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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Financial health platform Credit Sesameannounced this week it has launched Sesame Cash, a debit card aimed to help consumers reach financial stability while optimizing credit.
The San Francisco-based company, which sees 500,000 new members every month, said that more than five million of its existing members want a digital banking service that integrates their cash and credit. Sesame Cash does just that.
“Through the use of advanced machine learning and AI, we’ve helped millions of consumers improve and manage their credit. However, we identified the disconnect between consumers’ cash and credit—how much cash you have, and how and when you use your cash has an impact on your credit health,” said Credit Sesame Founder and CEO Adrian Nazari. “With Sesame Cash, we are now bridging that gap and unlocking a whole new set of benefits and capabilities in a new product category. This underscores our mission and commitment to innovation and financial inclusion, and the importance we place in working with partners who share the same ethos.”
The Sesame Cash account includes a fee-free Mastercard debit card with no overdraft fees, no minimum balance, and no service fees. Cardholders have free access to more than 55,000 ATMs, the option for early payday, real-time transaction notifications, the ability to freeze or unfreeze the debit card, and virtual card integration with other mobile wallets.
Unique to Credit Sesame’s bank account are daily credit score updates, cash rewards for credit score improvement, and free identity theft protection.
Future advancements include a billpay service that helps users lower their interest payment and pay down debt faster, a roundup autosave tool, rewards programs, and budgeting tools.
This move by Credit Sesame comes at a time when many fintechs are launching debit accounts and high yield savings accounts in order to compete with traditional financial institutions for not only consumer deposits but also mindshare. One of the company’s closest rivals, Credit Karma, launched a high interest savings account last October that yields 1.30% (down from 2.03% at launch).
Credit Sesame’s decision to offer a debit card instead of a high yield savings account will ultimately prove to be a winning strategy. Many fintechs that have launched high interest accounts in the past couple of years have little differentiation now that the U.S. Federal Reserve has cut interest rates to 1.25%.
Deutsche Bank Group is giving Deutsche Bank Wealth Management a boost today by teaming up with wealthtech firm QPLIX. The partnership also comes with an investment for QPLIX; Deutsche Bank has acquired a minority stake in the Germany-based company.
“With this cooperation, we are combining the innovative power and digital expertise of QPLIX with Deutsche Bank’s large client base and many years of experience in serving ultra-high net-worth clients,” said Kai Linde, co-founder and managing director of QPLIX.
With the collaboration, Deutsche Bank’s Wealth Management arm will use QPLIX to help clients manage and control investments among all asset classes, including illiquid investments such as real estate, on a digital platform. The bank will also tap QPLIX’s software for Deutsche Private Port, the digital investment office of Deutsche Bank Wealth Management.
For its part, QPLIX will leverage Deutsche Bank to offer its clients access to 100 data interfaces.
“With comprehensive asset mapping, we are meeting a need of our top clients and strengthening our market leadership in Germany,” said Deutsche Bank’s Head of Wealth Management Germany Frank Schriever.
Kyndi, Featurespace, Onfido Recognized as AI Innovators in Fintech – A trio of Finovate alums are among the 100 companies highlighted by CB Insights in its newly-available report, AI 100: The Artificial Intelligence Startups Redefining Industries. The report, CB Insights’ 4th edition, focuses on companies that are innovating in the fields of “synthetic voice, quantum machine learning, protein modeling, and more.”
Top level takeaways from the report include the fact that 10% of the companies in the 2020 AI 100 are unicorns with a valuation of more than $1 billion. Most of the companies (65%) are U.S.-based, with Canada and the U.K. coming in second with eight startups each. China has six companies represented in CB Insights’ AI roster.
Kyndi demonstrated its Explainable AI platform at FinovateSpring 2018. The technology leverages machine learning to streamline regulated business operations and provide auditable AI systems. The company was founded in 2014, and is headquartered in San Mateo, California. An alum of FinovateFall, U.K.-based Featurespacedemonstrated its ARIC Fraud Manager at FinovateFall 2016. This solution uses machine learning and adaptive behavioral analytics to identify potential fraud based on anomalous behavior.
