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Sila Founder and CEO Shamir Karkal on DeFi, TradFi, and Everything in Between 

Sila Founder and CEO Shamir Karkal on DeFi, TradFi, and Everything in Between 
By Julie Muhn (@julieschicktanz) Posted on
Categories: Interview, Speaker series

The fintech industry talks a lot about bank-fintech and fintech-bank relationships. Everyone in this industry will proudly declare how essential these partnerships are for everyone in the value chain. However, the recent introduction of crypto and decentralized finance (DeFi) is complicating things. How can a traditional financial (TradFi*) institution like a bank align itself with a DeFi startup or get involved in crypto?

For insight, we spoke with Sila CEO and Founder Shamir Karkal. Karkal co-founded Simple, one of the first digital banks, in 2009 and sold the company to BBVA in 2017. The following year, Karkal founded Sila, a company that offers banking, digital wallet, and ACH payments APIs to help companies integrate with the U.S. banking system and blockchain quickly, securely, and in compliance.

In our conversation, Karkal highlights the intersection between TradFi and DeFi and examines ways the two can work together while still regarding necessary compliance measures.

What are some ways you are currently seeing crypto businesses and TradFi organizations interacting?

Shamir Karkal: Unquestionably, crypto is becoming part of life. It is becoming part of everyday finance. We had a massive crypto boom in 2021 and now we are experiencing a crypto bust. But public markets and fintechs have performed equally as bad – or worse – than crypto. Over the last few years, traditional finance has been waking up to the crypto space. They take it seriously now.

During mid-to-late 2020, most TradFi organizations thought of crypto as a passing fad, a new dotcom boom. Today, there is no more dismissal of it. The top levels of large banks understand that crypto is here to stay – that it is an important part of the future of finance. Clearly, how this future will look in detail is still to be seen. Some TradFi organizations have embraced crypto whole-heartedly, such as Cross River bank and Silvergate bank, but there are also others still on the fence.

Crypto has scaled dramatically in 2021, which – ironically, some might say – has made crypto businesses appreciate traditional finance a lot more. They are not fans, not by a long shot. But, for example, they understand that compliance is not optional, and that one needs to comply with the law in one’s jurisdiction. As crypto businesses matured, reality has set in partially because when you‘re big, ignoring the law is not an option. In fact, crypto businesses often have a better understanding of regulations than fintechs. Because most answers are subject to change in the world of crypto, participants need to understand and follow very closely how things evolve. 

Some of the largest TradFi organizations such as JPMorgan went as far as launching their own stablecoin (JPMcoin). All are going to have similar projects. In my view, big banks have no ability to compete head-to-head with anybody in the crypto space. However, they are perfectly positioned to provide services to the winners in the crypto space– to the big exchanges, the big processors. All of those firms need all the services that traditional finance provides. Providing financial services to crypto winners is where the money is to be made. The foundation of the future of finance is still the financial services that today are supporting any other businesses. 

What types of partnerships do you expect to see in the future?

Karkal: To partner is in the interest of both crypto and traditional financial institutions. Crypto businesses are using traditional finance to broaden and speed up adoption of crypto services. True, a lot of people want to get into crypto. Still, everyone who does today has money in a bank account or a debit card. Even if your business is all about crypto, you need to create the bridge to allow people to move money from here to there. 

When it comes to regulation, what do banks need to look for when partnering with crypto startups?

Karkal: In technology or crypto, it is often said that you need to look for teams who move fast and break things. That is not true in banking. Banks need to look for projects that have good teams, are well funded, and where teams have an understanding of the compliance issues they will face. Because you can only develop a plan to deal with problems after they are recognized. One key question to ask is, “Do you have an opinion from an experienced lawyer?”

My advice is to look for real teams with real people that are serious about a long-term relationship. Beware! There are plenty of scams out there. Don’t support people who are only interested in making a quick buck, or the next ponzi coin (a real thing).

Crypto is also fraught with fraud. There are many, many different types of fraud: fraudulent businesses, payments fraud, ACH fraud, etc. Banks have been combatting these issues longer than crypto businesses. They stand to know more about them and can help. The key is to identify crypto businesses that built out the necessary capabilities, and that get advice from the good lawyers in the space. That’s a good litmus test. 

