The Finovate Fintech Halftime Review eMagazine

What a week it was for the first Finovate Fintech Halftime Review; we heard from experts across the fintech spectrum, covering LendingTech, PayTech, FraudTech, BankingTech and WealthTech.

Missed some of the live sessions? Want to dig a little deeper and get the Finovate Analyst view of the first half of 2020? Well look no further, as the Finovate Fintech Halftime Review eMagazine brings all the content from the week together in one place.

Download it now and have all the latest insights at your fingertips.

Mastering Digital Collaboration in the Financial Industry

Financial organizations are managing mass amounts of information on a daily basis. 

Whether it’s a loan application, credit approval, or new customer records, sharing documents securely is key for effective task completion and departmental collaboration. 

With a variety of document formats needed for each of these tasks, professionals must often switch from application to application to complete processes. Standard processes are often outdated and inefficient. 

Discover how financial organizations can streamline their workflows and collaborate more effectively within their current applications.

Read the Accusoft infographic to learn more.

MyLife’s Jeff Tinsley on Creating a “Reputation Score” and the Future of Personal Data

MyLife’s Jeff Tinsley on Creating a “Reputation Score” and the Future of Personal Data

It’s the FraudTech day of the Finovate Fintech Halftime Review, and we welcome Jeff Tinsley, CEO of MyLife to talk fraud management and prevention and how MyLife can be used by financial institutions to educate and add value for their consumers.

David Penn, our own Finovate Analyst, asks what sort of things go into creating a Reputation Score, and how MyLife protects people from fraud?

Watch the full interview.

Find out more about MyLife and get in touch with Tim ( for any questions or partnership inquiries.

ITSCREDIT’s João Lima Pinto on the Genie Advisor App and a New Direction for 2020

ITSCREDIT’s João Lima Pinto on the Genie Advisor App and a New Direction for 2020

As part of our Finovate FinTech Halftime Review, Finovate Analyst David Penn sat down with João Lima Pinto, Chairman of ITSCREDIT. With nearly 20 years of solid experience in the financial sector, actively participating in the design and implementation of innovative omnichannel and credit solutions, Pinto has garnered much success by leading a variety of business development, product and project management, business analysis, and product operations functions.

Among the topics discussed include ITSCREDIT’S Genie Advisor app, how the company has seen the COVID-19 crisis impact its customer base, and its plan to address the challenges and move forward in 2020.

Watch the full interview now.

COVID-19 and the Fight Against Cyberfraud

Crises, such as the current coronavirus pandemic, often bring out the best in us. But troubled times can also provide opportunities for unscrupulous and malevolent actors to take advantage of people’s anxieties and fears.

The hoarding of personal protective equipment that occurred early in the coronavirus crisis and the spread of crazy conspiracy theories about the origins of the virus have helped create a climate of fear and suspicion. This can make dealing reasonably and confidently with the crisis that much more challenging for all of us.

Unscrupulous and malevolent actors are also taking advantage of people’s financial anxieties and fears during this time. Our Fraudtech Digital Day – part of Finovate Fintech Halftime Review – will take a close look at how the cybersecurity threats before the crisis struck have intensified in many ways in the weeks and months since.

How big is the current cybersecurity problem for financial services firms and their customers? What technologies are being deployed to help financial firms and other businesses stay one step ahead of the fraudsters? How can businesses defend themselves against fraud while still providing the kind of seamless, digital experience consumers demand? These are some of the topics we’ll discuss as part of our FraudTech Digital Day.

To whet your cybersecurity whistle, we’re sharing excerpts from our conversation earlier this month with BioCatch co-founder and Chief Cyber Officer Uri Rivner. We spoke with Mr. Rivner about the new threats to cybersecurity that have arisen with the global public health crisis of COVID-19.

“Fraud isn’t going away and, in fact, we anticipate a surge in account takeover activity as criminals scale up their cash-out operations,” Rivner said. “They already have the data they need to steal more money, but they need to scale their infrastructure.”

BioCatch specializes in providing behavior-based authentication and threat detection solutions. Headquartered in New York and Israel, and founded in 2011, the company demonstrated its Passive Biometrics/Invisible Challenge technology at FinovateFall. BioCatch’s platform analyzes 2,000 behavioral parameters based on user-device interaction, and leverages this data to build real-time risk scores that provide continuous authentication and a superior defense against account fraud, social engineering scams, and more.

