U.S. Department of Justice Green Lights Mastercard’s Purchase of Finicity

It’s been a tough few weeks for Big Fintech. The Chinese government is dropping the hammer on Ant Group’s IPO. The U.S. Department of Justice is turning up its nose at Visa’s Plaid acquisition.

But, meanwhile over at Mastercard, it is quite the sunny Monday, indeed.

Why? Because the same DOJ that is giving Visa a hard time has granted rival Mastercard the all-clear to pursue its big acquisition: a $825 million deal for real-time financial data and analytics provider Finicity.

“We are pleased to have reached this milestone,” read a statement from Mastercard Monday morning. “The acquisition of Finicity accelerates our open banking strategy and strengthens our ability to offer consumers and businesses more choice in how they pay and how they simplify their lives and maximize their financial relationships.”

Announced in June, the acquisition was heralded by Mastercard as a way for the company to take advantage of global opportunities around open banking. Calling it a “strategically important space,” Mastercard President Michael Mieback said in June that Finicity shared Mastercard’s “commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used.”

Powering solutions from Experian Boost Quicken’s Rocket Mortgage, Finicity offers financial data APIs, credit decisioning technology and financial wellness tools to financial institutions and fintechs. Founded in 2000 and a Finovate alum since 2014, the company won API World’s Finance API of the Year award in 2016 for its TxPush-compliant real-time aggregation service, a technology Finicity unveiled at our developers conference, FinDEVr New York, that year.

In the months since the acquisition was announced, Finicity has continued to innovate and partner with banks and other FIs to help them make better use of their data. Earlier this month, Finicity finalized a data access agreement with BMO Harris Bank. Back in September, in addition to announcing the direct data agreement it forged with Charles Schwab, Finicity launched its next-generation credit decisioning solution, Finicity Lend. The new offering provides banks, lenders, and fintechs with an integrated set of open banking data services that enable borrowers to directly permission data and insights into lending decisioning processes.

“Big news!” Finicity tweeted later this morning. “This DOJ approval brings Finicity one step closer to joining the Mastercard family. It would be an understatement to say we’re excited to become part of Mastercard’s mission to improve financial health and inclusion around the globe.”

Finicity Launches Open-Banking- Friendly Underwriting Tools

Finicity is unveiling a new tool set this week. The new solution, Finicity Lend, promises to accelerate lenders’ decisioning processes by tapping into the power of open banking.

The tools will help lenders with the credit decisioning process by enabling prospective borrowers to permission their data to be used during underwriting. Ultimately, Finicity anticipates the consumer-provided data will offer lenders data in real-time and lead to more accurate decisions.

“Our new Finicity Lend integrated solution set will complement the current credit rating system while leveraging the tremendous advantages of open banking to create an industry standard for assessing a borrower’s ability to manage a loan going forward,” said Finicity CEO and Co-founder Steve Smith. “Real-time, permissioned data from multiple financial accounts is the lifeblood of our secure open banking platform, and empowers consumers to make better financial decisions, to mitigate risk for lenders and can increase overall financial inclusion.”

Along with the data permissioning aspect of Finicity Lend, the toolset offers a host of other capabilities. Among those are Cash Flow Analytics, CRA Data Services, and Payroll Data, which leverage the data intelligence layer of the company’s open banking platform.

Cash Flow Analytics uses an automated process to look at an applicant’s financial account data to glean insights about their cash flow. Finicity has positioned itself as a Consumer Reporting Agency (CRA) to ensure that the consumer-permissioned data meets the legal requirements of the Fair Credit Reporting Act. The move also places more control in the hands of the customer by offering them the ability to review, dispute, and correct any inaccurate information. Finally, the company has added ADP as a payroll data source to enhance its ability to verify income and employment details (with the prospective borrower’s permission, of course).

Placing the consumer in control of their data is one of the core principles of the open banking initiative. Finicity has always been a proponent of open banking. The company is a founding member of the Financial Data Exchange (FDX), an organization that helps establish industry standards for open banking in North America.

