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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
With more than 100 new loans in Q2 and over a billion dollars in new loan commitments, Silicon Valley Bank (SVB) is “doing the same thing we’ve been doing for over 40 years,” according to SVB’s Head of National Fintech and Specialty Finance Nick Christian. Now a division of First Citizens Bank, Silicon Valley Bank has been a key component of the innovation economy since 1983, providing critical financial services to Bay Area technology entrepreneurs and their companies.
Nick sat down with Finovate Vice President and host of the Finovate Podcast Greg Palmer earlier this month in the wake of SVB’s recently released Future of Fintech report. The report looks at the outlook for innovation in the fintech sector based on SVB’s unique sector knowledge and proprietary data. How are cash reserves holding up for fintechs? Which direction are valuations going? What can we expect from funding growth heading into 2024? Nick and Greg discussed these issues and more including:
The resilience of early-stage companies in the face of the funding slowdown
The importance of becoming cash-flow positive
How embedded finance is revolutionizing payments and putting new emphasis on monitoring and compliance
What is the future of open banking in the U.S.? Today, financial connectivity innovator AtomiclaunchedPayLink, a new suite of solutions that streamline payment switching for consumers.
The new offering provides for an improved user experience for financial services consumers. It is also a big step towards helping banks and other financial institutions align themselves with the Consumer Financial Protection Bureau’s goals with regards to open banking.
We talked with Andrea Martone, Head of Product for Atomic, to learn more about PayLink, and the drive toward a more open banking system in the U.S.
Headquartered in Salt Lake City, Utah, and founded in 2019, Atomic made its Finovate debut two years ago at FinovateFall 2021. Jordan Wright is co-founder and CEO.
Congratulations on the launch of PayLink. Tell us more about this new suite of products.
Andrea Martone: Thank you! We’re thrilled about the launch of PayLink. We’ve taken our expertise in building user-permissioned connectivity for sharing and updating data and expanded it to merchant accounts, streaming services, and recurring bill providers, enabling consumers to seamlessly update their payment methods on file and retrieve information on upcoming payments. Building PayLink was a natural next step on our journey towards helping consumers update their primary banking relationship as it helps overcome a major point of friction in the process. To build it, we leveraged our cutting-edge TrueAuth technology that allows users to authenticate directly on their devices, without ever sharing login credentials.
For our readers who are new to Atomic, can you tell us a little about the company?
Martone: At Atomic we believe that making it simple for consumers to access, share, and update their financial data is key to unlocking new financial opportunities. By embedding Atomic’s SDK into their online and mobile banking applications, financial institutions can enable consumers to easily update direct deposit instructions, verify income and employment, import W2s and, now, update payment methods on file with merchants without leaving their application. With our solutions, financial institutions help grow new account adoption, qualify borrowers, and streamline tax filing.
Open banking was a major topic of conversation at our FinovateFall conference a few weeks ago. What is your take on the state of open banking in the U.S.?
Martone: Open banking in the U.S. is at an interesting juncture. With the CFPB taking bold steps in their public commentary, there’s an exciting momentum building around the consumer-centric transformation of financial services. While Europe has been ahead in this race, the U.S. is catching up, and I believe we are headed for an ecosystem that allows for significant innovations to support both consumers and financial institutions.
One of the issues that came up in our discussion on open banking was the idea that open banking is integrally related to the issue of digital identity. Do you agree? Why is this so and why is it important to keep in mind?
Martone: Digital identity is the backbone of a secure open banking ecosystem. As we democratize access to financial data, establishing secure, verifiable digital identities becomes crucial. It’s not just about sharing data, but ensuring that the right data gets shared with the right entities for the right purposes – securely. Our TrueAuth technology, for example, is designed to enhance credential security while empowering consumers.
The CFPB is working on regulations that could impact personal data rights. What are your thoughts on these potential regulations and their impact on companies in the open banking space – as well as the impact on consumer adoption of open banking?
Martone: I view the CFPB’s focus on personal data rights as a necessary step toward fostering a fair, transparent financial ecosystem. Giving consumers greater portability over their financial data opens the door for increased innovation and competition in the financial services space. However, it also creates a wider surface area for exploitation and misuse of data, as well. As a result, regulations will need to set the standards that ensure consumer privacy and data security and, in turn, build consumer trust. For companies evolving into the open banking space, this is an opportunity to align their products with consumer-centric values, which I believe will accelerate consumer adoption and loyalty in the long run.
Atomic is headquartered in Salt Lake City, Utah. We’ve seen a surprising number of innovative fintechs headquartered in Utah. What is it like to be a tech startup in the Beehive State?
Martone: Being headquartered in Utah has been fantastic for us. The state offers a thriving tech scene, a highly skilled workforce, and a business-friendly environment. We also have a dynamic team located throughout the country, which ensures that we comprise a diverse workforce.
What can we expect to see from Atomic over the next few months and into next year?