“We’ve taken a scientific field in cognitive studies, something that was working in the lab, and made it extremely practical for use in solving the biggest issues in online fraud,” Rivner explained. “(A)cross dozens of banks, credit card issuers and companies outside the financial sector, (we are) protecting over 100 million online and mobile users. We’ve tackled issues that were initially deemed impossible to solve.”

Here are some key takeaways from our conversation.

On the threat of increased fraud and cybercrime during the pandemic

If I had to pick one community that is definitely going to thrive during a global virus outbreak, it’s online fraudsters. They have a golden opportunity to scale their operations while entire companies move their fraud operations and analytics teams to a work from home model, which is not an easy process for, say, a major bank. 

On the danger of identity theft and why behavioral-based authentication is key to fighting it

The most scalable fraud operation is opening credit card or personal loan accounts. All you need is to buy a bigger list of stolen identity records, and have a team of people opening accounts in other people’s names. Identity theft is reported to sky-rocket, and it can be quite dangerous, especially if it’s a new digital service that is launching these days. If a new digital service is targeted by a massive campaign, there will be more fraud applications than real applications – that’s disastrous.

Traditional defenses such as checking KYC (know your customer) data and device recognition no longer hold, and new technologies such as behavioral biometrics are used to stop such fraud campaigns and reduce false rejections due to high security bars.

On the role of enabling technologies and “the right kind of AI” to help fight fraud

Machine Learning can instantly look at thousands of features, resulting in an extremely accurate model that predicts fraud and can adapt itself when cyber criminals change their strategy. At BioCatch we have over 2,000 such features.

An important consideration though is that some machine learning models are a black box and don’t really provide insights into why a certain action is risky. BioCatch, for example, uses Explainable AI models to make sure customers can get the reasons why a score was high, as well as many negative and positive behavioral factors observed during a session. 

Read the rest of our conversation with Uri Rivner. And learn more about how to join us for our Finovate Fintech Halftime Review at our digital event hub.

Fintech Halftime Review: Rewinding, Assessing, and Looking Forward

2020 has been quite a year. No one could have predicted the strides the fintech industry has made in digital transformation, the dramatic change in the way consumers use physical bank branches, or the shift in attitudes toward mobile payments.

Because taking in all of the changes over the past six months is a monumental task, we thought we’d help out. The Finovate Fintech Halftime Review, took place June 22 through June 26, and was a free, week-long digital event comprised of webinars, videos, whitepapers, eMagazines, and more. We covered a new topic each day, and the webinars are now available to watch below.

Supporting Stimulus Lending Programs with Appian

Driving Higher Close Rates, Faster Closes, and Higher Customer Loyalty with Glance 

Looking Under the Hood of Today’s Payments Ecosystem with Fiserv 

Optimizing your IT Infrastructure for Fintech with Cyxtera

Rethinking Traditional Wealth Management Services with Aixigo 

Thanks to our partners aixigo, Fiserv, Glance, ITSCREDIT, MyLife, Cyxtera and Appian for providing their support and expertise.

Photo by Icons8 Team on Unsplash

COVID-19 and Fintech’s Venture Capital Crunch

Photo by Marta Branco from Pexels

How has COVID-19 impacted fintech funding in the first half of 2020?

Writing about fintech funding in the first quarter of 2020, CB Insights painted a bleak picture of how the global health crisis and its economic effects have put a pall on VC investment in fintech around the world. 

“Worst first quarter for funding since 2017…” “Worst first quarter for deal volume since 2016 …” Across the globe, venture capital investors were on the retreat with only Europe showing significant quarter over quarter growth – thanks largely to the $500 million investment secured by Revolut.

And as the appetite for risk waned, so did interest in smaller fintech startups. CB Insights noted that early stage startups were among the hardest hit in the first quarter, with this subset of companies falling to a nine-quarter low in funding and a 13-quarter low in deal volume.

The struggles of the first quarter of 2020 – when the lockdowns, shelter-in-place, and quarantines were implemented – had reduced much of economic activity to a trickle. With Q2 all but wrapped up – and countries around the world beginning, some more tentatively than others, to reopen their economies – are venture capital investors proving more ready to return to the table?

What were expectations for 2020?

Although VC investment in fintech was down modestly from 2018, last year featured more than enough fundraising to give fintech observers confidence that 2020 could still be a strong year. Again, using CB Insights’ figures, fintech investment pulled back to $33.9 billion in 2019 from $40.8 billion in 2018, with deal volume easing to 1,912 deals in 2019 from 2,049 deals in 2018. Early stage investment declined from a peak in Q1 2018, en route to the 13-quarter low noted above. But investment in more mature startups, Series B and beyond, was strong, with deal volumes reaching their highest levels in five years.