Earlier this year Finicity agreed to be acquired by Mastercard for $825 million. The deal has yet to be finalized.

Photo by Felix Mittermeier from Pexels

Mastercard to Acquire Finicity in $825 Million Deal

For a year that began with Visa’s headline-making acquisition of Plaid, it seems almost poetic that near 2020’s midway mark, Mastercard would make a major fintech bid of its own.

The company has agreed to acquire Finicity, a real-time financial data and analytics provider and long-time Finovate alum, in a deal valued at nearly $1 billion. This figure represents a combination of the $825 million purchase price of the Salt Lake City, Utah fintech, as well as a potential earn-out for Finicity’s existing shareholders – subject to the company meeting certain performance targets.

“Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organization that empowers consumers and organizations to better understand, manage, and use their financial data to improve their financial lives,” Finicity co-founder and CEO Steve Smith said. “Enabling people to access and control their data, while ensuring best practices to protect that data, will continue to drive tremendous innovation that increases financial literacy, inclusion, and health. This partnership with Mastercard helps us accelerate this mission globally.”

Mastercard President Michael Miebach cited open banking as one of the reasons for the company’s interest in Finicity. Referring to open banking as both a “growing global trend” and a “strategically important space,” Miebach praised Finicity’s ability to leverage open banking APIs to enable financial data and insights to streamline lending and mortgage processes, account-based payment initiation, and other PFM services. He also credited the company for its focus on the data rights of the consumer.

“(Finicity) shares our commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used,” Miebach said.

Founded in 2000, Finicity provides financial data APIs, credit decisioning tools, and financial wellness solutions that help financial institutions and fintechs better serve their customers. The company’s technology helps power solutions like Experian Boost and Rocket Mortgage from Quicken Loans. Named a Best Place to Work in Fintech by American Banker for the last three consecutive years, Finicity began 2020 partnering with SaaS-based marketing automation, CRM, and POS solution provider for banks and mortgage companies, Volly.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finicity’s AssetReady Reports Accelerate the Prequal Process

The new prequalification solution from Finicity will make it easier for lenders to qualify borrowers and improve the quality of the sales funnel for loan officers. The company’s AssetReady Report leverages consumer-permissioned data to identify a borrower’s assets during the prequalification process. This, as Finicity CEO Steve Smith explained, makes data available to lenders sooner “than ever before,” and paves the way for more personalization and customization in the borrowing process “from first interaction to close.” Finicity said its new offering provides a single-source solution for borrower verification that enhances lender workflow and maximizes ROI.

With the AssetReady Report, lenders will be able to access data like account balances without having to request personal borrower information such as a social security number or date of birth. Once qualified, borrowers can easily permission their data for Finicity’s verification solutions that leverage asset and employment information to continue the loan origination process.

The report features current account balances, as well as average balances over the past two and six months. AssetReady Reports also include any negative balances from the past six months and the most recent negative balance.

In the announcement, Lender Price CEO Dawar Alimi and Union Home Mortgage President and CEO Bill Cosgrove praised the prequalification solution for its ability to deliver “high-value data … earlier in the origination process,” and for its ability to work seamlessly with other Finicity verification solutions. “A single-source solution provider is a great fit for our business model,” Cosgrove said.

Finicity demonstrated its credit decisioning solutions at FinovateFall 2017. Headquartered in Salt Lake City, Utah, the company more recently launched its Verification of Income and Employment (VOIE) offerings which enables lenders to accelerate verifications via bank data and a scan of the borrower’s pay statement. This summer, Finicity introduced its Student Loan Account Verification solution, which helps streamline the verification process for employers who offer student loan repayment assistance programs.

