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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
It’s a holiday-shortened week here at the Fintech Rundown. But rest assured that we’ll have you covered on the the top fintech news headlines as 2024 moves toward a close.
We’re starting off with a series of stories in the embedded finance front, including an acquisition, a new launch, and a major fundraising.
Digital banking
Data-driven statement provider HC3forges strategic partnership with digital banking solutions company Apiture.
As both a conference producer and a news outlet, we’re always paying close attention to the topics that resonate most with you — our audience of fintech and banking professionals. To wrap up 2024 and brace ourselves of what to expect for 2025, we analyzed readership data to gain valuable insights into the stories, trends, companies, and products that mattered most to the industry this year to create the top 10 posts of 2024.
This list is compiled of posts published in 2024 that garnered the highest number of views and engagement in 2024. From breaking news to big IPOs, these were the stories you found most compelling. So, without further ado, here’s a countdown of the top 10 posts that captured your interest over the past year.
Travel and expense management company Mesh Payments has selected SoFi as its sponsor bank and has tapped SoFi-owned Galileo Financial Technologies as its payment processor.
Mesh Payments is an all-in-one corporate payments platform for travel and expense that integrates corporate cards, expense management, and travel bookings on a single platform. Mesh Payments offers SaaS enterprises cardless payments capabilities that enable full visibility, control, and intelligence to help them orchestrate, manage, reconcile, and ultimately reduce spending. The company, which processes more than $1 billion in annual payment volume, was founded in 2018.
Under the partnership, Mesh Payments’ expense and card infrastructure will tap SoFi’s financial framework and Galileo’s customizable, API-based payments processing platform. Mesh Payments anticipates that leveraging both SoFi as its sponsor bank and Galileo as its processing platform will help it offer more streamlined enterprise expense management, reduce inefficiencies, and bring solutions to market more quickly.
“We’re excited to partner with SoFi and Galileo, as both companies share our vision of delivering the most modern and innovative financial solutions for businesses,” said Mesh CEO Oded Zehavi. “They are the ideal partners to support our mission to provide companies with an efficient, forward-thinking approach to corporate travel and expense management.”
Founded in 2001, Galileo offers a payment processing platform that allows third-party fintechs and businesses to build and scale their own financial services offerings. The company’s client list includes DailyPay, Bluevine, Dave, MoneyLion, Monzo, and others. Galileo was acquired by SoFi in 2020 in a $1.2 billion deal.
Founded in 2011, SoFi has evolved from a lending platform into a nationally chartered bank that offers checking and savings accounts, investing tools, and insurance plans. The company landed its first sponsor bank deal in April of 2024 when it partnered with small business banking platform Rapid Finance.
“SoFi is proud to provide the financial backbone for forward-thinking solutions like Mesh Payments,” said SoFi Bank President Paul Mayer. “With SoFi and Galileo under one roof, we empower partners like Mesh Payments to harness Galileo’s advanced cloud-based banking core, enabling them to launch new products faster, scale seamlessly, and stay ahead of their customers’ ever-changing needs.”
Galileo Financial Technologies has expanded its partnership with The Bancorp Bank.
Though The Bancorp Bank, Galileo will leverage The Clearing House’s Real Time Payments network to offer real-time payments to help its retail and commercial clients transfer money in real time, 24-hours a day.
The Clearing House reported record usage of its RTP network in the third quarter of last year, when it reached 64 million transactions valued at $34 billion.
Under the scaled up agreement, Galileo and The Bancorp will leverage The Clearing House’s Real Time Payments (RTP) network to fuel real-time payments services. By offering instant money movement between bank accounts, the two will enable Galileo’s fintech clients to help their retail and commercial customers solve cash flow challenges by gaining fast access to their funds.
With the RTP network, real time money movement is available on any day of the year, 24-hours a day. This availability and speed not only solves cashflow issues, it also helps businesses deal with time sensitive transaction and ultimately enhances customer satisfaction.
“Consumers and businesses expect payments to be available instantly, and offering real-time payment capabilities ensures Galileo’s clients can deliver on that expectation,” said Galileo Financial Technologies Chief Product Officer David Feuer. “With this integration between The Bancorp and Galileo, we can offer a swift, efficient way to ensure faster money movement today.”