Demonstrating its Facial Check with Video solution at FinovateFall 2018, Onfido showed how its technology used machine learning to compare images on identity documents with facial biometric data and digitally verify people’s identities.
Agora Scores $2 Million in Funding – Digital platform banking solution provider Agora is in the process of securing $2 million in funding. News of the investment comes as the company announces opening a new headquarters in Atlanta, Georgia.
“We selected Atlanta because the region provides us the best combination of access to business development and talent, while also being a part of the growing fintech community,” Agora Services founder and CEO Arcady Lapiro said. Agora made its Finovate debut last year at FinovateSpring, demonstrating its mobile banking solution for teenagers.
Regional banks and credit unions leverage Agora’s technology to provide a digital experience for their customers without having to replace their core banking systems. Agora enables institutions to offer their customers popular digital banking and financial management solutions such as shared accounts, PFM, card controls, money pools, and children’s account management.
“In order for financial institutions to remain competitive,” Lapiro said, “they must have the latest and most robust digital offerings. Banks have to move beyond a website, a standard app, or mobile check deposit. They must compete with the latest fintech technology.”
Here is our weekly look at the latest news from our Finovate alums.
ECOMMPAY becomes the first PSP to integrate with the new PayPal commerce platform.
Singapore Exchange acceptsAyondo’s application to extend submission deadline for its proposal to resume trading.
MYHSM partners with ACI Worldwide to integrate its Hardware Service Module into ACI’s UP platform.
TransferWisegoes live in Portugal in partnership with Activo Bank.
Fiservacquires merchant services company MerchantPro Express.
Leading Vietnamese commercial bank, MSB, will deployMambu’s cloud-native banking platform by the end of this year.
Vantage Bank Texas to deploy digital banking technology from Backbase.
Forte Payment Systemslaunches its new BillPay solution.
TurnKey Lenderpartners with Cambodia-based Sambat to bring real-tie decisioning to their loan application processing.
DemystData to provide contextual data for SparkBeyond.
Roostifyexpands deal with TD Bank to include home equity loans and lines of credit.
HousingWire namesLoan Scorecard a 2020 HW Tech100 Mortgage Winner.
Larkyjoins Visa’s Fintech Fast Track program to integrate Larky’s nudge engagement platform with VisaNet’s global payment network.
New Hampshire Mutual Bancorp migrates to Jack Henry & AssociatesSilverLake System core platform
Finovate Alum Features and Profiles
PayPal Takes to the Google Cloud – Google Cloud has unveiled its latest data center and announced that PayPal will be among the first to move key components of its payments infrastructure to Google’s cloud region.
Conversational AI Innovator Clinc Inks Partnership with Visa – Courtesy of a newly-announced partnership between Visa and the conversational AI innovator, customers of participating banks and credit unions will be able conduct a wide variety of banking operations by communicating directly with their bank accounts using natural, conversational language.
How a Banking License Evolved Neo’s Vision – Neo was founded in 2017 with a vision, as described by CEO Laurent Descout, “to create a platform that can replace the old fashioned banking platform. A true ‘one-stop shop’ that offers all the financial products a corporate client needs to operate in a global environment.”
New Investment Gives Ant Financial a Minority Stake in Klarna – Chinese conglomerate Ant Financial has purchased a minority stake in Sweden’s e-commerce payments innovator Klarna. The terms of the investment were not disclosed, but the company said that the funding amounts to a 1% stake.
Equifax Adds Rental Payment History to Credit Insights – Consumer insights company Equifax is partnering with U.K.-based Credit Ladder, a rent reporting service. Under the partnership, Equifax will leverage data from Credit Ladder to help tenants who pay their rent on time access fairer credit rates.
Thought Machine Locks in $83 Million in Growth Funding – U.K.-based, cloud native, core banking technology provider Thought Machine has just secured Series B funding that will help the U.K.-based company expand into the Asia-Pacific.