How can banks position themselves as good partners for crypto companies?

Karkal: The key is to figure out which products and services the bank is willing to offer. That sounds basic, but a bank has to ask itself if it is willing to service a crypto company. Is it ready to be their corporate bank? To do payment processing? To be a custodian for their funds, or their customers’ funds? After figuring out what a bank is willing to do, the second step is to go do it with some startups. Some banks act as if they want to partner with crypto businesses, but then their compliance processes are so onerous, it just won’t work. They end up standing in their own way. My advice is: if you’re serious, go do it with a couple of crypto companies first before making a big marketing push. If you’re successful, word will spread through Discord or Telegram channels. And, suddenly, you’ll find other projects and companies that will be coming to you. 

Here is the rap. The question is really, “Can you get to the point of opening an account?” Remember: crypto businesses do not have the profile of traditional customers. It might come as a Delaware subsidiary of a company registered in the Cayman Islands with senior people sitting all over the world. As a highly regulated bank, what is your process for this setup? You need to figure out your compliance piece to make such a setup work.  

I know of crypto businesses that are public companies abroad, are serious players, and yet have trouble opening corporate bank accounts in the U.S. As a bank, you need to understand that there is one thing crypto businesses don’t have: patience. They won’t wait 12 months while a bank’s internal committee rejects their application for the 13th time because they have a subsidiary in the British Virgin Islands that’s on a black list somewhere. You as a bank need to figure out this and related processes first, before your sales people are soliciting crypto businesses. 

*TradFi refers to traditional financial institutions as well as fintechs.

Photo by Shubham Dhage on Unsplash

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Klarna Partners with Marqeta to Launch its New Card

Klarna Partners with Marqeta to Launch its New Card
By David Penn Posted on
Categories: Alumni News, Daily news, Klarna, Marqeta
  • Marqeta announced a collaboration with fellow Finovate alum Klarna to power the company’s new payment card.
  • The new card will enable Klarna customers to use the company’s Pay in 4 payment option in physical stores.
  • This week’s partnership builds upon a relationship the two companies have enjoyed since 2018.

A pair of Finovate alums have teamed up to offer a new transparent alternative to traditional credit cards.

Modern card issuing platform Marqeta reported this week that it is working with banking, payments, and ecommerce platform Klarna to power Klarna’s new payment card. The card will bring Klarna’s Pay in 4 service to a physical Visa card, and builds on a payment card partnership between the two companies that extends back to 2018. Marqeta currently enables the creation of one-time cards on Klarna’s app. The new Klarna Card will give customers the same control, convenience, and flexibility when shopping in physical stores that they currently enjoy when using Klarna’s Pay in 4 at the point of sale or via the Klarna app.

“Our U.S. customer base is growing rapidly and we’ve seen tremendous demand for our new Klarna Card offering,” Klarna Chief Commercial Officer David Sykes said. “By expanding our partnership with Marqeta, we’re leveraging their payments expertise to provide our customers with an unmatched user experience that will ultimately help our business grow.”

This latest collaboration comes just months after the two companies expanded their partnership into 13 new European markets. Klarna will leverage Marqeta’s Just-in-Time Funding functionality to gain control over the full transaction flow, and use Marqeta’s technology and 300+ open APIs to deliver customizable experiences and support Klarna’s international expansion.

“Marqeta’s continued partnership with Klarna is a testament to all the payment experiences that our modern card issuing platform can enable,” said Marqeta CEO and founder Jason Gardner. “We’re proud to offer a flexible, scalable card platform that can meet the demands of such a rapidly-growing and innovative company like Klarna.

A Finovate alum since 2012, Klarna now has more than 147 total active customers – 25 million in the U.S. – is active in 45 countries and facilitates two million transactions a day. Headquartered in Stockholm, Sweden, the company began the year with the launch of a physical payment card in the U.K. and, in March, announced the completion of its acquisition of comparison shopping service company PriceRunner. Sebastian Siemiatkowski is CEO.

Based in Oakland, California, Marqeta made its Finovate debut at our developers conference, FinDEVr Silicon Valley, in 2016. In the years since, Marqeta has issued more than 500 million cards via its platform and processed more than $110 billion in volume in 2021. In addition to its partnership with Klarna, Marqeta also announced this week that it was joining Mastercard’s Network Enablement Partners Program in the Asia Pacific. The move will enhance Marqeta’s ability to offer its APAC customers a faster path to live issuance.

