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Tracking fintech, banking & financial services innovations since 1994
“We’re gratified by the industry’s tremendous interest and willingness to devote time and energy to help us develop the FedNow Service,” Esther George, executive sponsor of the Federal Reserve’s payments improvement initiatives, said. George, who is also President and CEO of the Federal Reserve Bank of Kansas City, added that the pilot has had to “adjust” to accommodate greater than expected interest.
The idea behind the service is to expand the reach of instant payment services offered by financial institutions and enable businesses and individuals to send and receive instant payments, with full access to their funds within seconds. The FedNow Service will leverage the Federal Reserve’s FedLine network, which connects to more than 10,000 financial institutions directly or via their agents.
The pilot program is designed to review the technology’s features and functionality, assess the user experience, and greenlight the product for further testing and eventual general availability. Participating institutions will be retained, post-launch, to provide additional review and advice with regard to issues like adoption roadmap, industry readiness, and overall payments strategy.
“The FedNow Service marks a turning point in the industry’s move to making real-time payments a reality,” Booshan Rengachari, founder and CEO of Finzly, explained. Finzly is one of Finovate’s newest alums – most recently demoing its technology at FinovateWest Digital last fall – and is one of the participants in FedNow’s pilot program.
Rengachari further suggested that this “turning point” was a moment his company had anticipated. “We created our Payment Hub specifically to help FIs prepare and go to market faster with newer RTP networks,” he said. Finzly’s CEO added that this helps “address the challenges of offering single payment API for multiple payment networks without having to run disparate payment systems from multiple vendors.”
The 10 Finovate alums participating in the FedNow project are listed below.
To steal a line from Rob Base and DJ EZ Rock, when it comes to innovation in fintech, it takes two to make a thing go right. Whether the “thing” is an end-to-end digital transformation or creating the technology infrastructure to enable firms to build and market their own innovations, collaboration and partnership with fintechs increasingly seems to be the path that the most forward-looking banks and other financial institutions are pursuing.
With this in mind, here’s a look at some of the more interesting recent partnership announcements over the past month – with an eye toward what these collaborations might be saying about the near-term future of fintech.
DBS Bank: Headquartered in Singapore. Total assets of $420 billion (SGD 579 billion) in 2019. Largest bank in Southeast Asia. Operates in 18 markets around the world.
Objective: The new build will allow the bank to develop “transformative intelligent applications” and to bring those solutions to market faster.
Orange: Telecommunications corporation headquartered in Paris, France. Fourth largest telecom in Europe and one of the ten largest in the world with 26 million customers. Total assets of $124 billion (€106 billion) and revenues of $49 billion (€42 billion) as of 2019.
Objective: Partnership will bring savings and micro credit services to underserved customers in Cote d’Ivoire, Burkina Faso, Mali, and Senegal.
Lloyds Banking Group Headquartered in London, U.K., Lloyds is the country’s largest digital bank with 16.9 million active customers online and 11.5 million on mobile. Founded in 1765, the bank currently has total assets of more than $1 billion (£833 billion).
Project: Along with partners Google Cloud and Microsoft, Form3 will help the U.K.-based bank “investigate and develop” a cloud-payments-as-a-service platform.
Objective: The collaboration, which also includes a minority equity stake in Form3, will simplify Lloyd’s payment capabilities and support enhanced data and new overlay services.
Banca Ifis: Specialty commercial and corporate banking firm for SMEs headquartered in Venice, Italy. The firm has more than 130,000 retail clients in the country, and online funding and deposits totaling more than $4.7 billion (€4 billion).
Objective: Raisin’s customers in Germany will gain access to deposit solutions available from Banca Ifis. The collaboration will enable German customers to take advantage of relatively higher interest rates available in Italy.
Other fintech/financial institution partnerships of note this month:
Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.
“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”
Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.
Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.
Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.
“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.
ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.
Here is a round up of recent news from our Finovate alumni.
Sezzleunveils new logo along with its first annual report.
Flybitsexpands its executive team in New York, Toronto, the U.K., and Dubai.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capitalappoints Kevin Fink at CTO and Patricia Elliott as CSO.
InCommlaunches Roblox gift cards in France and Germany.
Finovate Alum Features and Profiles
Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.
Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.
Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.
Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?
Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.
Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.
SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.
Last week, the international fintech buzz was all about the booming investment in African startups. As you can see in our sub-Saharan Africa section below, that buzz continues as analysts wonder how African fintechs can best leverage their good financial fortunes of late.