Digital asset exchange platform AlphaPoint has raised $5.6 million in funding. The news follows the company’s last round in 2018 when it pulled in $15 million. Today’s investment brings AlphaPoint’s total funding to $23.9 million.
AlphaPoint will use the cash to further develop its white label exchange and brokerage platform. The New York-based company will also work to create “sophisticated exchange features” such as margin trading, integrated advanced brokerage capabilities, and premium liquidity solutions.
“This capital injection enables AlphaPoint to continue delivering on our mission to enable access to digital assets globally. We are still in the early days of adoption and utilization of blockchain technology” said AlphaPoint CEO and Cofounder Igor Telyatnikov. “Stay tuned in 2020 as we will soon announce the release of a series of new liquidity, leverage, and lending products and solutions to our customers.”
AlphaPoint has also appointed two new members to its Board of Directors, Tim Scheve, President and CEO of Janney Montgomery Scott, and Jan Mayle, CEO and Founder of The Mayle Group. “The blockchain industry is evolving quickly and AlphaPoint is well positioned to help financial institutions cross the chasm and participate in the digital asset ecosystem,” said Mayle. “I look forward to lending my capital markets experience and helping AlphaPoint in its next chapter of growth.”
Founded in 2013, AlphaPoint powers digital asset exchange networks for companies across the globe. The company also maintains the AlphaPoint Distributed Ledger Platform (ADLP), which interoperates with more than 20 ledger technologies to digitize financial instruments, create trading venues, and reduce operational overhead. AlphaPoint is headquartered in New York with offices in Philadelphia, San Francisco, and North Carolina.
Consumer insights company Equifax is partnering with U.K.-based Credit Ladder, a rent reporting service.
Under the partnership, Equifax will leverage data from Credit Ladder to help tenants who pay their rent on time access fairer credit rates. This data is especially important in the U.K., where 29% of residents rent their residences. Of those, many have a limited borrowing history that results in thin credit files. This typically underserved group ultimately finds it difficult to gain access to reasonable rates for credit cards and loans.
“The inclusion of rental data in credit assessments is a huge lift to improve financial inclusion and fairer access to the right financial products. This data insight provides lenders with a much more reflective picture of the amount renters can afford to borrow,” said Janice Rudd, Data Director at Equifax. “Renters who make full and timely monthly payments should see a significant benefit in proving their ability to repay a commitment, just like mortgage payers. We’re pleased to work with CreditLadder to unlock better financial outcomes for consumers and lenders alike.”
CreditLadder was founded in 2016 and currently has “thousands” of tenants reporting their rental payment history on its platform. CEO Sheraz Dar said that the company’s mission is to “deliver financial fairness” to users and help them access credit when they are ready. “Working with Equifax to add tenants’ payment track records to their reports is a major enhancement for our users, and for our platform,” Dar said.
CreditLadder, which is also partnered with credit reporting agency Experian, provides its rent reporting services for free for both landlords and tenants. The company also offers a paid product, CreditLadder Plus that comes with mobile phone insurance and discounts at retailers including Argos, Caffe Nero, and Tesco. CreditLadder Plus costs users around $11.50 (£8.99) per month or $102 (£79) per year.
The news that Jassby, a PFM app for kids, has raised $5 million in new funding is one small step for savings solutions and one giant leap for financial education.
The Family Finance App, which has more than 100,000 users, enables kids to receive money from parents and grandparents, which they can then save, spend, or donate in a safe, supervised “Walled Garden”-style, digital platform. Jassby notes that the combination of a digital wallet and a shopping tool – along with parental participation – will help kids learn responsible financial habits by connecting what they have to what they want. This can be a more effective way of learning than simply studying lessons on smart financial habits and then taking tests and quizzes to see if the material is truly understood and absorbed.
Benjamin Nachman, Jassby CEO, called the promotion of financial literacy “one of our core values.” He added “we have built a cutting-edge system that allows us to partner with schools, sports clubs, and businesses to create a full ecosystem for our users.”