Martone: We have a busy roadmap ahead! You can expect to see more advanced features being rolled into PayLink, further strengthening its capabilities. You will also see us double-down on our strengths in expanding connectivity where it can benefit consumers to access, share, and update data in secure, transparent, and reliable ways to expand their financial opportunities. Key to this is continuing to advance our authentication methods, including our TrueAuth technology. Additionally, we’ll be focusing on strategic partnerships to widen our reach. Our aim is to continue leading the charge in making open banking a tangible, beneficial reality for all.
Launched in the fall of 2021, Merlin Investor is on a mission democratize access to investment strategies. The fintech offers a while label, multi-asset, educational, strategizing and tracking tool that helps investors accomplish two critical goals: building long-term positive results and limiting potentially catastrophic losses.
Merlin Investor’s technology is compatible with all trading platforms. The technology is suitable for both retail and professional traders, and is available for both the desktop and mobile. Merlin Investor enables users to retrieve market data and sentiment from multiple sources and apply that data to a massive range of tailor-made investment strategies.
With offices in both West Palm Beach, Florida, and Lugano, Switzerland, Merlin Investor made its Finovate debut at FinovateEurope earlier this year. The company returned to the Finovate stage in May for FinovateSpring. We caught up with Merlin Investor founder and CEO Guido Petrelli (pictured) this summer to learn more about the company, its mission to democratize access to investment strategies, and what to expect from the company in 2023 and beyond.
What problem does Merlin Investor solve and who does it solve it for?
Guido Petrelli: Merlin Investor was born as an intelligent protection and conscious guide for a more farsighted management of investments aimed limiting potential catastrophic losses while building long term positive results. Thanks to the Merlin platform, retail investors can educate themselves, study the markets, and create and track their own investment strategies to easily understand, balance and diversify investment risks.
In other words, we help and empower a new generation to invest with strategy in mind. This is the key to becoming successful and is the only factor distinguishing between gambling and investing. As we are on a mission to democratize financial inclusion and investment planning, our technology was built to allow anyone, regardless the level of knowledge or experience, to become independent and the one and only master of their own financial future.
How does Merlin Investor solve this problem better than other companies?
Petrelli: In the retail investor space, we see many companies focusing on execution, meaning focusing on the act of buying and selling assets. But executing without evaluating multiple sources of information first, combined with the lack of a diversified and balanced investment strategy, can lead to uncontrolled and unlimited potential losses because of the market’s ups and downs. While it may imply the chance for quick gains, it’s actually not the norm as wealth is usually built over time by managing a positive-sum game.
That’s why from the very beginning Merlin was designed as a complementary product to a trading platform and not as a substitute solution. Merlin Investor addresses the strategic essence of investing while the majority of the competition just focuses on enhancing the trading experience – which is already well supported by several financial institutions in a pretty similar way.
Who are Merlin Investor’s primary customers. How do you reach them?
Petrelli: Our primary customers are financial institutions focusing on educating a new generation of retail investors and offering the possibility to trade different asset classes through their digital banking platforms. We attend multiple fintech events in several countries that are attended by financial institution decision-makers responsible for delivering an innovative and digitalized experience to their clients. We also analyze the markets to identify those prospect clients we believe to be a fit in terms of services and client base. Then we look for the people focusing on retail digital products and platforms and reach out to them to introduce our company and technology. Last, we work to be featured in fintech-specialized magazines having financial institutions as target audience.
Can you tell us about a favorite implementation or deployment of your technology?
Petrelli: We offer our technology as a white-label solution that financial institutions can easily embed into their own digital platforms through API keys, while having the possibility to customize product’s appearance and features. As result, our product is delivered to the final users in the bank’s name and as a sub-section of the same app/e-banking they are already familiar with. Through our B2B partner’s portal, we grant to financial institutions the flexibility to choose from the full Merlin product those asset classes, sections, features, and contents they intend to integrate based on their own specific needs. In this way, they can design a tailored solution and experience for their own clients, while sticking to the overall structure and design of the banking platform they already offer.
What in your background gave you the confidence to respond to this challenge?
Petrelli: In a nutshell, it was the combination of my knowledge around investing and the problem I personally experienced as a retail investor that led to Merlin Investor. In fact, I was just a teenager when I first started to trade. Then I quickly realized that executing trades “per-se” – meaning the simple action of buying and selling assets – is the less strategic and relevant part to achieve long term positive results. Instead, studying different market sources, and then designing a diversified and balanced investment strategy, are what make the difference in the end. Still, (available) banking and trading platforms were not enough to educate me about investing, or to (help me) design and analyze my own investment strategies.
As a result, for years I was forced to create time-consuming and unfriendly spreadsheets to the point where I couldn’t accept it anymore – not in a world like today’s where we have an app for everything we do! At the same time with trading platforms booming basically everywhere, it became more and more clear that a new generation wants to invest autonomously and in the right way. As I couldn’t find any product in the market like the one I envisioned, I decided to create it. And that’s how Merlin Investor was born.
Merlin Investor founder and CEO Guido Petrelli demoing the company’s technology at FinovateEurope this year.
You recently demoed at FinovateSpring and will be demoing your technology at FinovateFall in September. What brings you back?