Articles like “Fintech Startups Got All the VC Love in 2019” were also indicative of the general optimism fintech observers felt headed into 2020. Major merger and acquisition deals like Add to this the enthusiasm engendered by major merger and acquisition deals like Fiserv and First Data, and Worldpay and FIS added to the enthusiasm. When combined with the rise of digital banking and regtech, and the addition of 12 new fintech unicorns in the U.S., the conclusions reached by KPMG late last year in its Pulse of Fintech report for the second half of 2019 seemed perfectly sound.

“Fintech investment is well-positioned to grow in 2020,” the report noted, “particularly with the growing proliferation of fintech hubs globally, not to mention the ever-widening scope of fintech offerings.”

How have these expectations played out? Who has benefitted most? 

While fintech VC funding in the first half of the year has struggled, there are signs that this slowdown may be a function of trends that began before the pandemic hit. The second quarter – when quarantines were the case in much if not most countries – did not lack for big fintech deals; Stripe’s $600 million extension of its Series G round in April rivals the $500 million raised by Revolut in February. Micro investment platform Stash scored $112 million in funding in April, as well. Payments company Marqeta announced a $150 million investment – and $4.3 billion valuation – in May. 

Similarly, did COVID-19 cause or merely accelerate a growing VC preference for larger, more established companies over the early stage startups? KPMG was among those who predicted that 2020 would see “frothy speculative deals … increasingly replaced by high-conviction deals focused on companies with proven business models and paths to profitability or access to capabilities in adjacent areas of interest.” This view was shared in February, before the challenge of the global public health crisis had become incorporated fully by many analysts (and not just fintech). Since then, we have seen this play out in the form of new lows in deal volume and deal value for seed and Series A fintechs mentioned above.

When risk appetites are modest, it is understandable that the riskier, early stage startups will be those most likely to suffer. This so far has proven to be the case this year, as investment preferences continue a trend toward relatively more established companies. The fact that this shift had been anticipated by analysts, pre-COVID, suggests this trend is likely to endure in the near term.

Has there been significant geographic variation? Why?

As mentioned above, the only area to see significant VC investment gains in their fintech sector was Europe. In all other regions – Asia, North and South America, Australia, and Africa – both deals value and deal volume were down in the first quarter of 2020.

The profile of VC fintech investment in Europe so far this year was boosted by the $500 million raised by Revolut in Q1. Fintech is in many ways a favorite sector of the European venture capitalists; fintech has lead all others as a destination for VC investment for the past 6+ years. But there was no big Revolut/Stripe level investment in Europe in Q2, although there were a number of smaller deals in firms like U.K. ID verification company Onfido ($100 million) and Germany-based stock trading app TradeRepublic ($62 million) in April. U.K. challenger bank Monzo is also reportedly working to raise capital, as well.

One interesting development on the international fintech funding front is the continued rise of India relative to China. As reported in our weekly Finovate Global column last week, fintech investment in India bested fintech investment in China by a significant margin of more than $50 million. Indian fintechs racked in more than $330 million in funding while their Chinese counterparts raised “approximately $270 million” in capital. Deal volume in India also surpassed deal volume in China in Q1 by 37 to 26. GlobalData, the firm that conducted the analysis, credited the overall cooling of VC investment enthusiasm as disproportionately benefitting India relative to China. 

Interestingly, early stage startups were the preference of Indian investors, compared to a focus on more established fintech firms in China, where the fintech industry is arguably both more advanced and more COVID-sensitive, at least in terms of headline risk.

What are the best projections for H2 2020 and beyond?

The analysts at CB Insights have suggested that we could see a “fintech M&A” spree in the second half of the year. This would mean a resumption of a trend toward consolidation in many areas of fintech that was pronounced in 2019 and at the beginning of this year. They highlight the deals involving Plaid and Credit Karma, SoFi’s acquisition of Galileo and LendingClub’s acquisition of Radius Bank. This is another trend that could be accelerated as part of the industry’s response to the coronavirus, as hardships for some companies become opportunities for others. 

