
“The goal is to help our customers improve their financial awareness,” Jannene said when the collaboration with MX was announced in March. “Knowing where money is spent allows you to manage your money more effectively. When our customers succeed, we succeed and that is truly what AbbyBank is here for.”
Alternative banking services company SoFi unveiled a new product last month that will enable eligible members to participate in upcoming IPOs.
The tool will sit within SoFi Invest, a suite of investment tools that offers automated investment services, retirement accounts, a cryptocurrency wallet, and more.
Here’s how it works- users with at least $3,000 in their Active Invest accounts can select the IPOs they’d like to participate in by submitting an indication of interest. Once the IPO is live, investors will receive a notification asking to confirm their order and secure their shares.
If you’re a fintech veteran, this concept may sound familiar. There have been a handful of companies that have opened up IPO participation for retail investors, which are generally excluded from IPOs since they don’t generate the same revenues as institutional investors or high net worth individuals.
The first fintech to offer IPO access to retail investors was Loyal3, which was founded in 2008. The company launched a social IPO platform in 2014 that partnered with pre-IPO companies to enable them to include consumers, employees, partners, and fans in their IPO. Investors were required to purchase a minimum of $100 in stock but were not charged a fee. Loyal3, however, may have been ahead of its time. The company closed its doors in 2017.
Linqto, which recently demonstrated its platform at FinovateWest 2020, allows accredited investors to invest in pre-IPO unicorns. The company requires investment minimums ranging from $5,000 to $10,000. Among the companies currently available to investors are Impossible Foods, Ripple, and Nerd Wallet.
Yet another fintech in this arena is MarketX, a cross-border marketplace that allows investors to browse deals and invest in pre-IPO companies across the globe. MarketX currently offers investors access to pre-IPO companies in the U.S., China, Singapore, Indonesia, India, the UAE, and more. While MarketX advertises to accredited retail investors, the company requires a minimum of $50,000, a figure that is much higher than others working in this space.
With higher minimums and accredited investor restrictions, the IPO investment offerings from Loyal3, Linqto, and MarketX aren’t as accessible as SoFi’s proposed IPO investment tool. Stock trading app Robinhood, however, is also rumored to be entering this space with an offering that will compete on the same level as SoFi.
Reuters reported last month that Robinhood plans to democratize IPO investing by enabling its users to buy into IPOs. According to the news source, Robinhood is allowing its users to buy into its own IPO (which is slated for later this year) and will then use the technology it built to create a more general IPO investment tool for its 13 million users.
SoFi showcased at FinDEVr New York 2017 in a presentation about leveraging bank authentication. FinDEVr will be returning to the Finovate lineup with its own stage at this year’s FinovateSpring digital event. Check out the event page to learn more.
Analytics company GoodData may have been founded 10 years ago but, as the company recently explained, it is just now exiting stealth mode.
That’s because GoodData is transitioning from focusing on white-labeled OEM analytics, where companies provide self-service insights to their clients, to focusing on Data-as-a-Service (DaaS). As GoodData Founder and CEO Roman Stanek explained, “It takes 10 years to become an overnight success.”
GoodData’s analytics now power over 140,000 businesses across the globe, and the company has spent the past two years building for the next chapter. Starting April 15, GoodData will expand its focus to offer DaaS. The offering transcends “business intelligence” to enable companies to make every decision a data-driven decision.
“Data-as-a-Service is the future of analytics: real-time, governed, secure, and scalable,” Stanek said. “Within the context of DaaS, we are opening our platform and making our experience with large scale analytics, data privacy, security, and operational excellence available for anyone to leverage to build and scale any of their data use cases; from self-service and embeddable analytics, to machine learning and IoT.”
Unlike GoodData’s initial offering, which was limited to running on Rackspace and Vertica, the DaaS platform will be available to companies of all sizes running on any cloud and cloud database. Additionally, the new build focuses on helping users gain insights from the data instead of simply presenting charts that still required significant interpretation.
Headquartered in San Francisco, California, GoodData most recently demoed at FinovateFall 2017. The company has received $151 million in funding from 20 investors including Visa Ventures, General Catalyst, and Andreessen Horowitz.