Petrelli: This year I’ve demoed the Merlin platform at FinovateEurope and FinovateSpring, so FinovateFall will be my third appearance. So far the experience has been great. We have been able to show our cutting-edge technology to major financial institutions in Europe and North America, while receiving much interest and establishing meaningful connections with decision-makers within the banking industry. The high visibility and key connections with prospect clients are the two main factors which bring us back to FinovateFall. The well-organized events and the team at Finovate are also a plus.
What are your goals for Merlin Investor?
Petrelli: Our goal is to be recognized by the major global banks as the innovative partner to work with when it comes to educating and empowering a new generation of retail investors. We focus on establishing solid and strategic partnerships with a limited numbers of players in the banking industry to achieve our mission of democratizing financial inclusion and strategic planning globally, while helping young investors to reach financial independence and to become the masters of their own financial futures.
What can we expect from Merlin Investor over the balance of 2023 and into next year?
Petrelli: We’ll continue to prioritize continuous and never-ending improvement of our technology by looking to upgrade the experience we offer either to financial institutions and to the final users to whom our product is deployed. We will also continue to work to boost our market presence to make the Merlin platform known to more financial institutions serving retail clients in several countries. We will eventually concentrate on scaling the team and operations to be able to manage expectations. We will accomplish all of this without forgetting our mission to make conscious and strategic investing accessible to anyone through strategic partnerships with financial institutions.
How are community banks keeping pace with rising customer expectations and the demands for greater financial inclusion? What role do fintechs play in helping community banks offer their customers the latest innovative fintech solutions?
I spoke with Charles Potts, Executive Vice President and Chief Innovation Officer for the Independent Community Bankers of America (ICBA) to discuss this and other issues, including:
Key challenges faced by community bankers today
New opportunities and customer expectations
The role of partnerships in helping community banks respond to new opportunities
What is the role of Generative AI in financial services? It seems as if every week another fintech or financial services company is announcing that it is integrating ChatGPT – among the most popular Generative AI applications – into its products. This week alone Avalara announced that it is launching a sales tax calculator plugin for ChatGPT, and cryptocurrency exchange Bybit reported that it is integrating ChatGPT into its trading tools.
As part of our Streamly Future of Finance Series, we asked Rocio Wu, Principal at F-Prime Capital and a recent speaker at FinovateSpring, for her thoughts on the role of Generative AI in financial services. What unique services will Generative AI make possible? Are banks ready to take advantage of what Generative AI has to offer? And what are the ethical concerns about the use of Generative AI in financial services? Wu discusses all this and more in her Streamly Future of Finance Q&A: “The three main categories of Generative AI innovation in financial services.”
“NayaOne is a digital transformation platform that helps you leverage the fintech ecosystem. We work with product, innovation, and tech teams in banks and insurance companies to help them get their products to market much, much quicker. We have synthetic data sets and building tools on the platform. Typically, it takes companies nine to twelve months to begin working with a fintech. Our customers can get to that outcome in about six to eight weeks.”
“We provide the industry with a digital banking market research platform that’s analyzing the digital offerings of banks, fintechs, credit unions, across the U.S. and worldwide. We analyze – from A to Z – what the banks, fintechs, and credit unions are offering, how they offer it, (and) how well they offer it, all while providing them with the ability to benchmark against the market and organize their product roadmap to implement their digital banking strategies.”
Greg Palmer chats with Nicole Sanders and George Broom of 10x Banking on streamlining product development and getting to market faster. Episode 171. Demo video.
“10x is a cloud-native banking platform that acts like a real-time operating system for banks. It allows you to build and run your bank at record speed at a fraction of the cost. We demonstrated that at Finovate through the use of our Bank Manager UI application. This allows product managers at banks to build products in minutes rather than months. In that seven minutes, we built a current account with a card and also a loan ready for launch to production.”
“We are a scale-up, San Francisco-based, that provides a software-as-a-service, machine learning platform which enables business experts to stay in control of their AI models. We also empower the data science and engineering teams through our technology that consists of the ability to continuously learn from the data as the business world changes. We provide continuous explanations to business users and give them the ability to give feedback to the models so that the models are aligned with the business all the time.”
Stay tuned for more insightful conversations from Greg Palmer and the Finovate Podcast!
This week’s edition of Finovate Global takes a look at one of the innovative fintech companies headquartered in Estonia: Ender Turing. The firm, which specializes in voice conversation intelligence and automation, made its Finovate debut earlier this year at FinovateEurope in London.
Headquartered in Tallinn, Ender Turing was founded in 2020. The founding team consisted of two AI researchers with experience in automatic speech recognition and natural language processing (NLP), as well as a third member with experience in enterprise-level call center software. Together, the team formed Ender Turing and have since launched Ender Turing AI Speech Analytics. The new solution automatically analyzes and assesses the communication content between financial institutions and their customers. This helps FIs enhance the customer experience, as well as meet quality guidelines and compliance requirements in areas such as customer service, sales, and debt collection.
We corresponded with Ender Turing CEO Olena Iosifova via email. Below are her responses to our questions.
Read more about fintech in Estonia in this Finovate Global column from earlier this year.
What problem does Ender Turing solveand who does it solve it for?