The Clearing House, which launched its RTP network in 2017, has seen growth in demand for real-time payments. In the third quarter of last year, the company reported that usage of its RTP network hit a record high, reaching 64 million transactions valued at $34 billion. The Clearing House competes directly with the U.S. government’s real-time money service, FedNow, which launched in July of 2023. Currently, more than 350 financial institutions enable their retail customers and 150,000+ business clients to send payments over the RTP network.
Founded in 2001, Galileo is a payment processing platform that allows third party fintechs and businesses to build and scale their own financial services offerings. The company’s client list includes DailyPay, Bluevine, Dave, MoneyLion, Monzo, and others. Galileo was acquired by SoFi in 2020 in a $1.2 billion deal.
Headquartered in Wilmington, Delaware, The Bancorp Bank provides fintechs with the people, processes, and technology to meet their banking needs. The bank is the third-largest bank by assets, has more than 75 million prepaid cards in distribution and processes 1.1 billion transactions each year. Damian Kozlowski is President and CEO.
SoFi’s SoFi at Work is launching a Student Loan Verification service this week that will help employers match their workforce’s student loan repayments with retirement contributions.
The tool comes in response to Congress’ SECURE 2.0 Act that allows employers to match their employees’ student loan repayments with retirement contributions.
In addition to Student Loan Verification, SoFi at Work also helps employers offer student loan refinancing, repayment options, a debt navigator tool, financial education resources, and more.
SoFi’sSoFi at Work program is launching a new Student Loan Verification (SLV) service this week. The new tool will help companies match their employee’s student loan repayments with retirement contributions.
SLV will be added to SoFi at Work’s portfolio of employer financial wellness benefit solutions. The launch comes in response to Congress’ Securing a Strong Retirement Act (SECURE 2.0), which allows employers to match their employees’ student loan payments with contributions toward retirement plans.
“At SoFi, we’re dedicated to helping people get their money right, and SECURE 2.0 and the provision that makes it easier for companies to support all employees’ financial well-being is a great example of that,” said SoFi at Work Vice President, Business Lead Barrett Scruggs. “Our Student Loan Verification service makes it easy for companies to put this emerging, yet highly impactful benefit into action for a more inclusive future.”
According to a 2019 study from MIT, 84% of adults with student loan debt say it has impacted the amount they’re able to save for retirement. With SLV and SECURE 2.0, companies can enable their workers to contribute to their 401(k) or 403(b) plan while paying down their student debt.
Launched in 2016, SoFi at Work aims to help employers offer their workforce student loan refinancing, repayment options, a debt navigator tool, financial education resources, and more. Seven out of 10 Fortune 500 tech firms currently offer the perk to their employees.
SoFi is saying, “Welcome home!” to Wyndham Capital Mortgage this week. The California-based fintech acquired the mortgage lender yesterday in an all-cash transaction for an undisclosed amount.
Headquartered in North Carolina and founded in 2001, Wyndham Capital has worked with more than 100,000 borrowers.
SoFi, which is acquiring Wyndham Capital’s technology and its employees, expects the purchase will broaden its mortgage-related offerings and minimize its reliance on third-party partners and processes.
“At SoFi, we’re on a mission to help people get their money right and purchasing a home is often one of, if not the, biggest financial decision individuals make in their lives,” said SoFi CEO Anthony Noto. “Today’s acquisition of Wyndham Capital will not only allow us to scale and keep pace with accelerated growth, but also allow us to foster that growth in a way that brings value to our members through sales and operational efficiencies and helps members get their money right when it comes to one of life’s most significant financial milestones.”
SoFi, which presented at Finovate’s developers conference in 2017, launched in 2011 to disrupt the student lending market. Since then, the company has added a variety of banking products– including personal loans, auto refinancing, credit cards, investing, checking, savings, insurance, and others– to become a more holistic banking option for consumers. SoFi sealed its status as a bank last January, when it received approval from the U.S. Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company.
It’s a reasonable time for SoFi to double-down on mortgages to diversify from its flagship offerings, student loans. The company may be starting to feel heat from the loss of revenue from its student loan refinancing tools. In fact, SoFi went to such an extreme last month as to sue the Biden administration for its continued pause on federal student loan repayments. The fintech argues that the moratorium, which has been extended eight times over three years, has no legal basis.
