German banking service provider Figo and fintech platform Finreach Solutions plan to merge into one company, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

The merger is subject to the approval of the Federal Financial Supervisory Authority (BaFin). The duo says their consolidation is the logical result of a pre-existing, long-lasting partnership.

“With our consolidation, we are responding to the growing market need for specific applications that go beyond data connectivity. Our goal is to become the leading fintech platform that delivers high quality [Software-as-a-Service] SaaS applications and API solutions – pan-European and PSD2-licensed,” said Markus Dränert, CEO of Finreach Solutions.

In the CEO role, Dränert will lead the company, which will merge gradually over the course of 2019, together with Cornelia Schwertner, chief risk officer (CRO) of Figo, and Taner Akcok, chief product officer (CPO) of Finreach.

André M. Bajorat, the CEO of Figo up until now, will soon join the supervisory board of the new company. He will also bolster the team at Finleap, a fintech ecosystem in Europe, where Finreach was developed.

As a lead investor, Finleap will also invest a “seven-digit sum” to finance growth.

Both company locations in Berlin and Hamburg will be maintained, as well as the respective teams. Dränert says the new team size will be about 90 employees.

FinTech Futures contacted the two firms to find out what the name of the combined entity will be.

A spokesperson said: “As of today, only the foundation for the merger is laid and the process of growing together just begins. This also means, that there has no decision been made concerning the company name yet.”

Figo demonstrated its technology at FinovateEurope 2013. The company was founded in 2012.

Deutsche Börse and its post-trade services provider Clearstream will partner with Germany’s figo and Luxembourg-based regtech start-up Finologee to create a fintech acceleration platform, reports Antony Peyton of Fintech Futures, Finovate’s sister publication.

The new platform will enable established players and new digital firms to distribute and use each other’s services to ideally make more money.

It will allow access to Deutsche Börse’s market and reference data as well as functional services via APIs.

Marc Robert-Nicoud, CEO of Clearstream, said it brings together the “know-how and innovation capacity of an established market infrastructure with the innovative models and flexibility of strong fintech start-ups” and “can contribute immensely to developing new interaction, collaboration and monetization models”.

The first services offered by third parties will be an access to account gateway for banks for the second Payment Services Directive (PSD2).

Deutsche Börse has been cooperating with banking services provider figo since 2016.

The new partnership with Finologee is targeted to serve particularly the Luxembourg market with the “first end-to-end PSD2-compliant payment solution”. In addition, Finologee will contribute to the architecture and development of the platform software layers as well as further partnerships.

Clearstream contributes its IT infrastructure design and regulatory compliant operations, as well as several software components to run the API marketplace for Deutsche Börse.

First deployments on the platform are currently being evaluated. Among them are a number of offerings, including Budget Insight, IDnow, AriadNEXT, Governance.com, Jemmic, and KYCTech.

The platform is in the pilot phase and will be first offered as a development environment to allow testing and coding.

Further applications at this piloting stage will be Finologee’s identification and consent automation product.

Figo expands the portfolio with its PSD2-related RegShield for non-banks and PSD2 enabler for banks as well as several Clearstream and Deutsche Börse services.

The launch is targeted for the fourth quarter of 2018, subject to regulatory approval.

Founded in 2012 and headquartered in Munich, Germany, figo demonstrated its banking and payments API at FinovateEurope 2013. figo has raised more than $11 million (€10.1 million) in funding. Andre Bajorat is co-founder and CEO.

German banking service provider figo has joined the fight to ensure that fintechs and other third parties are able to make the most from the arrival of PSD2. The company announced its new “license as a service” solution – RegShield – which will enable figo to serve as a regulated partner for firms looking to offer or use payment initiation account information services (PSIP/AISP). This will allow figo’s partners to operate without having to apply for their own authorization.

Before the PSD2 deadline earlier this month, Cornelia Schwertner, Head of Governance, Risk & Compliance at figo warned, “Implementation of PSD2 is imminent and the license application period for companies is tight. So it is particularly alarming that many companies do not even know that they will soon be subject to authorization, let alone when. Importantly, Schwertner added, PSD2 implementation is a challenge for both fintech startups and more established players. For newer companies, the process of securing a BaFin permit can challenge the financial resources of smaller firms. Larger companies, on the other hand, typically find it difficult to integrate their own processes with a changing regulatory environment.

With RegShield, figo takes responsibility for “all relevant processes and licensing requirements,” giving third parties the ability to focus on developing their solutions rather than negotiating regulations. RegShield will provide for many of the authorization requirements including:

• PSD2-compliant customer processes
• Execution of internal audits to prepare for external examinations
• Setup of governance and security policies
• Management of security incidents
• Regulatory and compliance expertise
• Outsourcing controlling
• Business continuity management

According to figo, more companies may be affected by the need to meet these requirements than they may think. In Germany, for example, companies looking to offer services this year are required to apply for authorization as PISP or AISP under the Payment Services Supervision Act (ZAG). And this is precisely where figo’s RegShield can play a role.

“Being touched by authorization requirements is a certainty for any company that can answer the following questions with a yes,” figo CEO André M. Bajorat said. “‘Do I offer an online service that includes display or processing of account information?’ ‘Does my service enable transactions on my customers’ bank accounts?’ or ‘Do I need online banking login information for my product or service?'” Find out more about figo’s RegShield offering.

At FinovateEurope 2013, figo demonstrated its consumer-facing, cloud-based service that aggregates bank and payment accounts, enriches transaction data and gives customers real-time notification. The company’s technology complements the rise of open banking by making it easier for third parties to access a wider range of financial resources, and enabling banks to develop value-added products and services for their customers.

“The tried and true technical solutions which we already offer, which preeminently match up to the basic idea of PSD2, show how forward-looking our approach is,” the company observes in an introductory note on its website.

Last August, the company announced that Consorsbank would leverage technology from figo to power its multibanking service. In June, figo was named to FinTechCity’s FinTech50 for 2017. Founded in 2012, the company has raised more than $12.5 million in funding and includes Berliner Volksbank Ventures and Deutsche Borse among its investors.

While the amount of the investment remains undisclosed, German banking-as-a-service specialist Figo this week announced it had completed a “seven-figure” funding round.

Participating in the investment were High-Tech Gruenderfonds (HTGF), 360T founder Carlo Koelzer, and Joerg Heilig, VP of Engineering at Google.

Figo GmbH CEO Andre M. Bajorat said the investment would help the company gain European market share and support further product development. CFO Heiko Rahlfs emphasized that the investment would bring both technical talent and industry connections to the company. “In addition to Joerg Heilig’s expertise,” Rahlfs said, “we can benefit from Carlo Koelzer’s network and his reputation in the fintech sector.”

Figo founder Markus Ludemann demonstrated the figo-API at FinovateEurope 2013 in London.

Koelzer praised the way Figo leveraged regulatory changes to provide “not only an established banking API, but also an entire banking services platform, supporting a vast number of innovative banking solutions.”

“I believe in the significance and the positive impact of the change in this sector,” Koelzer said. “Hence my decision to invest.”

Calling itself the first banking service provider in Europe, Figo provides an API that integrates readily with third-party systems, enabling businesses to connect their goods and services to more than 3,000 banks and financial service providers. The banking-as-a-service platform connects services to more than 50 million online banking accounts.

Figo demonstrated its API at FinovateEurope 2013 (as Lean Banking), before pivoting to focus on B2B solutions. Founded in August 2012, Figo is headquartered in Hamburg, Germany.