Olena Iosifova: Eight hundred million voice conversations are recorded daily in Europe and many more worldwide. A tiny 1% of these conversations are checked for quality control, employee training, and business results improvement. Ender Turing is a conversations intelligence and automation platform to close 99% of the conversation gap for business growth.
Our daily business users are customer service, sales, and collection departments. But marketing and product teams also get value from making client’s research right on our platform.
How does Ender Turing solve this problem better than other companies?
Iosifova: Ender Turing created the fastest-to-value platform that performs in 24 languages. We use a proprietary speech-to-text engine to fine-tune models for every client to achieve the highest accuracy. Our machine learning pipelines are very efficient, and we can fine-tune speech recognition for free.
Also, the user interface does all the system setup for reaching business KPIs. There is no need to wait for the time slot at the IT department to help a business unit make it.
Who are Ender Turing’s primary customers?How do you reach them?
Iosifova: Our primary customers come from financial industry. These are banks, debt collection firms, and other financial services companies. But we also have clients in the public sector and in healthcare.
Direct outreach is our main channel of getting noticed by potential customers – as well as our partnership network. We cooperate with system integrators and call center software vendors and offer added value to their customer base.
Participation in conferences serves as a great supporting touch.
Ender Turing CEO Olena Iosifova demoing Ender Turing AI Speech Analytics at FinovateEurope 2023.
Can you tell us about a favorite implementation or deployment of your technology?
Iosifova: We have two great examples of our technology implementation. One is OTP Bank, and another is Creamfinance Group.
In OTP Bank it started with the call center customer service department. One month after we started, the debt collection department joined, seeing great results. OTP Bank saw hundreds of hours of saved time every month for quality management, employee training, and improved conversion rates – results we mutually enjoy.
With Creamfinance Group, the best indicator of great business results is that after implementation in their headquarters in Poland, we now serve also their offices in Spain, Mexico, and the Czech Republic.
What in your background gave you the confidence to respond to this challenge?
Iosifova: Three founders in Ender Turing have positive experience and skills in artificial Iitelligence R&D, business management, and a passion for building highly performing teams. We enjoy analyzing our potential customers’ strategies and market trends to foresee the challenges they might face in the next three to five years. With constant innovations inside our R&D, we build our product to deliver value for today and the future.
What is the fintech industry like in Estonia? How do traditional financial institutions treat Estonian fintechs?
Iosifova: Apart from the big name in fintech, Wise, coming from Estonia, other exciting fintechs are growing here. To name a few – Grunfin, Scrambleup, Tuum, Salv, Montonio.
They partner with traditional financial institutions actively. For example, LHV Bank is the best client of Tuum. And Salv is the AML solution that works exactly in a traditional financial services market.
You recently demoed your technology at FinovateEurope in London. What was that experience like?
Iosifova: This is truly an international event where we met companies from all over the world. This was a pleasant surprise. We will participate again.
What are your goals for Ender Turing?
Iosifova: Our goal is to become a number-one choice platform for banks and financial services companies regarding conversation intelligence and automation, providing the best quality of service, sales conversation rate, and recovery rate.
What can we expect from Ender Turing over the balance of 2023?
Iosifova: Our growth in 2023 gets us to expand to the U.S. and Latin America. But what’s more interesting is that we bring real-time agent assistance to fill the gap between the top-performing agents and the rest of the team and ensure real-time compliance monitoring in every conversation.
Today is the final day of Women’s History Month. At Finovate, we have spent the past 30+ days highlighting the accomplishments of women in our industry. We began our commemoration with a look at the women who would demo their companies’ latest technologies at FinovateEurope. We followed up on International Women’s Day, showcasing the women who would deliver mainstage keynote addresses at the conference. And just this week, we featured the winners of the “Female Founded/Owned” category of our Finovate Demo Scholarship program for fintech startups.
Today we share insights from Maggie O’Toole, Vice President of Strategic Partnerships at TabaPay. Headquartered in Mountain View, California, and founded in 2017, TabaPay is a specialist in real-time money movement. The company facilitates one million transactions every day, has more than 2,000 clients, and is the number seven ranked CNP (card-not-present) acquirer in the U.S.
We caught up with Ms. O’Toole to discuss her work at TabaPay, her experience as a female leader in fintech and financial services, and what needs to be done in order to enable more women to secure leadership roles in our industry.
Tell us about your background and current position at TabaPay.
Maggie O’Toole: When I graduated college and moved to the United States from Poland, I faced some of the biggest challenges of my life. Being an immigrant in a new country without speaking the language was a difficult experience, but it also ignited a fire in me to prove that I could succeed.
Over the past decade, I’ve dedicated myself to the payments industry, focusing on strategic partnerships that help businesses thrive. My time at Onbe was particularly impactful; I had the opportunity to lead the charge on launching new products and forging partnerships that enabled real-time payments. I’m proud to say that I played a pivotal role in helping Onbe grow from a startup to a scaled enterprise, while completing a successful M&A strategy.