“As one of Mastercard’s first Network Enablement Partners to be onboarded in the Asia Pacific region, Marqeta is well-equipped to deliver card issuances in record time, and to help their fintech customers scale at speed across multiple geographies,” Mastercard SVP of Digital Customer Solutions APAC Ben Gilbey said.

Photo by Olya Kobruseva

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Sowing the Seeds: Tales from Crypto’s Course Correction

Sowing the Seeds: Tales from Crypto’s Course Correction
By David Penn Posted on
Categories: Daily news

Bruised but not broken, the cryptocurrency market has taken more than a few blows as the prices of leading digital assets – from Bitcoin to Ethereum – have declined significantly in recent months. This may have taken some of the steam out of many cryptocurrency ventures. But there is no sign that interest in cryptocurrencies has been lost in any critical way. Here are three headlines from this week’s news that remind us that, despite its recent fortunes, crypto remains a key part of innovation in fintech.

Leading digital asset exchange Binance announced the closure of a $500 million venture fund for investing in Web3 and blockchain-based technologies this week. The fund will be led by the company’s venture capital arm Binance and features the support of a number of global investors including DST Global Partners and Breyer Capital.

“In a Web3 environment, the connection between values, people, and economies, is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of blockchain technology and crypto,” Binance CEO and founder Changpeng Zhao said.

Binance Labs has supported and incubated more than 100 firms from more than 25 countries since its inception in 2018. With an openness to projects ranging from incubation to early stage venture to late-stage growth, the fund anticipates supporting initiatives “with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social, and more,” Zhao said.

Liminal, a digital asset wallet infrastructure company, announced receiving $4.7 million in seed funding this week. The round was led by Elevation Capital, and featured participation from a sizable number of investors. Among the company’s backers in this round were traditional investors like LD Capital and Nexux Ventures, crypto-based investors like CoinDCX and Hashed, and individual investors including Andreas Antonopoulos and Balaji Srinivasan. Liminal plans to use the capital to support both hiring and product development.

Founded in 2021 by serial entrepreneur Mahin Gupta, Liminal is the first digital wallet architecture to provide the multi-party computation (MPC) and multisignature (MultiSig) that help secure digital assets across different blockchains. A plug-and-play platform, Liminal has processed transactions over $2.5 billion and automated transactions valued at $400 million. The company currently secures approximately $50 million in assets.

“With Liminal, we solve the very real problem of securing and scaling digital assets where users have to use different wallets and infrastructure for different protocols,” Gupta said. “Our three layers provide key management, operational automation, and compliance for enterprises.”

Speaking of seed funding, digital asset startup Cloudwall Capital secured $6.3 million in seed funding this week. The company specializes in risk management in the cryptocurrency space.

The round was led by LocalGlobe and Illuminate Financial. Cloudwall will use the funding to increase the size of its team to 15 members by year’s end. The company will also leverage the new capital to support further development of its digital asset portfolio management platform, Serenity. Cloudwall anticipates being able to launch an early access program by this summer.

“Digital assets underwent explosive growth between 2020 and 2021, with almost five years of growth taking place overnight,” Cloudwall Capital co-founder and CEO Kyle Downey said. “Recent market gyrations have only increased the case for a digital asset platform to manage risk so that institutional investors have the tools and platforms to help manage their portfolios and risks.”

Serenity will combine risk management with research to provide investors with an overview of their assets and potential for volatility. A cloud-based platform, Serenity will enable them to review their portfolio holdings and examine historical data – including blockchain data and data from centralized exchanges. Investors will be able to use Serenity’s statistical and machine learning algorithms to run simulations and stress tests on their portfolios to see how they will react to different market conditions.

“It’s becoming clearer to institutional investors that they should invest in digital assets if they aren’t already, but they don’t have the tools to help them embrace this new market in a way they are used to,” Cloudwall Capital co-founder and COO Jia Yng Wee said. “We’re building Serenity to provide this solution and (to support) the careful growth of this industry.”

Cloudwall Capital was founded in 2021. The company is headquartered in New York City.