“International trade and foreign exchange can be a complex business for financial institutions of any size to manage successfully,” Finzly CEO and founder Booshan Rengachari said. “With one integration to the core, our FX STAR and EXIM STAR solutions help institutions like Fulton Bank to more efficiently, securely, and cost-effectively meet the needs of their customers.”
Finzly specializes in connecting banks and their customers via a real-time payment services hub and cloud-based bank operating system, BankOS, delivering a modern, digital banking experience. The company’s platform leverages open APIs and integrations into core technology to enable financial institutions to subscribe, try, and launch both Finzly’s and third-party fintech apps and solutions. With FX STAR, Finzly’s customers are able to execute foreign currency transactions, purchase foreign currencies in bulk using multi-currency accounts, as well as initiate payments. EXIM STAR serves as an international trade finance solution to help financial institutions manage the transaction lifecycle for commercial letters of credit, standby letters of credit, and documentary collections.
“We recognize Finzly as a proven provider that understands the unique business needs of regional financial institutions,” Fulton Bank International SVP and Manager Amy Sahm said. “Through the implementation of their user-friendly platform, our bank has been able to achieve better standard functionality across the board – from improved access to reports and confirming trades, to upgrades in investigation and reconciliation capabilities.”
Fulton Bank operates more than 223 financial centers in Pennsylvania and New Jersey, as well as in the mid-Atlantic states of Maryland, Delaware, and Virginia. The firm is a subsidiary of Fulton Financial Corporation, a financial holding company based in Lancaster, Pennsylvania, with $26 billion in assets.
Finzly made its Finovate debut in 2019. The Charlotte, North Carolina-based company most recently demonstrated its digital account opening solution at FinovateWest 2020, earning a Best of Show award from conference attendees. This year, in addition to its partnership with Fulton Bank, Finzly teamed up with Lead Bank, a Kansas City, Missouri-based “community-minded” commercial bank. Lead Bank implemented Finzly’s Payment Hub – part of Finzly’s Bank OS – to boost its own payment and digital capabilities.
“The ability to service our fintech and corporate clients with a Banking as a Service solution, as well as communicate messages to and from the core platform, is crucial to fulfilling and facilitating the requirements of Lead Bank and our channel partners,” Sheila Stratton, Director of Digital Strategy, Lead Bank said. “Finzly’s solution provides a modern technology platform in which our bank can expand payment capabilities while tapping a flexible and innovative solution to support our bank in delivering on the specialized needs of our clients.”
As well as partnerships, 2021 marked the launch of Finzly’s SWAP STAR solution. The new technology provides an end-to-end, sales, trading, and post-trade processing system for interest rate derivatives. SWAP STAR is available as an app within Finzly’s BankOS cloud-based bank operating system.
From its role as a digital currency innovator to its controversial, politics-free workplace stance, Coinbase continues to be one of fintech’s most compelling stories. And with the company moving ever closer toward a becoming a publicly-traded firm, attention on the San Francisco, California-based digital currency exchange only has intensified.
There may be no better example of this dynamic than an article published on Bloomberg.com this week headlined “Coinbase Is a $100 Billion Crypto Cult.” The author, Jared Dillian, is an investment strategist who wastes little time in letting readers know where he stands on a platform that “has frequent service outages, nonexistent customer service, and sky-high transaction costs.”
Nevertheless, as Dillian acknowledges, there are precious few alternatives for individual cryptocurrency investors. Moreover, much of his dissatisfaction seems to stem from an unfavorable comparison between Coinbase and discount stock brokerages – which have very different histories as well as very different ways of generating revenue.
As for the cult reference, that too has less to do with Coinbase and more to do with the author’s take on the contemporary enthusiasm/mania for cryptocurrencies. If you believe that investment in Bitcoin and other digital assets “has crossed over into religion territory” and represents “an investment cult,” then it is understandable to be critical of an institution that facilitates the behavior. But that, as Dillian indicates, is akin to blaming the store for selling picks and shovels to the gold miners.
What is Coinbase eight and a half years after its launch in 2012 (and six and a half after its Finovate debut)? Will its going public mark the beginning of a new era in digital asset adoption by institutions and individuals? Or, as has been the case in the past, will the news signal, if not an end, then at least a pause in what has been a surge in interest in cryptocurrencies since the spring of 2020?