Today, at TabaPay, I focus on maximizing value for our clients and positioning the company for long-term growth. Building solid relationships with clients, networks, and banks is at the heart of everything I do. I take pride in the fact that I’ve been able to establish a partner management department from scratch, which is set to quadruple in size by the end of the year.
My journey has been anything but easy, but it has shaped me into the leader I am today. I’m passionate about the payments industry and helping businesses succeed, and I’m excited to see where my journey will take me next.
What challenges have you faced as a woman in fintech, and how have you overcome them?
O’Toole: As a woman in fintech, I have faced various challenges throughout my career. I’m still amazed by the vast underrepresentation of women in leadership positions in the industry. This has made it more difficult to find role models or mentors who share similar experiences and can provide guidance and support.
Another challenge I have faced is the pervasive gender bias that exists in many aspects of the industry. This bias can manifest in subtle ways, such as being interrupted or talked over in meetings, or in more overt ways, such as being passed over for promotions or opportunities.
To overcome these challenges, I have sought out supportive networks of women in fintech and other industries. These networks have provided me with invaluable mentorship, advice, and opportunities for growth. I have also worked hard to advocate for myself and my accomplishments, and to challenge gender bias whenever I encounter it.
Furthermore, I have always prioritized my personal and professional development. I have sought training and education opportunities to improve my skills and knowledge, allowing me to excel in my role and advance my career despite these challenges.
How have these challenges shaped your leadership style?
O’Toole: My experiences as a woman in fintech have influenced my leadership style. I believe overcoming challenges and facing obstacles head-on has helped me become a stronger and more effective leader. By persevering through difficult times, I have developed a resilient and adaptable leadership style; I’m always ready to take on new challenges.
One way these challenges have shaped my leadership style is by making me a better communicator. I have learned the importance of clearly articulating the company’s vision and plan to my team, so everyone is on the same page and working towards the same goals. Additionally, I have become more empathetic and understanding of my team’s needs, providing them with the support and guidance they need to be successful. I truly believe that sound, repeatable, positive business results are a natural outcome of prioritizing our employees, clients, and partners through building trusted and safe relationships.
Finally, setbacks and failures have taught me to view them as learning opportunities and growth. I encourage my team to adopt a similar mindset and not to be afraid to take risks and make mistakes. I believe that taking pauses periodically and reflecting on where we are and where we’re headed as a team is essential for long-term success.
Overall, my experiences have made me a more effective and compassionate leader, and I am grateful for the lessons they have taught me.
What is your approach to building work environments and teams?
O’Toole: My approach to building work environments and teams is rooted in building strong relationships. As a leader, I believe it’s essential to take the time to understand the backgrounds, experiences, and perspectives of each team member to foster a culture of trust and mutual respect. By investing in these relationships, I aim to create an environment that empowers individuals to be their best selves and feel supported in their growth and development.
I strive to create a work environment that encourages collaboration, creativity, and innovation. This includes providing opportunities for open communication and feedback, as well as recognizing and celebrating individual and team achievements. Ultimately, I aim to build a team united by a common purpose and inspired to work towards a shared vision.
What are the most important qualities for women in leadership positions in fintech, and how can they develop these qualities?
O’Toole: As women in leadership positions in fintech, we have unique perspectives and valuable insights to bring to the table. We must have confidence in our abilities and not let anyone else define us or hold us back. We should proudly tell our stories, embrace our individuality, and be intentional with our time and energy.
To develop the necessary qualities for leadership, we should constantly be growing and learning, personally and professionally. We can bring new skills and lessons from our personal lives into our work and vice versa and remain open to new perspectives and opportunities for growth.
As leaders, we must be intentional about what we say “yes” to, knowing that every decision comes with trade-offs. We should prioritize our strengths and areas of expertise and allocate our time strategically to make the most significant impact on our teams and organizations. By doing so, we can create a more fulfilling and rewarding work environment for ourselves and those around us.
How do you see the role of women in fintech evolving over the next five years, and what are your thoughts on the industry’s progress toward gender parity?
O’Toole: The fintech industry has come a long way regarding gender parity, but much more work remains to be done. As a female leader in fintech, I’m confident that women will continue to play a pivotal role in shaping the industry over the next five years, and beyond.
Companies need to recognize the value of diversity and make a concerted effort to hire and promote female leaders. This is not about meeting quotas, but about creating a genuinely inclusive workforce that reflects the communities we serve. By empowering women to take risks, dream big, and believe in themselves, we can develop a culture of success that benefits everyone.
At TabaPay, I’m proud to be part of a team committed to diversity and inclusion. With 55% of our employees and 65% of our leadership identifying as women or non-binary, we’re setting a powerful example for the rest of the industry. In the years to come, I believe we’ll see even more significant progress as more companies recognize the critical importance of gender parity in fintech and beyond.
One of the areas of fintech that has benefitted significantly from the rise of enabling technologies like AI and machine learning is compliance. From reducing the role of manual labor via automation to streamlining complex processes to make rules easier for companies to follow, both regtech firms and compliance teams alike play a major role in ensuring the fintech innovations we enjoy are safe, do what they say they’ll do, and are as available to as many eligible consumers as possible.