Photo by Binyamin Mellish

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Fintech and the LGBTQ Community: 3 Resources for Banking and Financial Wellness

Fintech and the LGBTQ Community: 3 Resources for Banking and Financial Wellness
By David Penn Posted on
Categories: List series

June is National Pride Month, a time to honor and celebrate the Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ) community. Many of the contributions to fintech and financial services from members of the LGBTQ community go unnoticed. But what can no longer be overlooked is the growing number of resources in the financial services industry that are designed to serve the unique needs of LGBTQ financial services consumers. To this end, we’re taking a look at three companies that are dedicated to making banking and financial wellness easier for those in the LGBTQ community.

Daylight

Calling itself “banking for you and your chosen familly,” Daylight may be the pre-eminent, dedicated banking solution provider for the LGBTQ community. Founded in 2020, by “queer millennials” Rob Curtis (CEO), Billie Simmons (COO), and Paul Barnes-Hoggett (CTO), Daylight enables individuals and families to access a range of key banking services without worrying about supporting companies or initiatives that are detrimental to the LGBTQ community.

What services does Daylight provide? Like other banking solutions providers, Daylight offers a deposit account – backed by MetaBank – an Apple and Google Pay-compatible debit card, and financial wellness solutions via mobile app. The app has a round-up feature to help incentivize and ease savings, as well as goal-setting tools to help users plan for both expected and unexpected financial commitments. Daylight can be used by any U.S. citizen, 18 years or older.

“Our community has $1 trillion (in) spending power in the U.S. and yet 53% of LGBT+ people struggle to maintain regular savings,” Daylight Operations Associate Peyton Swift wrote recently on the Daylight blog. “That’s high-key unacceptable. We’re done letting the system ignore us. We’re building Daylight around our unique needs: different timelines, different kinds of families, different goals, and different futures.”

Superbia

New York-based Superbia Services was founded in 2017 as a “profit for purpose” entity focused on developing community-based financial products. In 2020, the organization launched the Superbia Credit Union, the first LGBTQ-focused profit-for-purpose financial institution with a nationally-oriented membership. Located in Michigan, Superbia CU is the first new credit union to receive a state charter in more than 33 years.

“When operational, Superbia Credit Union will benefit members through tailored products and services, more favorable rates, and grants made regularly to organizations that help support and advance causes of the LGBTQ community,” a statement credited to Superbia CU read. Myles Meyers, founder and CEO of Superbia Services noted that, for all the gains made by the LGBTQ community in recent decades, there are still major issues of discrimination.

“In the same way a bakery can refuse a cake, one bank’s discrimination could lead to higher interest rates on homes, rejection of student loans, judgement on credit for health needs, outdated products and services for LGBTQ individuals and families, and lack of acceptance and understanding among traditional institutions,” Meyers said.

In addition to serving the national LGBTQ community with banking services – including credit cards – Superbia will offer its members both life and healthcare insurance that takes into account the unique needs of LGBTQ Americans. This includes providing coverage regardless of relationship status, gender identity, or preventative medications. Superbia has pledged to donate 10% of all revenue earned each year from its financial products and services to the Superbia Foundation.

Pandemic-related complications have slowed the regulatory approval process for many nascent financial institutions – including Superbia. According to Investopedia, the credit union had hoped to open its doors in the summer of 2021. The company hopes to begin operations soon.

Queer Money

Queer Money is not a fintech. But when it comes to financial wellness resources for the LGBTQ community, the Queer Money podcast is an option that deserves more attention. Created by David Auten and John Schneider, who launched their website, The Debt Free Guys, in 2013, Queer Money bills itself as the #1 gay podcast focused on the financial needs of the LGBTQ community.

Recent episodes of Queer Money have looked into the challenges of being an angel investor, answers to questions about “lesbian money,” savings strategies for low-wage workers, and social security issues for same-sex couples.

Sharing their story on their webpage, Auten and Schneider note that at one point the married couple found themselves embodying “the gay cliché of living fabulous but being fabulously broke.” From this point, the two financial professionals decided to “walk the talk”, overhauling their finances and using their personal and professional experiences to help “queer people (and allies) live fabulously not fabulously broke” via a combination of credit card debt reduction, entrepreneurship, and better savings and investing.