“Jassby has created a holistic digital financial ecosystem for kids, teens and their parents,” Moneta Managing Partner Adoram Gaash said. “(Jassby) deals with the real issue of financial illiteracy, and lets kids use financial services in a very smart way.” The app is currently available as a downloadable iOS solution, as well as a web app.
The round, which takes Jassby’s total capital to $10 million, featured participation from Needham Bank and Moneta Capital, as well as Blumberg Capital, Correlation VC and PnP Ventures. The company said the funding will help speed development and take the app to one million users within a year. Nachman added that the company also plans on raising an additional $20 million later this year to help reach that goal.
Jassby is headquartered in Waltham, Massachusetts, and was founded in 2018. Last fall, the company announced a partnership with Needham Bank to enable banking services for users of its family financial app. The fintech has also teamed up with Boston Siege Football club, signing on the semi-pro soccer club as a corporate sponsor. Boston Siege began wearing Jassby’s logo on its kits and training gear last year. The two organizations are planning on a project involving the club’s payment and revenue infrastructure in 2020.
Chinese conglomerate Ant Financial has purchased a minority stake in Sweden’s e-commerce payments innovator Klarna. The terms of the investment were not disclosed, but the company said that the funding amounts to a 1% stake in Klarna. The most recent assessment of Klarna, based on a $460 million funding round in 2019, puts the company’s valuation at $5.5 billion.
“Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy,” Klarna CEO Sebastian Siemiatkowski said. “We are delighted in this confidence shown in Klarna in defining the future of payments and shopping and are very much looking forward to working together further in the future.”
The investment comes as a tonic in the wake of Klarna’s first annual loss of $113 million in 2019. It also represents a deepening of the partnership between the two firms that will make more of Klarna’s buy now pay later solutions available to consumers and merchants in the Alibaba ecosystem. This includes more integration between Klarna and Alibaba’s Alipay which, via AliExpress, Alibaba’s retail online marketplace, leverages Klarna’s e-commerce solution.
“At the heart of this cooperation between Klarna and Alipay is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world,” Siemiatkowski said.
More than 200,000 merchants and e-commerce platforms around the world are powered by Klarna technology. The company’s partners include IKEA, Adidas, Spotify, and Expedia Group, among many others, and in 2019 alone, Klarna added more than 75,000 new merchants to its platform. Founded in 2005 and a Finovate alum since its debut at FinovateSpring in 2012, Klarna has 2,700+ employees and is live in 17 countries. Late last month, the company announced that Klarna had reached the seven million customer milestone and 1.6 million app downloads.
Investment research firm Morningstar announced today it has agreed to acquire PlanPlus Global, a Canada-based financial planning software firm that was founded in 1990.
The Chicago-based company is eyeing PlanPlus Global not only for its financial planning and risk profiling software but also for its geographic location. Morningstar, which just months ago agreed to buy Australia-based AdviserLogic, has been seeking to expand its financial planning services to advisors across the globe.
Morningstar Canada President and CEO Scott Mackenzie said, “This is an investment for growth in the financial-planning arena, and we look forward to the rich expertise and long-standing relationships PlanPlus Global employees will bring to the Morningstar family.”
Morningstar will offer PlanPlus Global’s FinaMetrica Profiler as a standalone product but will also integrate it into its existing solutions, including Morningstar Advisor Workstation and Morningstar Enterprise Components. Morningstar will also use PlanPlus Global’s financial-planning solution, ProPlanner, to bolster its current offerings in Canada.
“When it comes to finding a large, strategic fintech partner that can help us scale our solutions in the marketplace and enhance the value to our users globally, Morningstar is the perfect fit,” said Shawn Brayman, founder and CEO of PlanPlus Global. Brayman and his team of 40 employees will join Morningstar’s workforce of 5,230.
Terms of the deal, which is expected to close next quarter, were not disclosed.
Digital financial services company Wirecard is partnering with Xolo (formerly LeapIN) this week to offer a more robust set of banking services for gig economy entrepreneurs.