We caught up with Sarah Murray, who leads the Deposit Product Team at Compliance Systems. She talked about the impact technology is having on the field of compliance, and discussed the key challenges that Compliance Systems is helping its 1,800 financial institution clients overcome.
How did you get started in fintech? What has led you to where you are today in your career?
Sarah Murray: Before fintech, I was practicing law in private practice, and I just knew I was ready to be out of the courtroom and do something different with my legal career. I started at Compliance Systems eight years ago as a product specialist and counsel; now I am happy to have led the product team for the last five years. I love my job because no two days are the same. I never thought I would spend some days researching legal topics and reviewing regulations, and other days reviewing code and testing software, but I love the challenge each day brings.
Tell us about the work you do for Compliance Systems.
Murray: I lead our deposit product team at Compliance Systems, which consists of attorneys, business analysts, software developers, and quality control specialists who all work toward the common goal of delivering compliant and innovative products to our 1,800 financial institution clients. I love the mixture of technology with the law and getting to keep my legal hat that I went to school for by delivering compliance solutions through technology to our clients.
What are your thoughts on the way technology is helping companies keep up with the changing regulatory environment?
Murray: Overall, I think it’s the job of technology to streamline and simplify, regardless of which industry we’re talking about. In the case of fintech and regulatory compliance, that means automating repetitive and high-risk compliance processes. It also means demystifying regulations where we can for the benefit of the consumers that those regulations are intended to protect.
Our proprietary research engine tool enables us to provide proactive and update-to-date compliance, and our team is constantly monitoring and tracking what is happening in the legal and regulatory spaces in real-time to ensure we can deliver timely compliance solutions to our clients. Our software provides updates through our cloud-hosted solutions, and our compliance safety net tool also provides interactive features that help our clients complete compliant transactions and provide a better level of customer service.
How has this evolved and how do you see it continuing to evolve leading into 2023?
Murray: The market has evolved through financial institutions rethinking compliance and needing to deliver a solution that meets their customers [and] members where they are: on their phones. We deliver compliance in a way that makes sense in a mobile-first environment and develop content with that in mind. This model isn’t necessarily what financial institutions are used to, but it is what customers [and] members strongly prefer: easily navigable, mobile-friendly content.
Financial institutions are telling us they want a single, streamlined approach for a customer, regardless of the channel (e.g. whether it be in branch or online). So, we’ve created a solution that satisfies the requests of both parties. You can open accounts through the same process as you would in a branch location, but on a mobile device with ease.
What challenges are you hearing in conversations with clients? What technologies are resonating most?
Murray: Our Simplicity Mobile, a mobile-first account opening solution, has been highly successful because it has helped address some of the main pain points for our clients. They communicated that they are looking to have a more streamlined, efficient, and consumer-friendly workflow to open accounts and to reduce friction in that process to avoid abandonment. This solution completed that challenge by offering native HTML content that a financial institution can include within their account opening workflow, and by supporting “click to sign” functionality.
Another challenge we are hearing from clients involves their treasury management solutions. Treasury management operations are a vital component of a bank or credit union’s commercial services, but the content needed to properly document this business can require costly outside counsel or consume internal resources that put a strain on operations. Also, financial institutions are looking for a better, more streamlined way to sign up their customers for their treasury services. They don’t want to have to create and maintain separate contracts for each treasury service and are looking to avoid inundating customers with multiple contracts and documents.
Our delivery model ensures that our clients will always be in compliance and our technology delivers the configurability needed for a treasury management solution, as many aren’t looking for a “one size fits all” fix. Our solution helps minimize operational and compliance risks for our clients while also providing a central hub for all compliance-related updates and content within our solution. Furthermore, our solution offers one master services agreement for treasury services to help improve a customer’s enrollment experience.
Are there any tips you would like to share on providing strong leadership in a male-dominated industry?
Murray: A few tips I have are to be passionate about what you do and work with integrity; work hard to deliver what you say you will do when you say you will do it; don’t be afraid to challenge the status quo and be an advocate for yourself and others. A big thing at Compliance Systems is that we believe in reinvesting in our products based on what we have learned from our clients and the industry. I would say it is important to have that mentality yourself as you grow. Learn from mistakes. Learn from what works. Learn from your colleagues and clients. Together as an industry, we can elevate the banking experience for all.
The role of state-based organizations in helping foster fintech innovation in their communities is often overlooked. For years, one such organization, JobsOhio, has helped bring attention to the opportunities available to fintech entrepreneurs throughout the state of Ohio. The private development corporation also works to encourage investment in the state’s most innovative businesses – from advanced manufacturing to insurtech. As remote work has expanded in recent years, more and more founders and professionals have turned from Silicon Valley and New York to cities in states like Ohio to launch new businesses and begin new careers.
This year at FinovateFall we sat down with Ron Rock, Senior Director of Insurance/Insurtech with JobsOhio to talk about the organization’s role in driving fintech innovation in Ohio, and what the Buckeye State has to offer both fintech entrepreneurs and fintech investors.