Most fintech analysts remain relatively positive about the industry and its capacity to continue to attract VC money during and after the pandemic. In its report on the fintech and the coronavirus – The Future of Disruptive and Enabling Financial Technology Post CV-19 – Finch Capital sees opportunities for lenders, and for both “agents of digitalization” and digitalization’s newest beneficiaries in mortgage and insurance. Enabling technologies like AI and critical services like cybersecurity and KYC are also likely to continue to fuel innovation and investment in fintech. Interestingly, those industries the report sees as “under pressure” – challenger banks, wealth management, and payments – are among those at the foundation of traditional fintech. This may suggest more disruption – and perhaps more consolidation – ahead for incumbents in these areas once we emerge on the other side of the current crisis.

4 Things We Know for Sure Now that 2020 is Almost Halfway Over

Between extreme wildfires, murder hornets, and the ever-present coronavirus, 2020 has been quite the year so far. Now that the year is almost halfway through, it’s a good time to catch our breath and look at some of the lessons learned.

In some ways, it seems as if we packed decades worth of news, digital developments, and economic losses into the first six months of this year, so there’s a lot to cover. That said, we still have another six months to go before we reach 2021 so there is plenty more room for further changes in the fintech industry.

To help digest what’s happened, we’ve picked up four key things we know for sure now that 2020 is halfway over.

Digital is the new brick-and-mortar

If there is a bright side of the coronavirus for the fintech industry, perhaps it is the positive effect stay-at-home orders have had on firms’ digital initiatives. When consumers aren’t able to conduct banking activities in person, they are pushed to online and mobile channels, even if they have never used digital banking in the past.

For banks that already had a robust digital strategy in place, this has been a time to shine. However, those that were still in the midst of developing and implementing their strategy have found themselves trying to catch up. In this instance, however, they are not catching up with their competitors, they are catching up with the new, online-only status quo.

What we know for sure is that this digital push is here to stay. Forced into the digital channel, consumers have had to adapt to practices they have never done before, such as remote deposit check capture. Now that they’ve experienced the benefits of the digital experience and have adapted their habits, many of these users won’t be visiting their bank branch as frequently.

Economic hardships will persist

Even though stay-at-home orders are being lifted in some areas, Consumers have decreased spending across the board. Whether it is because they have lost income or because they are afraid to leave their home because of the virus doesn’t matter– they are spending less and spending in different areas, which will cause many businesses to go under. In fact, it already has. The Washington Post recently reported that more than 100,000 small businesses have closed their doors forever.

Many have predicted that the worst of economic hardship is yet to come. And in all likelihood we won’t begin to fully recover until there is a vaccine. This means that it remains crucial to focus on supporting the customer. Banks can find even more creative ways to help consumers through their financial hardship and retain communication with them so that they know what to expect. In doing so, they will end up with a stronger consumer relationship on the other side of the crisis. Fintechs, on the other hand, have the opportunity to scoop up new clients who are in need of innovative products such as budgeting tools and services for gig economy workers.

Consolidation has begun

Fintech industry analysts have predicted that the economic side effects of COVID-19 will bring consolidation in the sector. And while some will acquire or become acquired, others will shut down as VC funding constricts. We’ve already seen a bit of M&A activity in the space over the past 6 months, though it is difficult to attribute all of it to the coronavirus.

In one vivid instance, neobank Moven announced in late March that it plans to shutter its B2C business and focus on the B2B side of things. The reason for the bank’s closing, explained founder and CEO Brett King, was that a major round of funding that Moven had in the works fell through. Since Moven’s enterprise business was growing because of the high number of banks making the move to go digital, it made more sense for the company to invest all of its resources into that side of the business.

In the traditional bank space, rumors began to circulate last week that Goldman Sachs is looking to merge with another bank. Among the potential partners are Wells Fargo, PNC, and U.S. Bancorp.

Payments will change for the better

Consumers in the U.S. have been hesitant to adopt a digital payments solution. That is, until now. The pandemic-fueled low-touch economy has both consumers and merchants looking for ways to transact without touching cash, cards, or keypads.

One of the most promising, pre-existing mobile payments technologies for the region is Apple Pay. Adoption for the tap-to-pay technology has been growing since Apple launched it in 2014. Now, six years later, Apple Pay transactions account for 5% of all global card transactions.

At the start of 2020, that 5% figure didn’t seem like bad traction. However, now that almost 100% of consumers are interested in making payments with the fewest number of touch-points, we’ll see hockey-stick growth not only with Apple Pay usage but also with its competitors Samsung Pay, Google Pay, and even peer-to-peer money transfer technologies such as Facebook Pay and Square Cash.