Auten’s background includes years as a Business Systems Analyst as well as an institutional broker/project manager. A graduate of the University of Colorado, Denver, Auten is also the co-author (with John Schneider) of 4: The Four Principles of a Debt-Free Life and is a nationally recognized expert on queer and straight personal finance. Schneider has experience as a financial services compliance analyst, and spent more than a decade with Charles Schwab in a variety of capacities including Senior Manager for Advisor Services Strategic Integration.

Photo by Markus Spiske

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TrueLayer and Thunes Team Up for Open Banking

TrueLayer and Thunes Team Up for Open Banking
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Thunes, TransferTo
  • Open banking platform TrueLayer is partnering with cross-border payments company Thunes.
  • Thunes will integrate TrueLayer’s open banking technology into its platform, making open banking available as a payment method.
  • TrueLayer helps 100,000 merchants across the U.K., Europe, and Australia power open banking payments experiences that connect payments, data, and identity.

In the U.K., open banking is the rule, rather than the exception. So today’s partnership between open banking platform TrueLayer and cross-border payments company Thunes is targeting the right geography. Through today’s partnership, the two firms aim to streamline and improve the payment experience of consumers in the U.K. and Europe.

“Open banking payments are gaining momentum not only in the U.K. but also in the rest of Europe, and we really believe that this strong partnership with TrueLayer, a leader in the field, will help to move forward and make this new definition of smart payment a reality for all,” said Thunes Managing Director Christophe Bourbier.

Thunes will integrate TrueLayer’s open banking technology into its platform, making open banking available as a payment method for its 100,000 merchants. TrueLayer’s open banking payment technology bypasses traditional card networks and their associated fees, which helps merchants offer a faster and more cost-effective payments experience that reduces both fraud and chargebacks.

“Open banking is rapidly moving to the mainstream, as more merchants adopt account-to-account payments thanks to their ability to deliver significant cost savings, enhanced security, and speed of settlement when compared to other payment methods,” said TrueLayer Head of Payment Partnerships Mariko Beising. “Thunes has a track record of adopting and optimizing the latest payments options for its customers, so they can focus on running their business. Implementing open banking is the next logical step and we believe that together we can deliver significant value to merchants across Europe through a trusted partner.”

Thunes was founded in 2016 as TransferTo and rebranded to Thunes in 2019. The company offers a cross-border payments and collection network that supports 79 currencies, enables payments to 130 countries, and offers 300 payment acceptance methods. Among the company’s use cases are cross-border payments, business payments, virtual payments, and virtual account issuance. Headquartered in Singapore, Thunes also has offices in London, Paris, Shanghai, New York, Dubai, Nairobi, Arizona, and Barcelona.

TrueLayer helps businesses across the U.K., Europe, and Australia power open banking payments experiences that connect payments, data, and identity to help people spend, save, and transact online. The company was founded in 2016 and is connected to thousands of financial institutions across the U.K. and Europe. Last September, TrueLayer landed a $130 million investment that boosted the company’s total funding to $272 million.

Photo by Alex Andrews

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PwC and Microsoft Tap FintechOS for Digital Banking

PwC and Microsoft Tap FintechOS for Digital Banking
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, FintechOS, Microsoft, PwC
  • Financial services firm PwC and tech giant Microsoft are leveraging digital banking solutions provider FintechOS to create a digital banking solution.
  • The group aims to help banks adapt and modernize their operations to fit into the digital-first era.
  • “This will drive a massive improvement in time-to-value, and the extensibility of digital banking growth and expansion,” said PwC Partner Akhilesh Khera.

In the fintech industry, third party partnerships are king. So it’s not surprising to see the news that financial services firm PwC and tech giant Microsoft are tapping into the expertise of digital banking solutions provider FintechOS.

The trio announced their partnership, which will leverage FintechOS’ expertise, PwC’s digital banking prowess, and Microsoft’s Cloud for Financial Services technology to create a digital banking solution aimed at helping financial institutions adapt and modernize their operations to fit into the digital-first era.

For its part, FintechOS will be crucial in providing banking and investment, customer management, and integration and orchestration services. “We are delighted to be playing a key role in this ground-breaking initiative, as it demonstrates both the market-leading capability of our high-productivity fintech infrastructure and the strength of our relationship with PwC,” said FintechOS VP of Ecosystem Sales at EMEA Todi Pruteanu. “We are excited about the opportunity to work closely with and actively support PwC as this proposition revolutionizes banking across the globe.”

