Alumni News– August 12, 2014

  • Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Finovate-F-Logo.jpgUK peer-to-peer leader Zopa tops $1 billion.
  • TSYS launches its Enterprise Tokenization solutions to help boost e-commerce security.
  • Thomson Reuters introduces Watchlist Pulse, a buy-side app for its Eikon platform.
  • Jingit’s Co-CEO and Co-Founder Joe Rogness explains to PYMNTS how they combine advertising and payment transactions.
  • StockTwits adds Former Yahoo! CEO and Robert Peck, SunTrust Tech Analyst, to Board of Directors.
  • Nanalyze features Dynamics ePlate technology.
  • Australia’s The Age considers how Society One plans to undercut banks’ personal loan rates by 5%.
  • Knox Payments considers how Mint, LendUp, and Simple are empowering our increasingly cashless society.
  • Oink brings its youth payment technology to online game company, Smilegate West.
  • San Francisco 49ers football team adds Wealthfront to list of benefits for employees.
  • Luxoft opens new delivery center in Guadalajara.
  • CEB Blogs interview Wipro’s Chief Learning Officer Abhijit Bhaduri.
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.

Alumni News– July 30, 2014

  • Finovate-F-Logo.jpgThreatMetrix granted patent for its ability to differentiate between trusted customers and cybercriminals 
  • Australia-based Vermilian acquired by banking technology firm Ultradata.
  • Boku brings its direct carrier billing-based mobile payments technology to India.
  • Mangopay teams up with Currency Cloud to provide international money transfer services to its customers.
  • Shivalik Mercantile Cooperative Bank to deploy “bank in a box” from FIS.
  • Blackhawk Network teams with Amazon to enable customers to manage and spend their gift cards in the new Amazon Wallet app.
  • Financial Guard to provide clients with both passive and active investing options.
  • Insuritas wins 2014 NAFCU Services Corporation (NSC) Innovation Award that highlights groundbreaking solutions for credit unions.
  • TechCrunch: Credit Karma offering free, weekly credit reports – no strings attached.
  • Franklin University chooses ACI Worldwide for online payment processing.
  • Wikipedia Foundation partners with Coinbase to allow bitcoin donations.
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.

Alumni News– June 20, 2014

  • Finovate-F-Logo.jpgBillGuard expands internationally, now available in Australia, New Zealand and the UK.
  • Simple speeds up money transfers: 1 business day for xfers from Simple and 3 business days for xfers into Simple.
  • Credit Sesame attracts 1 million + users to enroll in its free ID theft protection service.
  • American Banker talks about Check in its feature on the role of mobile bill pay in helping banks retain customers.
  • Fiserv announces that its CUnify account processing platform will be deployed by United Credit Union.
  • The National Bank (TNB) in Palestine signs deal with Temenos to replace current platform with T24.
  • Check announces billpay partnership with Direct Energy.
  • Gremln raises $100,000 as participant in SixThirty Accelerator Program.
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.

Finovate Alumni News– May 14, 2014

  • Finovate-F-Logo.jpgTIO Networks partners with New Jersey’s Public Service Electric and Gas Company to set up bill payment kiosks.
  • Pindrop Security and AGNITiO partner to protect call centers as they adapt to an increasingly mobile customer base.
  • Bolstr explains the basics of crowdfunding on NBC Chicago.
  • Loop Wallet app now available on Android.
  • Maps Credit Union chooses ACI Worldwide’s online banking platform.
  • Javelin Strategy takes a look at bill pay alternatives to Manilla, including Finovera.
  • BodeTree brings in $2 million in Series A round.
  • SavedPlus, LikeFolio, Wallaby, FutureAdvisor, Simple and Wealthfront earn spots on CNN Money’s list of the 15 best financial websites and apps.
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.

Finovate Alumni News– April 24, 2014

  • Finovate-F-Logo.jpgLinkable Networks teams up with Ohana to deliver card-linked savings.
  • Actiance launches its Actiance Technology Partner Program.
  • Check Point Software Technologies launches new 41000 Security System, expanding its network security portfolio.
  • The Paypers interviews ThreatMetrix CEO, Reed Taussig.
  • Kantox announces formation of European Advisory Board.
  • doxo launches real-time business analytics and market data for service providers.
  • The Simple customer experience as experienced on a 3 week bike trip to FinovateSpring.
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.

The Simple Customer Experience

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It’s rare to have an enjoyable experience with customer service, especially when it is tied to something as emotional as personal finances.

This week, I had a pleasant surprise with Simple’s customer service, widely acknowledged for having a customer experience that is so human it’s innovative. 

Here’s what happened:

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My bike waits for me as I work from a coffee shop in Bandon, OR

I’m on a three-week trip riding my bicycle south along the west coast to FinovateSpring next week. I’ve been working largely from public wifi hotspots at coffee shops and libraries, so I’ve been very wary of the security of my financial information.