Under the agreement, Xolo, a platform that helps entrepreneurs launch and run micro-businesses, will bolster the banking and accounting tools on its existing platform. The company will leverage Wirecard’s banking license to allow its 30,000 users to open a business bank account online within 48 hours, receive a debit card, and monitor their banking, tax, and compliance activity.
The move targets gig economy workers, an underserved segment of the population that is growing at 17% per year with an estimated value of $204 billion in 2018.
“This new partnership marks a significant step for Xolo as we strive to establish a new virtual nation for freelancers and solopreneurs,” said Allan Martinson, Xolo CEO. “With the addition of Wirecard’s pioneering digital banking solution, we will continue to build out our vision for enabling millions of micro-businesses to get to market quicker and without the bureaucracy.”
Xolo’s news follows a recent announcement last month from U.K.-based Wollit, which raised funding for its platform that helps gig economy workers smooth out their fluctuating cashflow. There is a significant lack of services for this consumer segment across the globe, but startups and challenger banks have been slowly filling the gaps that banks have left open.
Google Cloud has unveiled its latest data center and announced that PayPal will be among the first to move key components of its payments infrastructure to Google’s cloud region. The news is the latest example of a partnership between the two technology giants that extends back at least as far as 2017, when PayPal became an authorized payment method for Android Pay (which later became Google Pay).
The new cloud region, Google’s 22nd globally, will be based in Salt Lake City and is designed to provide customers in the western U.S. with better, more reliable cloud services.
“When it comes to processing a financial transaction, security and speed count,” PayPal VP for Employee Technology & Experiences and Data Centers Dan Torunian said. He added that Google Cloud will provide PayPal with the “security, quality, and velocity” it needs, particularly when it comes to managing seasonal payment transaction volume surges and keeping regional expansion costs low.
In fact, PayPal reportedly chose Salt Lake City in part for low-latency access to its own data center, which will make it easier for PayPal to commit additional resources to the cloud over time. The partnership will also allow PayPal to establish a migration pattern that can be used to convert more on-premises infrastructure to the Google Cloud – at the Salt Lake City data center or to any other Google Cloud platform region.
More than 300 million consumers and merchants in 200 markets use PayPal’s payments technology for financial services and commerce. The San Jose, California-headquartered company began the year forging a strategic partnership with UnionPay International that will boost its merchant and consumer business in the Chinese market. PayPal reported adding more than 37 million net new active accounts last year, processing “nearly $200 billion” in total payment volume in the fourth quarter alone.
Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.
“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”
Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.
Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.
Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.
“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.
ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.
Here is a round up of recent news from our Finovate alumni.
Sezzleunveils new logo along with its first annual report.
Flybitsexpands its executive team in New York, Toronto, the U.K., and Dubai.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capitalappoints Kevin Fink at CTO and Patricia Elliott as CSO.
InCommlaunches Roblox gift cards in France and Germany.
Finovate Alum Features and Profiles
Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.
Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.
Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.
Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?
Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.
Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.
SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.
Customer segmentation identification company SheerIDlaunched its Employment Verification tool today in 191 countries. The move enables brands to identify and acquire new customers across the globe.
SheerID’s segmentation tool enables companies to identify consumer subsets such as military members, students, and teachers to help personalize communications and increase customer acquisition via gated, personalized offers for different employee groups. Today’s geographical expansion of SheerID’s technology will help brands build their acquisition efforts on a global scale.
Along with employment verification, SheerID has updated its age range verification tool, which is available in 23 countries. With this offering, brands can more efficiently target consumer groups such as seniors and young adults.
“With this latest expansion of verification types, we’re making it easy for brands to extend their identity marketing campaigns beyond the U.S. and personalize offers in new ways, to new potential customers,” said Jake Weatherly, SheerID CEO. “The opportunity to use personalized offers to acquire consumer tribes is endless, and this latest expansion is yet another step forward in meeting customer demand.”
SheerID leverages 9,000 data sources and 1.3 billion identity attributes. Among the company’s clients are Amazon, Lowe’s, Spotify, and T-Mobile. SheerID, which recently showcased at FinovateSpring 2019, has raised $96 million since it was founded in 2011.