PwC Partner Akhilesh Khera said that the firm selected FintechOS for the company’s high-productivity infrastructure. “This will drive a massive improvement in time-to-value, and the extensibility of digital banking growth and expansion,” explained Khera.

U.K.-based FintechOS was founded in 2017 to help companies quickly launch and manage products and services across lending, savings, insurance, investment, and embedded finance. By helping financial services companies replace their core banking infrastructure operations, FintechOS also helps companies reduce costs, modernize operations, and deploy modern customer journeys that meet today’s standard expectations of great customer experience.

In March of this year, FintechOS launched a pair of accelerators to help financial institutions support their small business clients. Earlier this month, the company unveiled its spring release, which contained a digital retail mortgage and BNPL features. FintechOS demoed Sunglow, a banking super app at FinovateFall 2021. Teo Blidarus is co-founder and CEO.

Photo by Miriam Espacio

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Trustly to Acquire Ecospend

Trustly to Acquire Ecospend
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, Trustly
  • Sweden-based account-to-account payments specialist Trustly will acquire U.K.-based open banking payments platform Ecospend.
  • Trustly anticipates the deal will help accelerate its move into the U.K. market.
  • Financial terms of the deal were undisclosed.

Global payments fintech Trustly announced plans to acquire U.K.-based open banking payments platform Ecospend this week. Trustly anticipates that the deal, which will close for an undisclosed amount, will complement the company’s account-to-account (A2A) payments platform and accelerate its rollout in the U.K.

The U.K. is a key geographical market for Sweden-based Trustly. The company set a goal to be the market leader in the U.K., and today’s acquisition accelerates Trustly’s journey towards that target. “I am delighted to welcome Ecospend to Trustly,” said Trustly CEO Johan Tjärnberg. “This is a perfect strategic fit and I am convinced that it will enable us to deliver a market-leading product in the U.K., allowing us to capture opportunities and accelerate our current U.K. expansion.”

Ecospend was founded in 2017 and is now a regulated A2A payments provider for the U.K.’s Financial Conduct Authority (FCA). Leveraging this certification, the company seeks to power open banking payments and financial data services. In the past year, Ecospend has processed over $6.3 billion (£5 billion) in A2A payments to over two million consumers. The company connects with 80+ U.K. banks, making it a valuable asset to Trustly’s A2A payments service.

“We will continue to leverage our market-leading technology and bank connectivity in the U.K. and, together with Trustly, broaden our capabilities to stretch across Europe and further markets,” said Ecospend Founder Metin Erkman. “We are really excited to join the Trustly family.”

Trustly was founded in 2008 and offers a simple A2A payments platform that doesn’t require the user to sign up, enter their card or bank numbers, or provide any billing information. From a merchant perspective, Trustly offers a card-not-present payments experience that provides a secure way for consumers to transact using their online banking credentials. The A2A nature of the payments experience is superior to traditional card payments because it offers stronger user authentication, higher approval rates, and guarantees payments with no risk of chargebacks.

A FinovateEurope 2017 alum, Trustly works with more than 8,100 merchants, helping them connect with 525 million consumers and 6,300 banks across 30 countries.

Photo by Christina Morillo

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Plaid Teams Up with Truework to Launch Income Verification Solution

Plaid Teams Up with Truework to Launch Income Verification Solution
By David Penn Posted on
Categories: Alumni News, Daily news, Plaid
  • Plaid teamed up with Truework to launch a new income verification solution, Plaid Income.
  • The new offering will make it easier for loan applicants to share income and employment information with lenders.
  • The Truework partnership comes just days after Plaid introduced its Identity Verification and Monitoring solution, as well as its partnership with financial wellness company Current.

Income and employment verification company Truework has partnered with Plaid to help the firm launch its new Plaid Income product. Plaid Income will bring greater accuracy, security, and speed to the loan application process. Prospective borrowers will be able to share income and employment data digitally and instantly with their approved lenders. Plaid Income will provide faster approvals for loan applicants while giving lenders greater confidence that they are lending the right amounts, to the right people, at the most appropriate interest rate.