I’ve paid for most expenses using my Simple card. When I checked my account last week (under a private wifi network, of course!), here’s what I saw:
SimpleAcctMap
For a person who lives on the west coast and has been making purchases only while traveling down the Oregon coast, the map of my transactions looks as it should– except for one outlier. Florida!?
Upon discovering this inconsistency, I blocked the card to prevent any more unauthorized transactions. Simple is one of the pioneers of this feature.
Then, I immediately contacted Simple’s support via chat. Here’s the conversation:
Me:
Hello, I think there’s a fraudulent charge on my account from a merchant in Florida called CtVcom. 
Do you have any more information on them? The time and place of the transaction doesn’t seem quite right. Thanks.
Heather (Simple):
Hey Julie!
This is actually an ATM withdrawal from an ATM in Bellingham, WA–does that sound more familiar? 
We run our transaction data through a series of calculations in order to provide you with a clean merchant description. We’re typically pretty accurate, but it looks like we didn’t get this one right. I have no idea why it’s showing up as Florida when it was actually in Washington!
If you are ever curious about the details of a transaction, we list the original merchant data in your activity on Simple.com. To view it, select the transaction and click the ‘Edit’ button. The original merchant name will be listed below the modified version.
Let me know if this sounds more familiar, and give a shout if there’s anything else I can help you with!
Me:
Ah-ha! Thanks for the quick reply…
Yes. An ATM withdraw in the town where I live sounds quite right.
Thanks!

Heather (Simple):
No problem, Julie! Glad we were able to get this cleared up!
I just wanted to let you know that your card is still blocked as well. If this was the reason you blocked it, you can feel free to unblock it since it didn’t end up being fraudulent. 🙂
What was done correctly? 
    1. I received a quick reply
    2. The customer service rep (CSR) let me know the back story of how the mistake came about. By being transparent, Simple eased any fears I had of data-sharing, privacy breaches, or major problems with its back-end system.
    3. The CSR gave me instructions on how to figure out merchant information on my own. Empowering the customer with this knowledge has the potential to prevent future calls or chat sessions with CSRs.
Bottom line
Many banks fall short in customer service since thpersonal touch is difficult to scale.
While most customers appreciate being spoken to in a more informal manner, CSRs still need to make sure they remain compliant and don’t trigger any liabilities by slipping up. But there is a customer satisfaction payback to replacing industry jargon with easy-to-understand language, patience, and a smile.


Simple was acquired by BBVA in February. The bank has vowed to leave the Simple team in place. We hope that’s true. 

To see Simple’s platform in action, check out its demo from FinovateFall 2011.

Finovate Alumni News– March 8, 2014

  • Finovate-F-Logo.jpgActiance partners with Shoutlet to integrate Shoutlet’s social marketing capabilities with Actiance Socialite.
  • PayPal’s Braintree to waive the first $50k of processing fees for startups building on its platform through its new Ignition program.
  • On Deck raises $77 million in funding round led by Tiger Capital.
  • Mechanics Bank’s Bradley Leimer takes a look at the lessons from BBVA’s acquisition of Simple.
  • Simple, Moven, and Numbrs are listed in American Banker’s feature “6 Apps That Are Making Bankers Jealous.”
  • Recode reviews Loop. Check out its new payment tech at FinovateSpring next month.
  • The Tally’s Financial News Fintech Focus column features Kensho.
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.

Finovate Alumni News– February 25, 2014

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  • Netbanker considers why the BBVA Simple Bank deal is extraordinary.
  • American Association of Motor Vehicle Administrators selects Authentify for NSTIC Trusted Online Identities Pilot.
  • ThreatMetrix wins Most Innovative Anti-Malware Solution and Best Product Network Access Control Solution at 2014 Cyber Defense Mag Awards.
  • Tyfone unveils Fluide mobile banking platform.
  • PayPal to be the first payment provider on the latest Samsung Gear 2 smartwatches.
  • Lendio marks a year of record growth.
  • Kapitall announces $13 million in funding in round led by Linden Venture.
  • Wallaby launches Google Glass payment app.
  • ShopKeep POS wins global Gold Stevie Award for Sales & Customer Service for 2nd year in a row.
  • MasterCard partners with Syniverse to pilot location-based, anti-fraud service.
  • MoadBus to offer Allied Payment Network’s PicturePay.
  • ACI Worldwide to power online banking for Trustco Bank.
  • Bankers’ Bank to deploy Aptys SolutionsPayLOGICS originating and processing wire service.
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.