SoFi estimates it has lost $6 million in profits from the latest extension and, expects losses to total $30 million if the moratorium continues through August. “In essence, SoFi is being forced to compete with loans with 0% interest rates and for which any ongoing repayment of the principal is entirely optional,” SoFi argues in the lawsuit.
The lawsuit is currently being challenged in the Supreme Court and is expected to be resolved by June.
Digital banking platform SoFi is leaving the ranks of its challenger banking competitors to become a fully fledged bank. The California-based fintech announced today it has received approval from the U.S. Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company.
SoFi CEO Anthony Noto called today’s regulatory approval an “incredible milestone,” adding, “With a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with high-yielding interest in checking and savings, it will also enhance our financial products and services to ensure they efficiently meet the needs of our members, business partners, and communities across the country, while continuing to uphold a high bar of regulatory standards and compliance. This important step allows us to add to our broad suite of financial products and services to better be there for our members during the major financial moments in their lives and all of the moments in between.”
The approval comes with one contingency. The OCC said that SoFi Bank may not engage in any crypto-asset activities or services. SoFi currently offers a crypto wallet and trading platform, but as it is held under SoFi Digital Assets, LLC, the OCC’s contingency shouldn’t be an issue.
This approval comes in the wake of SoFi’s proposed acquisition of Golden Pacific Bancorp, a Sacramento, California-based bank holding company with consolidated assets of $150 million. The deal, originally announced in March of last year, is set to close next month for $22.3 million.
After the acquisition closes, SoFi plans to maintain Golden Pacific’s community bank business and footprint, including its three physical branches. Additionally, SoFi will help Golden Pacific pursue its national, digital business plan by contributing $750 million in capital.
As with most digital banks, SoFi relied on partnerships with traditional banks to hold deposits, issue loans, and provide FDIC insurance. Until next month’s acquisition closes, SoFi’s partner banks include Bank United, National Association; MetaBank Sioux Falls, SD; HSBC Bank USA, National Association; EagleBank, Bethesda, MD; East West Bank, Pasadena, CA; TriState Bank Capital Bank, Pittsburgh, PA; and Wells Fargo Bank, N.A, Sioux Falls, SD.
SoFi Technologies will continue to be traded on the NASDAQ under the ticker SoFi, but it will become the parent company of SoFi Bank, National Association. SoFi was founded in 2011 and has a current market capitalization of $11.4 billion. The fintech went public last year after a SPAC merger with Social Capital Hedosophia Holdings V.
A newly announced collaboration between AI-powered credit and analysis technology company Pagaya and personal financial services innovator SoFi will help more eligible consumers find and secure financing. The partnership will enable SoFi members to leverage Pagaya’s AI network to access a wider range of financial solutions in what Pagaya said is the largest deployment of its technology in the fintech space to date.
“We are excited to leverage SoFi’s sophisticated tech platform, strong brand, and consumer appeal to originate loans through Pagaya’s AI network,” SoFi CEO Anthony Noto said, “extending its business to a broader audience, so more people can access credit and achieve their financial goals.”
Pagaya’s technology and infrastructure enables financial institutions, including lenders and fintechs, to offer their customers access to financial products beyond those available via traditional credit models. Using both AI and machine learning, Pagaya lowers risk for lenders and helps them make better credit decisions. The goal is to provide a better, more positive experience for borrowers, and higher conversion rates for loan providers, as well as improving the overall credit ecosystem.
“As Pagaya grows, it is imperative that we partner with companies that share our vision of providing increased efficiency through our AI network for lenders and access for its customers,” Pagaya CEO and co-founder Gal Krubiner said. “Working with a company such as SoFi, we are able to apply our artificial intelligence in a way to not only help SoFi extend capital to more people, but do so in a way to create less risk for our partner. This creates a symbiotic, win-win-win ecosystem across all parties.”