But this week, it’s all about Latin America as fintechs from Mexico to Argentina lock in triple digit investments. What’s especially interesting is that two of the week’s biggest beneficiaries – Konfio and Uala – have the same participating benefactor in SoftBank.
The investment in Argentina’s Uala was the first time the Japanese-based firm had funded a company from Argentina, but not SoftBank’s first funding in the region. The firm invested $1 billion in Colombian delivery app Rappi in April of this year. SoftBank has a deeper history investing in Mexican startups, having funded payments startup Clip and used car buying platform Kavak. SoftBank is also especially active in Brazil; the firm led a $140 million round for the country’s e-commerce solution provider VTEX in November.
FinovateEurope Goes to Berlin!
It’s not too early to start thinking and planning for 2020 – especially with our first conference right around the corner in February.
After six years of basing our annual European fintech conference in London, Finovate is crossing the channel and setting up our stage in Berlin, Germany next year. Our new FinovateEurope location will also feature a new event format designed to ensure attendees maximize their time at the conference. Take a look at our developing agenda to see what we have in store February 11th through the 13th.
Here’s our weekly look at fintech around the world.
Singapore’s FinAccel, maker of Kredivo, raises $90 million in round led by Asia Growth Fund and Square Peg.
Maybank Group, the fourth largest bank by assets in Southeast Asia, goes livewith Avaloq’s banking suite.
South Korea announces plans to launch opening banking system before year’s end.
Vymobrings AI-powered sales coaching to insurance giant Sompo.
Can Africa’s fintech startups learn from the experience of M-Pesa? TechCrunch considers the opportunities now available thanks to recent positive funding trends.
A partnership between Smartstream and Union Systems will help African FIs digitize their post-trade environments.
QuartzAfrica takes a look at the “niche ecosystems” that are developing amid Africa’s rapidly expanding fintech industry.
Central and Eastern Europe
Berlin, Germany-based SME digital banking platform Penta teams up with SumUp.
First Investment Bank (Fibank) goes live with the first, PSD2-compliant, open banking platform in Bulgaria.
Tinkoff GDRs will be included in MOEX Russia indices next month.
Middle East and Northern Africa
Sudan’s Nile Bank is the latest FI to choose Oracle’s Flexcube core banking solution.
Temenosteams up with Egyptian National Post Organization.
Dubai Financial Services Authority inks fintech pact with Luxembourg’s Commission de Surveillance du Secteur Financier.
Central and Southern Asia
DriveWealthhelps Indian investors access U.S. stocks via new partnership.
Indian banking technology provider TCS Financial Solutions migrates three credit unions to a cloud-version of its TCS Bancs system.
Paysendintroduces worldwide money transfers to Uzbekistan.
Sri Lanka’s central bank examines the possibility of applying blockchain technology to streamline KYC processes for FIs.
Latin America and the Caribbean
Uala, a money management app from Argentina, raises $150 million in Series C round led by Tencent and SoftBank.
Mexican SME credit assessment specialist Konfio closes $100 million investment from SoftBank.
MercadoLibre picks up $125 million loan from Goldman Sachs.
As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.
Egyptian National Post Organization (ENPO) has selected Swiss technology firm Temenos and its T24 Transact core banking system, replacing 20 legacy systems in the process, reports Alex Hamilton of Fintech Futures (Finovate’s sister publication).
T24 Transact will be deployed in the cloud alongside the vendor’s Infinity digital front office solution. Both will be used to underpin the firm’s drive to meet the Egyptian government’s financial inclusion initiatives.
ENPO has a network of 4,000 branches via its iPost, Post Express, and Post Cars channels. It provides financial services, including current and savings accounts, instant remittances, electronic collection with notification services.
Temenos said that it will be delivering a “single, packaged and upgradeable banking platform” and help EMPI create an “omnichannel, unified teller for all financial and non-financial services.”
“Egypt is a country of great importance for Temenos; we are the leading banking software provider serving over 12 banks in the country and have been in the region for over two decades,” said Andreas Andreades, executive chairman at Temenos.
Egypt’s National Financial Inclusion Initiative, sponsored by Egypt’s Government, aims to promote the use of digital financial services throughout the nation.
“Temenos is committed to enabling Egypt’s Digital Economy Transformation and Financial Inclusion program,” added Andreades. “We believe that ENPO’s end-to-end digital transformation will help them realize this digital vision and promote financial inclusion in Egypt.”
Temenos demonstrated its Connect Mobile Banking solution at FinovateEurope 2015. The company is also an alum of our developers conferene, FinDEVrSiliconValley 2015, where it discussed the evolution of and opportunities in its B2B financial apps marketplace.