Here’s what we know: Coinbase has filed with the SEC to go public by way of a direct listing, selling shares directly to the public rather than via a traditional IPO. The company will trade on the Nasdaq under the ticker COIN. In terms of the company’s current valuation, at its most recent funding in 2018, Coinbase was valued at $8 billion. More recently, Axios has reported that Coinbase was valued at $100 billion when it sold shares on the Nasdaq Private Market earlier this year.
Coinbase currently has 43 million verified users (up from 12,000 in 2012). The company has a lifetime trading volume of $456 million and currently has more than $90 billion in assets on its platform. In fiscal 2020, the company experienced trading volume of $38 billion more than double that of fiscal 2018. And perhaps most critically, Coinbase has begun to secure the kind of institutional support that both the company and the cryptocurrencies it manages need. The company reported having 7,000 institutional customers as of the end of 2020, a seven-fold increase over 2017. Revenue growth also has been strong for Coinbase, with the company achieving revenues $1.3 billion in fiscal 2020 compared to $533.7 million in fiscal 2019.
What does this mean for a publicly-traded entity? The best case for $COIN may rest in its ability to serve as a safer haven for crypto-curious investors who do not have the interest in analyzing – or even deeply understanding – individual digital assets. Coinbase could find itself serving a role, in the near-term, that might otherwise be played by a Bitcoin or cryptocurrency exchange-traded fund. And if we are still in the early days of the Digital Asset Age, that may not be a bad place to be.
Multiple benefits arose from last year’s drive to digital, including the increase in user data and more control over the user experience. But making the leap to capturing that data and enhancing control over the user experience is easier said than done.
It is this gap that led Quantum Metric to launch its platform for continuous product design. The product uses realtime data from digital customer interactions to inform the decision-making process. As a result, firms can maximize opportunities, find errors, measure engagements, and more.
Quantum Metric offers tools for a range of industries, including retail banking. Some of the company’s retail banking clients include Western Union, Bank of Montreal, Silicon Valley Bank, and Aspiration.
In the video below, Aspiration Chief Product Officer Jody Mulkey explains how his bank uses Quantum Metric to understand sticking points in its application process and better interpret how clients are using the bank’s tools.
Founded in 2015, Quantum Metric became a unicorn company earlier this year after raising $200 million in a Series B funding round. Because the company aids in the transition to digital, Quantum Metric came close to doubling both its staff and revenue in 2020.
Though there is no official word on a public offering, Quantum Metric appointed a new Chief Revenue Officer, Chief Financial Officer, and Advisory Board Member late last month. The new hires indicate the company may be poising itself for an IPO in the foreseeable future.
Quantum Metric is one of the demoing companies at FinovateEurope 2021, which will take place digitally on March 23 through 25. Register to watch the demo and network with the company during the event. Or, check out a recording of the demo on Finovate.com later this year.
With new vaccines helping stoke confidence in a post-COVID summer, if not spring, what has the pandemic – and the work-from-anywhere movement it accelerated – revealed about the security of our increasingly digital world?
What is the biggest takeaway from your report on fraud?
Christina Luttrell: As COVID-19 drove 84 million Americans online for services that were previously carried out in person, businesses faced an influx of new customers to onboard. In response, many appeared to loosen fraud controls in an effort to reduce friction and simplify onboarding, particularly for digital “newbies.”
With this loosening, combined with COVID-19 factors such as dispersed fraud teams, remote work, stimulus checks, and sophisticated phishing and synthetic identity fraud (SIF) schemes, it’s easy to understand why fraud attempts surged to a four-year high. Also not surprising is the emergence of mobile as the most targeted channel, evidenced by an astounding 89% increase in fraud attempts likely due to an increased reliance on mobile devices during the pandemic.
In the report each year, we’ve seen businesses struggle with the challenge of balancing fraud with customer friction. Businesses drive revenue by greenlighting customers, which includes removing barriers and minimizing effort during the onboarding process to avoid unnecessary “friction.” Yet they must do so while deterring fraud. This challenge is exacerbated by current events and the state of fraud and, as a result, verification of identities was cited as the top challenge to fraud deterrence among businesses. Many have come to the conclusion that, at its core, fraud is an identity problem and 86% firmly view digital identity verification is a strategic differentiator across all industries.