Founded in 2016 and maintaining offices in Tel Aviv, New York, and Los Angeles, Pagaya became a public company earlier this fall in a $9 billion SPAC merger with EJF Acquisition Corporation. Earlier this month, Pagaya appointed former JP Morgan CMO Leslie Gillin to the post of Chief Growth Officer. Gillin arrives at a time when the company is looking to expand into new markets including personal and auto loans, credit cards, point-of-sale financing, single-family residencies, and more.
SoFi is an alum of our developers conference FinDEVrNewYork in 2017, which the company participated in with financial data platform Quovo. In the years since, SoFi has grown into a digital financial services giant with more than $50 billion in funded loans, and more than two million members who have paid off a total of more than $22 billion in debt. Additionally, the company recently has launched solutions such as SoFi Money and SoFi Invest which offer cash management (including early payday) and brokerage services, in a major expansion beyond its roots as online loan financing and refinancing innovator.
SoFi is a publicly traded company on the NASDAQ under the ticker SOFI and has a market capitalization of more than $16 billion. SoFi is headquartered in San Francisco, California.
Alternative banking services company SoFi unveiled a new product last month that will enable eligible members to participate in upcoming IPOs.
The tool will sit within SoFi Invest, a suite of investment tools that offers automated investment services, retirement accounts, a cryptocurrency wallet, and more.
Here’s how it works- users with at least $3,000 in their Active Invest accounts can select the IPOs they’d like to participate in by submitting an indication of interest. Once the IPO is live, investors will receive a notification asking to confirm their order and secure their shares.
If you’re a fintech veteran, this concept may sound familiar. There have been a handful of companies that have opened up IPO participation for retail investors, which are generally excluded from IPOs since they don’t generate the same revenues as institutional investors or high net worth individuals.
The first fintech to offer IPO access to retail investors was Loyal3, which was founded in 2008. The company launched a social IPO platform in 2014 that partnered with pre-IPO companies to enable them to include consumers, employees, partners, and fans in their IPO. Investors were required to purchase a minimum of $100 in stock but were not charged a fee. Loyal3, however, may have been ahead of its time. The company closed its doors in 2017.
Linqto, which recently demonstrated its platform at FinovateWest 2020, allows accredited investors to invest in pre-IPO unicorns. The company requires investment minimums ranging from $5,000 to $10,000. Among the companies currently available to investors are Impossible Foods, Ripple, and Nerd Wallet.
Yet another fintech in this arena is MarketX, a cross-border marketplace that allows investors to browse deals and invest in pre-IPO companies across the globe. MarketX currently offers investors access to pre-IPO companies in the U.S., China, Singapore, Indonesia, India, the UAE, and more. While MarketX advertises to accredited retail investors, the company requires a minimum of $50,000, a figure that is much higher than others working in this space.
With higher minimums and accredited investor restrictions, the IPO investment offerings from Loyal3, Linqto, and MarketX aren’t as accessible as SoFi’s proposed IPO investment tool. Stock trading app Robinhood, however, is also rumored to be entering this space with an offering that will compete on the same level as SoFi.
Reuters reported last month that Robinhood plans to democratize IPO investing by enabling its users to buy into IPOs. According to the news source, Robinhood is allowing its users to buy into its own IPO (which is slated for later this year) and will then use the technology it built to create a more general IPO investment tool for its 13 million users.
SoFi showcased at FinDEVr New York 2017 in a presentation about leveraging bank authentication. FinDEVr will be returning to the Finovate lineup with its own stage at this year’s FinovateSpring digital event. Check out the event page to learn more.
Digital financial solutions provider SoFi is getting into the vehicle loan refinance game. The online lender formed a partnership with MotoRefi to offer users yet another reason to use its services.
Founded in 2016, MotoRefi connects users with lenders and manages the back-end documentation process with each state’s motor vehicle department.
According to SoFi Executive Vice President Jennifer Nuckles, the addition of an auto loan refinancing tool was a logical one since many of the company’s users carry large balances on their auto loans.
Additionally, the nation is an increasingly fertile ground for a car loan refinancing tool. In the past decade, the number of vehicle loans has grown by 41%. Today, auto loans account for 9% of all household debt, with 114 million Americans carrying a total of $1.37 trillion in auto loans.
Through today’s partnership, MotoRefi will have access to SoFi’s two million customers via an integration on SoFi’s website. MotoRefi is banking on this increase in exposure; the company expects to process $1 billion in loans this year after handling $250 million last year.