Why the BBVA Simple Bank Deal is Extraordinary

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I was on vacation when the Simple deal went down last week. So, today I read the 25 or so unique articles published Thursday and Friday on BBVA’s $117 million acquisition of Simple. Of the bunch, only Ron Shevlin dove under the covers as to why a global financial powerhouse plunked down nine figures for a relatively small prepaid debit card portfolio. His take: the brand.

I’ve been a huge Simple junkie, publishing 22 posts on the startup in the past four years. And I was delighted it chose to make its first industry appearance at Finovate in Fall 2011 (video here). But I’m even more excited about this deal, which was remarkable for several reasons:
  • Other than ING’s regulator-mandated divestiture of its U.S. unit to Capital One, this is the first major retail digital bank acquisition in the United States EVER. Yes, EVER.  Since the dawn of what we called “Internet-only” banks in Oct 1995 (note 1), not a single one has been acquired at other than a fire sale (e.g., ING Direct purchase of Netbank after it was closed by the FDIC), (see note 2). 
  • The revenue multiple was off the charts. Simple says it processed $1.7 billion last year. Assuming this was all debit card volume and they split the revenues relatively equally with their processor, The Bancorp Bank (which is Durbin-exempt, note 3), the startup generated somewhat less than $10 million in revenues last year. That’s not at all bad for a bank in its first full year of business. Founder Josh Reich says they were on a path to profitability, not a small feat for a tech company with nearly 100 employees.
  • Banks are usually acquired for some premium of their assets and deposits. Simple had zero financial assets since it only collected deposits. We don’t know their deposit totals, but with an average of 65,000 customers (note 4) making $1.7 billion in purchases, that means each spent about $2,000 per month. Let’s say that each of its 100,000 accounts held double that on average ($4,000), the bank had around $400 mil in deposits at year-end 2013. I’m not sure what banks are paying for demand deposits these days, but it’s not 25%.
  • Simple raised $18 mil since inception, but we don’t know at what valuation. But with the $117 million cash deal, it appears that investors were rewarded adequately. It was no 10x exit, but it could have been 2x to 3x, or more.
  • BBVA paid almost $1,200 per customer. Given that Simple’s entire funding amount of $18 mil had already generated 100,000 customers ($180 per customer), clearly acquiring this customer base was not the main driver of the valuation.
_________________________________________________
What it means:
  • Moven, Holvi, Tink, Numbrs, and other digital-only banks will see a bump in their valuations. 
  • Y-Combinator and other accelerators will see a surge in retail banking startups (which leads to more great Finovate presenters)
  • Simple under BBVA will be a fantastic case study with plenty of material for fintech bloggers and analysts (and especially blogging analysts)
  • There will be more legacy financial institutions following this strategy (clearly, there were other bidders to push the valuation above $100 million); however, don’t expect a stampede. Two or three acquisitions in 18 years is hardly a trend.
  • BBVA could very well make Simple its ING Direct-like brand (“BBVA Simple”?) across multiple new international markets (hat-tip to Venture Beat for being the only tech blog to focus on the international opportunity).
  • At least for a few years, before the founding team scatters to new ventures, it will be useful to have a semi-autonomous unit in Portland building out the services.
Finally, I’ll need a new VC-backed retail banking startup to obsess over. Time to get my Moven card activated.
——————
Notes:
1. The first pure digital bank was Security First Network Bank (SFNB) which was dumped for $13 mil in 1998 after attracting $50 mil in deposits and $14 million in credit card receivables).

2. One could argue that E*Trade’s ill-fated purchase of Telebanc for $1.8 bil in 1998 qualifies, but Telebanc was primarily a direct bank built through the phone channel.
3. Interestingly, as part of BBVA, which is not exempt from Durbin price controls (as far as I can figure), Simple’s interchange rate will likely fall dramatically, making the revenue multiple much higher going forward.

4. The bank started the year with 30,000 accounts and now has 100,000. So, assuming growth was even over the year, the average annual number of accounts = 65,000.
5. For more on pure-play digital banks, see our full Online Banking Report here (published in late 2011, subscription).

Finovate Alumni News– February 24, 2014

  • Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Finovate-F-Logo.jpgNICE Systems named to Fast Company’s 50 most innovative companies list.
  • American Banker takes a look at BBVA’s acquisition of Simple.
  • MasterCard brings in-app payments to MasterPass; acquires m-wallet startup, C-Sam.
  • CNBC Finance hosts Kasasa CEO Gabe Krajicek to discuss the drive to local banks and credit unions.
  • Arxan Technologies partners with IBM to protect mobile apps against attacks.
  • HelloWallet launches Insights app to help HelloWallet users better understand their financial habits.
  • InterAksyon features TransferWise in column about transferring money overseas.
  • Realty Mogul’s real estate portfolio surpasses $85 million mark.
  • ExactCPA Tax Solutions introduces its app of the week: Kashoo Accounting.
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.