When it comes to the future, 79% of businesses expect fraud to increase in 2021. With the COVID-induced shift to digital, fresh collection of more Personally Identifiable Information (PII) from 2020 and potential economic conditions, this is likely to be a “bust out” year for fraud.
How quickly have fraudsters followed the migration to digital channels during the COVID-19 crisis?
Luttrell: From our study, The COVID-19 Effect on Identity, Fraud and Customer Onboarding, we know that between March and July of 2020, 37% of Americans online activated an online service that was done offline prior and 46% said they have used their smartphone more often to sign up or apply for a new service. As a result, one-third of businesses experienced a customer shift of 50% or more to digital channels. In 2020, the number of new accounts opened with a mobile phone increased 43%. Fraudsters tend to follow the masses and the money and, in 2020, as those consumers went digital, criminals were quick to follow, employing rapidly shifting tactics, which was reported as a top challenge to fraud deterrence for 40% of businesses.
Mobile fraud attempts surged 89% in 2020 with increases across all fraud types, from spoofing and cloning to porting. With more consumers relying on digital information sources and businesses sending a higher number of customer communications, 56% of businesses reported phishing attacks as one of the most prevalent forms of fraud in their industries.
The pandemic provided a prime opportunity for fraudsters to take advantage of distracted Americans, the increase in digital communication between businesses and consumers and government relief efforts. Our research shows that 84 million Americans reported experiencing a phishing attack attempt in the months following the pandemic’s start, with an average of four attempts per person between March and June.
How have cybersecurity professionals effectively responded to this shift?
Luttrell: It appears cybersecurity professionals responded rapidly to this shift as best they could, but COVID-related disruption and distraction, such as remote working and government relief checks, put a wrinkle in plans and added a new layer of complexity to fraud detection and the consumer experience. Fraud is an identity problem, making identity verification the essential “digital handshake” and element of establishing trust. We expect to see more companies rely on the orchestration of blanketed layers of identity attributes, artificial intelligence, and integrated verification methods to remove friction and deter fraud.
Successfully onboarding new customers and building long-term loyalty in today’s rapidly shifting fraud landscape will require businesses to act quickly. On the back end, they will need to understand how identity verification attributes are performing so they can make adjustments to attributes that pinpoint fraud on an extremely granular scale while streamlining the verification process for real customers.
What kinds of fraud are increasingly prevalent – especially compared to the pre-COVID-19 period?
Luttrell: Aside from COVID-related fraud, such as vaccination schemes, the fundamental methods of remain relatively unchanged. Instead, the shift has occurred in the sophistication and amount of fraud which, as I mentioned, is rising across the board compared to pre-COVID numbers.
Credit, debit, and prepaid fraud were reported as the most prevalent by 63% of businesses, followed by phishing, account takeover, ACH/wire and first-person fraud. ACH/wire fraud spiked by 15% – presumably because of rising P2P usage due to social distancing and first-party, specifically “friendly or know fraud,” increased 28%. This may be attributable to chargeback fraud schemes as many Americans were unemployed, underemployed or suffering in shape or form financially, thereby increasing their pressure and rationalization of committing fraud.
Your report mentions the issue of synthetic fraud in the PPP lending program as specific challenge. Can you elaborate on this problem and what should be done?
Luttrell: A range of fraud schemes were used to exploit PPP in 2020, one of the most concerning being synthetic identity fraud (SIF). According to McKinsey, this is the fastest growing type of financial crime in the U.S. A recent report by Aite Group revealed that among 47 financial institutions surveyed, 25% experienced an increase of 10% or more since the start of the pandemic. Our own research also underscores the SIF problem, which hit an all-time high, with a 43% increase in SIF reported by respondents to the IDology Fraud Report.
SIF continues to trouble businesses, especially given the challenges associated with decentralized fraud teams working from home and the need to interpret and apply once-in-a-lifetime changes in consumer behavior and the swings and noise they create. There are also the problems created by the never-ending stream of data breaches, and the use of personally identifiable information gathered from phishing attempts and other scams that continue to thrive in the COVID era.