Overall, the addition of the new service is another step toward making SoFi into a more “bank-like” environment. The California-based company, which originated in student loan refinancing, has since expanded to offer personal loans, home loans, investing tools, a checking account, rewards, budgeting tools, and more.
Launched last month, SoFi’s latest tool offers investors early access to IPOs. Users with at least $3,000 in their account can purchase shares of companies as they go public. This type of access to IPOs, which is generally not available to individual retail investors, will help SoFi reach the new generation of traders that have entered the stock market since the pandemic hit last year.
Fintech connoisseurs may notice the irony in SoFi’s new IPO investment tool. The company itself recently eschewed a formal public listing for a SPAC merger with Social Capital Hedosophia Holdings.
SoFi has spent the past few years broadening its focus. What launched as an alternative lending company has emerged as a platform that provides a deeper breadth of banking services including insurance, checking accounts, credit score monitoring, investing, estate planning, and small business financing.
After building all of these tools, SoFi began focusing on building something different– community. The fintech offers a membership program with a range of perks including career coaching and financial planning.
Today, the company is leveraging its community in the launch of social trading and investing features. The new capabilities allow users to share their investment portfolios and discover and follow the holdings, watchlists, and activity of fellow members who opt in to the feature.
“According to SoFi’s research, about 70% of SoFi Invest member respondents indicated that they regularly (at least weekly) discuss their investments with family members, peers, or colleagues,” said SoFi CEO Anthony Noto. “Our new social investing features not only help us live up to our name of Social Finance, but provide ways for investors to see specifically what members on the platform are doing with their investment decisions, discover new investment ideas, and see how they stack up in their investing performance. Given the importance of investing early and consistently, we are thrilled to be able to provide a more informative, engaging, interactive mobile investing experience rooted in building better investing habits.”
To encourage social interaction, SoFi’s new tools allows users to comment on and react to the others’ trades and compare their performance on dynamic leaderboard.
For privacy purposes, participation is optional and members are not automatically enrolled. Additionally, the amounts of investment portfolios are hidden from other users.
If you’ve studied fintech for any length of time this should sound familiar. U.K.-based eToro launched its CopyTrading platform in 2011. This social investing platform is different from SoFi’s in that it pays top investors when others copy their trades.
Six companies that have demonstrated their fintech innovations on the Finovate stage have been recognized this year by CNBC as part of their Disruptor 50 roster for 2020.
This year’s list, the eighth in the series, is marked by the high number of billion-dollar companies, or “unicorns.” Fully 36 of the firms in the 2020 CNBC Disruptor 50 have reached or surpassed the $1 billion valuation mark. Combined, the 50 companies have raised more than $74 billion in VC funding and achieved an implied market valuation of almost $277 billion.
The companies making the cut range in industry from cybersecurity and healthcare IT to education and, of course, fintech. In fact, the top-ranked company in the 2020 Disruptor 50 is none other than Stripe, the $36 billion payments platform founded in 2010. Stripe earned a #13 ranking in last year’s Disruptor 50 roster, and likely owes its first place appearance this year to a major $600 million funding raising – the company’s largest to date – and the economic and social consequences of the global health crisis.
“With many people throughout the world under lockdown to prevent the spread of Covid-19,” CNBC’s capsule on the company noted, “the move to shopping online has never been greater. That’s good news for digital payments platform Stripe.”
Stripe was not the only fintech to earn high marks from the 2020 Disruptor 50’s methodology. In addition to the half dozen Finovate alums below, some of the other fintechs on this year’s roster include:
Virtual bank WeLab (Hong Kong)
Digital mortgage company Better.com (New York City)
“Buy now pay later” e-commerce company Affirm (San Francisco, California)
Challenger bank Chime (San Francisco, California)
Banking app Dave (Los Angeles, California)
Microfinancier TALA (Santa Monica, California)
Trading and investing platform Robinhood (Menlo Park, California)
Also earning spots in this year’s list were a pair of insurtech companies, Lemonade and Root Insurance, as well as cybersecurity and biometric authentication firms SentinelOne and CLEAR, respectively.
Here’s a look at the Finovate alums that made this year’s list.