On the impact of remote work on fintech and financial services
In financial services, it seems like we have the ability to be remote. We’re not a “build a building, fill it full of people” kind of industry. So being able to work remotely is very easy in the financial services space – especially when you’re stretching into some of the tech strategies that we have … On the other side, there are some banks and insurance companies that are quick to get people back into the office. They love the camaraderie. They love the collaboration.
On the rise of Ohio as an fintech innovation hub
We fund three different innovation centers in the state. We have one in Cincinnati, one in Columbus, and one in Cleveland that are being developed right now. There’s a lot of collaboration in the healthcare space, in the true IT space. So, in the financial services space, we think that being close to that innovation is very key. What I’m trying to do is recruit some of those (financial services) companies to utilize those innovation centers, get close to that innovation because, I know it’s kind of corny, but innovation breeds innovation.
On the advantages of launching new fintechs in Ohio
What you have is that you’re close to about two-thirds of the financial services sector in Ohio. So, within a day’s travel you can be anywhere you want to be within the financial services ecosystem in the midwest. What we’re also trying to do is highlight with our venture capitalists that fintech and insurtech is a space that is going to provide some really good ROI. We’ve got a lot of venture capital in the state. When you think of venture capital, you tend to think of Silicon Valley or New York. But we’re trying to get really strong in the state of Ohio, as well.
We are all familiar with the challenge businesses have when it comes to new customers. On the one hand, there is an urge to onboard as many new customers as possible. On the other hand, great care must be taken to block bad actors or, in the case of the lending business, to avoid borrowers who are unlikely to repay their loans.
To help companies manage this tug-of-war, innovators in the credit scoring space have developed new strategies for determining credit-worthiness. These new approaches have moved beyond traditional credit scoring to help lenders reach reliable borrowers who may have thin credit histories – or even no significant, traditional credit history at all.
VantageScore is one such innovator. This year at FinovateFall, we caught up with Rikard Bandebo, VantageScore Executive Vice President and Chief Product Officer to talk about the company’s approach to credit scoring, how it differs from traditional credit scoring methods, and how fintechs can leverage VantageScore’s technology discover more “newly lendable” customers.
On making credit scoring more accurate and more inclusive
We went back to the drawing board in a way to look at what we could do to make these models much more accurate and inclusive. In doing so we started looking at ways we could look at the data on the credit file. We began using what’s called trended data and found, in doing so, we were able to improve the accuracy of the model significantly. It’s probably one of the most accurate, if not the most accurate, generic model that’s been widely adopted.
Secondly, we also found that by using this type of data we got much more consistent scores for consumers over time. There’s nothing quite as frustrating for consumers and lenders (than) when their scores go up and down a lot over time. So this provides a much smoother transition throughout a consumer’s history.
And the third piece is that we were able to massively improve our inclusion with this latest model. We score about 37 million more consumers than traditional generic models that are out there – out of which more than 10 million are above 620.
On transitioning to VantageScore from other credit scoring providers.
First and foremost, we are a very transparent credit scoring company. We provide a lot of transparency into how our models work (and) what impacts different activities have on our models. We also have built out great support services around migration and also around governance. We do a lot to make it as easy as possible for both fintechs and lenders to make a transition.
On VantageScore’s reputation in the capital markets and among ratings agencies.
We recently had FTI Consulting conduct a study where they went out and interviewed and tried to understand what the appetite was like in the broader market, what they were looking for. One of the common feedbacks they found was that, like other markets, they’re looking for more competition, and they’re looking for the best models that they can use to understand the impact of different types of consumers on risk.
We’ve actually seen a big uptake in VantageScore being used in general, and we’re seeing now a growing appetite in the securitization markets. We’ve seen some very large lenders transition to now offering their securities based on VantageScore.
Tampere, Finland-based ReceiptHero is on a mission to make meaningful interactions from every day transactions.
The company’s platform combines digital receipts with loyalty programs and benefits to give merchants new ways to engage with their customers. Consumers benefit from an integrated solution that relieves the burden of paper and email receipts, as well as the hassle multiple loyalty cards and apps.
We caught up with Chris Moore, Chief Operating Officer with ReceiptHero, to talk about how far the company has come since its Finovate debut in 2020, and the role ReceiptHero plays in the emerging data economy. We also talked about the company’s recently announced partnership with Ingenico.
You made your Finovate debut at FinovateEurope 2020 in Berlin, Germany. What was that experience like?
Chris Moore: Wow, that feels like a decade ago! Back then we were a very small team and had just released our Nordea bank integration. We had also started to systematically onboard our first batch of Finnish merchants to the platform. The feedback we got from the demo was fantastic; it really felt like we were solving a global problem and not just something we had been talking about here in Finland. You could argue pitching at FinovateEurope was the catalyst to where we are today.
Later that year you secured two million dollars in seed funding. What did that investment say about your company at the time and how did you put the capital to work?
Moore: The seed funding also solidified we were fighting a problem big enough. We picked some great Nordic investors and they’ve provided more than just capital since the investment. Essentially, the funding was to grow the platform and increase our sales efforts in the Nordics, but also to (expand) into other markets, such as Switzerland and the U.K. and put capital towards our POS integrations which are a key part of getting the receipt data flowing from the retailers.