To quickly issue PPP loans and prevent fraud, lenders should reconsider the importance of Know Your Customer (KYC) measures. Placing a focus on strong KYC is not only best business practice, it also will help lenders prevent fraud and maintain integrity. To easily and securely ensure a borrower is who they claim to be and provide a smooth experience while battling fraud, such as SIF, the identity verification process supporting KYC should include multiple layers, control of the entire identity verification process and the flexibility to make and automatically deploy configuration changes and machine complimented with human intelligence.
How would you characterize the business world’s response to these new threats, especially in financial services?
Luttrell: The business world, as a whole, responded admirably. Consider the massive logistical shifts that needed to happen in months, if not weeks, from the mass migration of working from home to customer engagement and the shift toward digital. On a human scale, it’s a breathless achievement. Eighty-seven percent of businesses feel their organization is equipped to some degree to make the necessary changes to stay ahead of rapid digitization and COVID-19 fraud trends, indicating they recognize and perhaps, have a higher than expected sense of confidence.
Although two-thirds of Americans feel companies could be doing more to protect their identities, confidence in organizations being able to protect their data actually increased in comparison to pre-COVID-19 levels. Our data shows that financial services organizations are stepping up, forecasting larger anti-fraud investments and budgets for 2021, and leaning into a multi-layered approach to identity proofing as well as using diverse sources and types of data. Eighty percent of financial institutions expect to increase budgets on fraud deterrence in 2021, with 45% saying significantly, more so than any other industry. Though the investment varies by sub-sectors such as fintech, lenders and prepaid, prepaid firms appear to be most aggressive.
How do you think the post-COVID cybersecurity landscape will differ from the pre-COVID cybersecurity landscape?
Luttrell: The cat and mouse saga continues and the chase maze has become significantly more complicated. The lesson for many, in hindsight, is that strong, thoughtful and comprehensive digital identity verification is mission-critical. The digital handshake is essential in establishing trust.
Fraud knows no borders and the world is small and inter-related, as is identity verification. Address verification as part of identities is not only critical for accurate verification, but also for the delivery of essential items and resources. Americans have migrated much of their lives to digital, forever.
Identity collaboration between businesses and with customers will be more sought after, and technology, such as artificial intelligence, will need to be supplemented with high-touch layers of human intuition, proactive detection, fraud expertise, and consortium intelligence from other organizations. This is especially important as COVID introduces novel fraud schemes that can fool pre-COVID identity proofing methodologies. As was the case with major events in the past, the outcomes and unintended consequences of the pandemic are unknown but we know that fraudsters are harvesting data, scheming, probing new defenses, partnering with nation states and utilizing artificial intelligence to scale fraud on a global basis.
AI marketing expert Micronotes recently launched a refinancing tool that will help consumers reorganize their debt, while enabling banks to lower their borrowing costs and boost customer retention.
The new tool builds on Micronotes’ ReFi solution it launched last June. The credit marketing automation suite enables banks to leverage AI to help their clients automatically identify refinancing opportunities for a range of consumer debt, including auto loans, personal loans, student loans, credit card debt, and mortgages.
With today’s advancement of ReFi, Micronotes is teaming up with Experian to leverage the firm’s database of consumer credit profiles. Experian will compare the bank’s current lending criteria to the consumer’s credit profile, and then synthetically refinance the customer’s existing debt held elsewhere while identifying other refinancing opportunities.
“We’re thrilled to partner with Experian to leverage artificial intelligence and data to help consumers lower their borrowing costs,” said Devon Kinkead, founder and CEO of Micronotes. “With an estimated $2 trillion in mispriced debt, during an era of persistently low interest rates, we help digital banking customers see where they’re overpaying interest that can be refinanced with a lender they know and trust — their primary financial institution.”
Micronotes’ personalization expertise comes in via the customer communication piece. The company will send the customer a message in the digital banking channel that informs them of the potential savings. Using Micronotes’ technology, the customer can respond to the message using preset, customizable quick-response buttons that range from “remind me later” to “chat with a banker.”
This quick-response messaging system is Micronotes’ bread and butter. The company was founded in 2008 to help financial institutions start conversations with their customers in a non-invasive way. At the company’s most recent Finovate appearance, FinovateSpring 2013, Micronotes showed off its cross-sell feature that uses predictive analytics to bring the branch sales process into the digital channel.