“We built Plaid Income to provide a more inclusive credit system for all,” Plaid Head of Revenue Paul Williamson explained. “Partners like Truework share our consumer-first vision to empower them with control of their own financial data. Combined with their digital approach to income verification, we’re excited that Plaid Payroll is now integrated into the Truework platforms.”

A Finovate alum since 2014, Plaid introduced itself to Finovate audiences as part of our developers conference, FinDEVr Silicon Valley. In the years since, the San Francisco, California-based fintech has grown into a major force in the democratization of financial services, partnering with more than 6,000 fintechs – from Venmo to SoFi – as well as many of the world’s largest banks. The company’s network reaches 12,000 financial institutions in the U.S., Canada, the U.K., and Europe.

Most recently, in addition to its partnership with Truework, Plaid introduced a new verification and compliance solution, Plaid Identity Verification and Monitor, that helps reduce fraud and boost conversion rates. Launched earlier this month, the new offering features a complete verification, AML, and KYC compliance solution that serves multiple use cases including account opening and funding, trading, and lending. Also this month, U.S.-based financial wellness platform Current announced Plaid as its first partner. Current offers a platform API that helps fintechs to build embedded financial solutions.

“Our new platform API gives open banking partners the capability to embed our core banking technology,” Current CTO Trevor Marshall said. “With Plaid, our members can access experiences that can help improve their financial lives with control and security.”

Photo by Pixabay

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Trendspotting: What’s Driving Fintech Innovation Today?

Trendspotting: What’s Driving Fintech Innovation Today?
By David Penn Posted on
Categories: David's column, FinovateSpring 2022

This year at FinovateSpring, we asked a handful of Finovate attendees, presenters, and demoing companies what ONE trend they think we should all be paying attention to in fintech over the next 12 months.

Will it be the return of cryptocurrencies or the ability to deliver better financial advice at scale? Embedded finance or the continued rise of personalization and niche banking? And what about macro-economic trends, and their impact on the ability of fintech startups to raise capital and fuel growth?

This is what they told us.

Be sure to check out the videos from our FinovateSpring demoing companies – including Best of Show winners Array, Horizn, Keep Financial, FinGoal, QuickFi, and Spave – coming soon to our Finovate video archives.

Photo by Pixabay

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National Australia Bank to Launch BNPL Tool

National Australia Bank to Launch BNPL Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • National Australia Bank is launching its own BNPL tool called NAB Now Pay Later.
  • The bank’s BNPL offering will not charge late fees, interest, or account fees.
  • NAB expects to have a leg up on third party tools because, as NAB Group Executive Personal Banking Rachel Slade explained, “We know their banking and credit history and we’re assessing them based on our existing banking relationship.”

National Australia Bank is making its way into the buy now, pay later (BNPL) game. The bank announced this week that its customers can pre-register to use its BNPL tool, which is called NAB Now Pay Later.

NAB’s BNPL offering will enable customers to split online and in-person purchases of up to $1,000 into four payments. The bank will not charge late fees, interest, or account fees for the service.

NAB Group Executive Personal Banking Rachel Slade described NAB Now Pay Later as “safer” than competing third-party tools. “These are already our customers,” she explained. “We know their banking and credit history and we’re assessing them based on our existing banking relationship.”

From the consumer perspective, one of the biggest benefits of using a BNPL tool from their own bank is that the credit decisioning process is instant. “In the time it takes for a customer to go from the fitting room to the register, we’ve assessed their application, undertaken a credit check and opened an account with a virtual card so they’re ready to purchase,” said Slade.

Customers can pre-register today for NAB Now Pay Later, which is expected to launch in July.

Photo by David Clode on Unsplash

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Yapily Helps Make BNPL Checkout Easy for Small Businesses

Yapily Helps Make BNPL Checkout Easy for Small Businesses
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Open banking expert Yapily and B2B BNPL player Two have paired up.
  • Norway-based Two will leverage Yapily data, eliminating the need for businesses to fill out forms when paying with BNPL.
  • “With Yapily and open banking, we can provide a safer, cheaper, and easier financial bridge for businesses that are ready to move forward,” said Two Head of Product Deane Barton.