Last fall ReceiptHero partnered with Mastercard and Visa. How did these partnerships come about and what was accomplished through them?
Moore: These partnerships came quicker than we expected. To partner with both Visa and Mastercard at the seed stage was a huge milestone for us. But we also knew that tackling the digital receipt problem would only happen if we had global partners such as the two major card schemes. The partnership with both Visa and Mastercard allows us to move into new markets in Europe with less dependence on local payment providers and therefore fewer integrations before being able to launch our solution. So it was a really big win with regards to scaling the platform and providing confidence at the highest level to support our objective of removing paper receipts as the main method of proof of purchase. I don’t think these partnerships would of been possible without our great development team building out a PCI DSS compliant platform, emphasizing our commitment to safeguarding cardholder data and providing the best possible receipt platform on the market today.
Speaking of Visa, you’ve recently strengthened your relationship with the company. How so?
Moore: Visa has seen increased client requests and interest in digital receipting over the last 18 months and, for a while, they have been trying to find a European partner who can enable such a solution. Building on the technical partnership from 2021, this new agreement puts us in the shop window as an approved partner for Visa’s clients and partners. We are already seeing the benefits of being involved in Visa’s Fintech Partner Connect program and we hope we can announce something soon off the back of this strengthened relationship.
You have talked about the idea of the data economy. In what way is ReceiptHero a part of this data economy – and what role does it play within it?
Moore: We are surrounded by data in our daily lives, most of it is unstructured and in hard to reach places. Receipts printed on paper are just that: unstructured and, as a customer, it’s hard to apply that purchase data to good use. Part of my opening remarks at FinovateEurope was that we are showered by amazing digital payment innovations and sadly the post purchase experience has mainly been left to stay in the analog world. Purchase data is core to building a strong data economy, as this data has so far been siloed and in a format that is hard to receive in real-time. It’s not really been leveraged or valued as it should be. ReceiptHero is breaking down those silos and enabling a world where a consumer can have this data instantly in their banking app or in an approved service where the data is used to better the customer experience.
Part of our unique role in fighting for digital, structured receipts is that we have a fiduciary duty to the data that flows through our platform to use it in a way that benefits all ecosystem stakeholders. We have no ulterior motive here; we are not a bank, a large retailer nor the cash register or payment provider enabling the sale. This allows us to act with the best interest of all stakeholders and help everyone to better utilize this new found digital data for the cardholder and the merchant.
ReceiptHero also plays a role in the trend toward sustainability and responsible consumption. How important has this been to you and to your customers?
Moore: For large retailers that print hundreds of thousands of receipts a day, what happens when you turn off all the receipt printers in your stores nationwide and only send customer receipts via digital channels? What are the impacts to your business from a cost perspective – but also the environmental repercussions? Simply put, less trees get turned into wood and then into paper, which then would have found their short existence as thermal receipts that sadly cannot be recycled due to the harmful chemicals on the paper. Take that scenario and then multiply it across thousands of retailers right across Europe (and, at some point, globally). That becomes a significant change in our fight for sustainability and better digital experiences.
What can you tell us about the fintech industry in Finland that those outside of the country – and the region – might be surprised to hear?
Moore: Well, I have personally been in Finland for 10 years now and I’ve seen the fintech space grow year over year. Sweden has always been a few steps ahead with regard to fintech unicorns, but Finland has now quickly caught up. We have a great ecosystem here where banks seek to innovate and look for fintechs to speed up those embedded features. Now we have unicorn successes such as Enfuce and AlphaSense in Europe. I also think the VC space is heating up with regards to fintech funding, with lots of appetite for investments in young ambitious fintech companies.
You introduced a loyalty rewards solution this summer. Why this move now – and how has the early reception to the new feature been?
Moore: Distributing digital receipts in real-time is the very foundation of what can be built with this data. What we wanted to prove is what happens in adjacent segments when you get this data and wrap a lightweight loyalty solution around it. We’ve started to onboard our SME merchants onto the rewards program, and so far it looks like we’re able to provide even more value to the merchant and the cardholder. For larger retailers where they might already use a loyalty platform, we can enable real-time card-linked receipt data to give them better visibility over repeat spend, lifetime loyalty, and average basket size.
You’ve also announced that you will be joining Ingenico’s new PPaaS platform. What can you tell us about this partnership?
Moore: We’ve announced this week that we’ve signed a partnership with Ingenico, one of the world’s largest payment terminal providers and now part of the Worldline group. PPaaS is Ingenico’s new payment platform that enables a “one-to-many” integration for us, so we can enable our digital receipt solution for thousands of acquirers, another partnership that supports us to scale across Europe. What’s exciting about this partnership is that we can onboard cardholders from the payment terminal, allowing another entry point to receive digital receipts for customers.
What else can we expect to hear from ReceiptHero over the balance of 2022 and into 2023?
Moore: Well, we’ve got some important retailers coming to the platform over the next six months so we’re really excited to announce those in due course. These are retailers that operate across multiple markets and more signs of us expanding further into Europe. There will be some bank partnership news too, but I wont give anymore away on that just yet!