Headquartered in Boston, Massachusetts, Micronotes has raised $12.2 million.
Two years after its debut at FinovateMiddleEast, Kuwait-based financial services aggregator FinFirst is celebrating a 2020 that saw the company facilitate millions of dollars worth of financing applications since the launch of its financial services app last summer. The company, founded in 2015 by CEO Abbas Hijazi, unveiled a financial superapp that serves as a marketplace for banks and financial services companies to offer auto, personal, student, and healthcare loans, as well as credit cards and Buy Now Pay Later installment loans. FinFirst promises a secure and fast, 20-click application process that averages less than 10 minutes to complete.
FinFirst also announced this week that it has secured a total of $4 million in equity investment. The investors were not disclosed. Hijazi said the funding “demonstrates the level of confidence in the market for a product which is simply transforming the face of the financial services sector.”
Since it began offering services to the small business community in March of last year – just before the COVID-19 crisis hit – FinFirst has received $40 million worth of financing applications from SMEs. FinFirst also has received $7.7 million worth of consumer financing applications since it began offering consumer-based solutions in the fourth quarter of 2020.
The majority of FinFirst’s personal finance customers are pursuing consumer financing – approximately 60% – while auto financing represents the remaining 40%. The company reports a high 90% lead conversion rate on its superapp, making the platform an attractive option for FinFirst’s financial services partners.
“These first-year results stand us in good stead to build upon a solid foundation of strong business and consumer appeal, which is enhanced by the speed and ease of our digital application app,” explained FinFirst Chief Operating Officer Afrah Al-Hubail. She added that FinFirst plans to spend 2021 enhancing its offering, collaborating with financial services providers and fintechs, as well as forging more partnerships and adding new products.
Among the more recent alliances announced by FinFirst is its partnership with Kuwait’s Boubyan Bank. An Islamic digital bank with total assets of more than $17 billion as of 2019, Boubyan Bank has the National Bank of Kuwait as its major shareholder, and is regarded as one of the up-and-coming banks in the Gulf region. The institution’s CEO and Vice Chairman, Adel Al-Majed, was named Arab Banker of the Year 2020 by The Union of Arab Banks.
One of the top themes of 2020 was cybersecurity. The increase in online traffic, spurred by social distancing and stay at home orders, offered cybercriminals more hacking opportunities than in previous years.
This means that for fintechs like Dashlane, it’s time to shine. Dashlane was founded in 2009 and its password management technology has since gained a cult-like following.
The Dashlane app stores the user’s passwords and autofills the corresponding username and password on each of their accounts. In addition to account logins, the app can also help streamline the checkout experience by filling in forms with address and payment card information.
This week, the New York-based company made headlines with the announcement of its new CEO. Dashlane appointed JD Sherman to lead the company. Sherman, who is filling the shoes of former CEO Emmamuel Schalet, comes to the company with decades of experience from leadership roles at IBM, Akamai, and most recently HubSpot, where he served as President and Chief Operating Officer.
“The need for better security practices has become more important than ever for everyone, from individuals to small businesses and larger enterprises, especially with the increase of remote work across every industry,” said Sherman. “I’m thrilled to be joining the Dashlane team at a pivotal moment of growth, and look forward to working with this group of world-class security experts as we continue to build a simpler digital future for people and businesses through secure access.”
The change in leadership comes at a pivotal time for Dashlane as the company seeks to forge more enterprise partnerships. “This is about thinking about its next leg of our scaling strategy, more B2B monetization after being strong in B2C,” Sherman said in an interview with TechCrunch.
Sherman isn’t exaggerating about being strong in the B2C space. The company has scaled to 15 million users– up from 10 million users just two years ago. And since so much of consumers’ lives have moved online in the past year, this growth is expected to increase.
Dashlane has raised a total of $211 million after most recently pulling in $110 million in a Series D round led by Sequoia. While there is no word on an updated valuation for the company, Dashlane was last valued at $500+ million in 2019.
Dashlane’s Finovate debut was at FinovateFall 2012. The company also demoed at FinovateEurope 2013.