Founded in 1999, Finicity has forged a variety of partnerships this year. The real-time financial data and insights company announced a collaboration with Pulte Mortgage this spring, teamed up with LendingQB over the summer, and last month partnered with American Financial Resources. Finicity has raised more than $79 million in funding from investors including Experian Ventures and Bridge Bank.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finicity Launches Verification of Income and Employment Solution

Real-time financial data access and insights company Finicity has unveiled its latest solution to accelerate the lending process and further the trend toward digitization in the mortgage industry. This week, the company launched its Verification of Income and Employment (VOIE) solution, which leverages bank data and a scan, photo, or PDF of the borrower’s pay statement to make borrower verifications both faster and more accurate. In its statement Finicity noted that VOIE is expected to successfully provide coverage of more than 70%. This compares favorably to the accuracy rates of existing automated solutions, which top out near 25%.

Calling Finicity’s VOIE “the new gold standard of income and employment verification,” company CEO Steve Smith suggested the technology would be a significant new resource for lenders. “We know it will be met with fast adoption by key industry players who aim to be on the cutting edge of lending technology,” he said, adding “(with) VOIE building upon our current Verification of Assets solution, lenders will now be able to use Finicity as a one-stop-shop for digital verification.”

Appreciation for Finicity’s VOIE solution has already been heard from the likes of major mortgage industry players such as Freddie Mac, Quicken Loans, and Experian – all of which have leveraged Finicity’s technology to automate the manual processes that have historically made the loan origination experience cumbersome for all parties involved.

Freddie Mac, for example, highlighted the contribution Finicity’s VOIE would bring to its own asset and income modeler (AIM). “(Our) partnership with Finicity has helped to create a waterfall-like approach by adding paystub data to our AIM capability using accurate and verifiable data that meet our underwriting standards,” Senior Director of Technology Integration at Freddie Mac Kevin Kaufman said. “This means more opportunities for representation and warranty relief and greater costs savings for lenders all while delivering a better lending experience to borrowers.”

Quicken Loans EVP of Client Experience Heather Lovier echoed Kaufman’s praise for the technology, referring to VOIE as “a critical next step in the evolution of the mortgage process.”

The news of Finicity’s Verification of Income and Employment solution comes one month after the company introduced its Student Loan Account Verification solution. This technology enables employer repayment programs to access Finicity’s ACH endpoint to confirm the accuracy of accounts and routing numbers when making loan payments on behalf of their employees. Fellow Finovate alum Vault is among the companies to have partnered with Finicity in order to put the technology to work on behalf of employer-based student loan contribution programs.

Founded in 1999 and headquartered in Salt Lake City, Utah, Finicity demonstrated its credit decisioning solutions – including its Verification of Income (VoI) and Verification of Assets (VoA) technology – at FinovateFall 2017. The company has raised nearly $80 million in funding, and includes Experian Ventures and Bridge Bank among its investors.

Earlier this year, Finicity inked a major partnership with Ellie Mae, integrating its Verification of Assets solution into Ellie Mae’s Encompass Digital Lending Platform. This makes Finicity’s technology available to the more than 230,000 users and thousands of providers who, as part of Ellie Mae’s partner network, process “approximately one-third” of all the residential loans originated in the U.S.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finicity Launches Student Loan Account Verification

With more employers helping their employees repay their student loans these days, the launch of Finicity’s Student Loan Verification solution means those employers will soon be getting some help of their own.

The new product unveiled this week will enable employer repayment programs to access Finicity’s ACH endpoint to confirm accounts and routing numbers when making student loan repayments on behalf of their employees. Student Loan Verification leverages Finicity’s embeddable web app, Finicity Connect, to provide an intuitive user experience for the employee and ensure an easy integration with student repayment platforms for the employer.

“Student loans have become a major concern for individuals and families, with three out of four graduates burdened by debt,” Finicity COO and President Andy Sheehan said. “We are excited to contribute to an emerging trend in employer contributions to student debt by delivering a solution that eases the process and increases efficiency.”

Among the companies to take advantage of the new offering is fellow Finovate alum Vault. The company, which demonstrated its technology as Student Loan Genius at FinovateSpring 2016, has partnered with Finicity to add Student Loan Verification to its employer-paid student loan contribution solution.