Yapily, a fintech that seeks to help businesses enhance their offering by embedding open banking into their products and services, announced its newest plan to help small businesses succeed.

The U.K.-based company is joining forces with Norwegian BNPL player Two to fuel data for Two’s B2B BNPL tool. “We’re working with Two to ease the cash flow burden for SMEs by offering alternative ways to access credit with BNPL and open banking,” Yapily said in a blog post.

Small businesses making online purchases can use Two at checkout to pay 14 to 90 days after they make their purchase. To make the process easy on the business client, Two leverages Yapily data to retrieve the buyer’s account information, including their name and date of birth, to verify their identity and approve the purchase. Not only does it take place in real time, but the data integration also eliminates the need for businesses to fill out multiple forms.

“With Yapily and open banking, we can provide a safer, cheaper, and easier financial bridge for businesses that are ready to move forward,” said Two Head of Product Deane Barton. “The intersection between BNPL and open banking is an exciting place to be. Together, we are shaping the future of financial services as we know it.”

The small business BNPL technology serves as an alternative to a working capital loan for the business client. The tool also has the potential to benefit the merchant. According to Two, e-commerce platforms that offer Two as a payment method can see up to a 60% increase in average order value and a 20% rise in the percentage of site visitors that make a purchase.

Yapily has raised $18.4 million since it was founded in 2017. The company enables its clients to access data in 15 countries across Europe, and at more than 180 financial institutions. Stefano Vaccino is founder and CEO.

Through today’s partnership, Yapily’s open banking capabilities will initially be rolled out to Two customers across the U.K., with more European markets to follow. Two has raised $3 million since it was founded in 2020.

Photo by Garrhet Sampson on Unsplash

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4 Reasons to be Optimistic about Fintech Right Now

4 Reasons to be Optimistic about Fintech Right Now
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

We’ve seen some bad news in the tech sector lately. YCombinator is asking its portfolio founders to “plan for the worst” and prepare for a downturn and Klarna is laying off 10% of its employees. Headlines such as, “Tech’s High-Flying Startup Scene Gets a Crushing Reality Check” aren’t helping consumer or investor sentiment, either. It can be tough to remain optimistic.

The good news is that the fintech industry is resilient. So amid the recent onslaught of disheartening news, here are four reasons you can be optimistic about fintech right now.

DeFi is promising

Fintech’s future is bright, and one shining light is decentralized finance (DeFi). It’s hard to know the exact implications DeFi will have on banks, fintechs, and other traditional financial (TradFi) organizations.

However, it’s clear that decentralizing traditional operations such as money transfers and loans will make a more efficient financial system. What’s more, DeFi is poised to help the 1.7 billion unbanked individuals across the globe benefit from financial services they’ve previously never had access to.

The best innovations are born when times get tough

It’s true that necessity is the mother of invention. Whether it’s an economic downturn, a pandemic, or a crisis in a different form, difficult times have proven to motivate people to develop creative solutions. This can be seen in countless examples from the COVID Recession of 2020. After the COVID pandemic hit, businesses were forced to figure out a way to convert their offering or service into the digital channel. In fact, many fintech companies grew while firms in other sectors were forced to make major cuts.

With new crises come new issues, and new problems that businesses and consumers need help solving. A bear market or an economic downturn would be no different; the best innovations are yet to come.

Still room for improvement

Because the fintech industry is relatively nascent, many of the problems the industry set out to solve still exist. In a piece we published earlier this month titled, “Has Fintech Failed?” we took a look at all of the ways fintech is failing to help consumers and businesses. As a few examples, underbanked populations are still lacking quality financial solutions, there are no open banking mandates in the U.S., fraud is rampant, and digital identity is flawed. The good news is that this leaves a lot of room for improvement, and therefore a lot of room for new competitors.

Fintech is here for a reason

When all is said and done, fintech is made to help individuals and businesses better manage their finances and more easily access financial services. Because money is not an optional tool for survival in the modern economy, financial services companies have a unique ability to help others through a recession or slowdown in their own industry. This pervasiveness makes for endless opportunities for banks, fintechs, and DeFi alike.

The fintech industry is not just here to serve financial services organizations, but rather to help people in this world that need financial services the most. That’s why we’re here, and it’s certainly something to be optimistic about.

Photo by Marija Zaric on Unsplash

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