“Companies are rapidly evolving their benefit offering to meet the needs of the modern workforce,” Vault CEO Matt Beecher said. “We chose Finicity to enhance our user experience within our student loan repayment benefit because of the technology’s superior coverage and capabilities.”

This week’s product release follows news of the Finicity’s big partnership with Ellie Mae, announced two weeks ago. This integration makes Finicity’s Verification of Assets (VoA) solution available via Ellie Mae’s Encompass Digital Lending platform. Ellie Mae has more than 230,000 users and thousands of providers in its partner network. Like Vault, Ellie Mae is also a Finovate alum, having demonstrated its Encompass Consumer Connect and Encompass Developer Connect offerings at FinovateSpring 2017.

“With the integration of Finicity’s digital Verification of Assets through our Encompass Digital Lending platform, we are further enabling loan officers, processors, and other key lender participants to reduce cycle-times and offer a more complete digital mortgage experience for their customers,” SVP of Business Development for Ellie Mae Parvesh Sahi said when the integration was announced.

Founded in 1999 and based in Salt Lake City, Utah, Finicity made its most recent Finovate appearance at FinovateFall 2017, where the company demonstrated its credit decisioning technology. This year, it addition to its partnership with Ellie Mae, Finicity announced it was teaming up with LendingQB who will leverage Finicity’s Verification of Assets solution to accelerate loan processing and enhance the user experience for borrowers. In April, Finicity announced an integration with Pulte Mortgage, which will also use the company’s VoA solution to speed the home financing process.

Finicity has raised $79.9 million in funding. The company includes Experian and Bridge Bank among its investors. Co-founder Steven Smith is CEO.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finicity and LendingQB Partner to Accelerate Mortgage Origination Process

Faster loan processing and a better experience for mortgage borrowers is the goal of the new partnership between Finicity and SaaS loan origination technology solution provider LendingQB, which has integrated Finicity’s digital Verification of Assets (VoA) solution into its platform.

Demonstrated at Finovate two springs ago as part of Finicity’s growing inventory of credit decisioning solutions, Verification of Assets leverages consumer-permissioned transaction data to help lenders spot underwriting factors that can shave as many as six days off the typical mortgage origination timeline. The solution delivers reports in 30 seconds or less, and can be refreshed during the origination process.

“Digitizing the loan origination process is the key to the future of lending,” Finicity CEO Steve Smith said. “We’re proud to be one of the tech providers behind this movement and are glad to work with leading digital loan originators like LendingQB to help the industry evolve and improve the experiences for lenders and borrowers alike.”

Tim Nguyen, CEO of LendingQB’s parent company, MeridianLink, put the partnership in the context of the company’s determination to remain at technology’s cutting edge for the sake of all parties in the mortgage journey. “At LendingQB, we pride ourselves on our ability to seek out the best technology and partnerships to combine with our solution,” Nguyen said. “This creates a competitive advantage for lenders that delivers a more meaningful experience to the people that really matter: borrowers.”

Founded in 2011, LendingQB helps companies build digital mortgage solutions with its browser-based loan origination system and open API integrations to 300+ vendors and services. The company, which is headquartered in Costa Mesa, California, inked a deal with CoreLogic in June and, in April, was named to the HousingWire Tech100 for a second consecutive year.

In addition to Verification of Assets, Finicity also offers Verification of Income (VoI) as part of its suite of credit decisioning solutions. VoI provides confirmation on up to 24 months of historical income, and features confidence scores on income streams to help anticipate future income. Detailed information from both VoA and VoI is available via the company’s Finicity Reports.

Finicity most recently made fintech headlines when it announced its partnership with Pulte Mortgage this spring. Named one of the Best Fintechs to Work For by PaymentsSource at the beginning of the year, the Salt Lake City, Utah-based fintech has raised $79.9 million in funding and counts Experian Ventures and Bridge Bank among its investors.