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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Pendo’s product experience and digital adoption solutions help companies become product-led and deliver digital experiences users love.
Features
Pendo Adopt includes:
Behavioral analytics
In-app messaging and guides
Actionable feedback
Why it’s great
Pendo Adopt can be deployed across an entire portfolio of workplace software, from proprietary software built by internal teams to customized off-the-shelf solutions
Presenter
Clay Miner, VP of Sales & Value Engineering Miner has a strong history of developing, implementing, and selling world class enterprise software. LinkedIn
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Hawk:AI’s AI-based, real-time AML and fraud surveillance detects patterns that purely rule-based systems miss.
Features
AI is explainable and auditable
Allows users to detect and prevent financial crime faster
One interface for maximum efficiency
Why it’s great
Efficient, effective, and explainable AML & fraud detection, powered by AI.
Presenter
Steve Liú, General Manager, North America Liú is a veteran in the fraud and regtech industry, with years of experience directing teams in operations and global expansions across the U.S. and APAC. LinkedIn
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Basis Theory is a data tokenization platform used by organizations to quickly, securely, and compliantly use their sensitive data.
Features
Search encrypted data without decrypting
Build secure applications and workflows in minutes
PCI Level 1 compliant and SOC 2 certified environment
Why it’s great
Accelerate time-to-market and time-to-compliance.
Presenters
Colin Luce, CEO Luce brings over a decade of experience building and operating various fintech companies, including Yodlee, Klarna, and Figure. He is currently the co-founder and CEO of Basis Theory. LinkedIn
Brandon Weber, VP of Engineering Weber is an experienced engineer and leader with over 20 years experience in software development, cryptography, and network security at organizations ranging from the Air Force to Dwolla.
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
The Fundica funding search engine serves as a powerful business client acquisition tool for financial institutions by enabling them to truly democratize access to funding.
Features
Easily generate new business leads and retain clients with a complementary funding search engine
Gather firmographics and funding needs
Automatically promote diversity, equity, and inclusion
Why it’s great
Fundica makes financial intuitions a better and more complete funding destination by effortlessly extending their service offering at scale.
Presenter
Mike Lee, CEO & Co-Founder Lee is the CEO and Co-Founder of Fundica. He has held leadership roles in technology organizations, secured over $350 million in government funding, and holds Engineering, MBA, and CFA designations. LinkedIn
FinovateSpring is two weeks away! From May 18 through May 20, Finovate will bring its annual spring fintech conference to San Francisco, California for three days of live, IN PERSON, demos, keynotes, fireside chats, panel discussions, and debates.
To whet your appetite for our upcoming event, here are five reasons why we’re convinced that FinovateSpring 2022 is the must-attend fintech conference of the moment.
Live in San Francisco!
First and foremost: FinovateSpring 2022 will be live and in-person! For the first time since 2019, our annual spring fintech conference will feature live, in-person demos, in-person speakers, and – most importantly – live, in-person delegates and attendees. This year, we are expecting more than 1,100 senior attendees, more than 50% of whom are from financial institutions. Plus, representatives from each of the top 10 banks in the U.S. will be at the show.
Demo Newcomers!
Finovate events are a great opportunity to catch up with old friends and favorite companies. They are also an ideal time to meet new friends and new, innovative fintechs. This year, FinovateSpring will feature a number of new speakers, new formats like our Fintech Fight Club, Startup Booster Session, and Finovate Unicorn Power Panel. FinovateSpring 2022 also will host 30 companies making their Finovate debuts. Stay tuned for more on these Finovate newcomers!
Start-Up Booster!
Finovate events have helped shine a light on up-n-coming fintech startups with our Finovate Accelerator Showcases. This spring, we’re taking our commitment to supporting fintech startups to another level with our special Finovate Fintech Startup Booster program. This session will give fintech founders an opportunity to network with early stage fintech investors via pre-booked, one-to-one meetings. Make connections! Gain insights! And watch this space for more information on how to be a part of this unique opportunity for startups and the investors who fund them.
Special Sessions: Fintech Fight Club! Women in Fintech!
In addition to two days of live, in-person fintech demos and three days of insightful keynotes, fireside chats, discussions, and debates, FinovateSpring is hosting a handful of special sessions to help focus on critical topics in fintech. These sessions include our Fintech Fight Club and the return of our Women in Fintech session. Fintech Fight Club will feature a quartet of industry experts tackling some of the most challenging and controversial concepts in fintech. Our Women in Fintech session will focus on how to invest in women to pave the way for the next generation of leaders. Both sessions are 100% “can’t miss.”
Fintech’s Finest!
Saving the best for last, the most important reason to be a part of FinovateSpring is you: the financial services professional, the fintech enthusiast, the people who make our events such a rewarding opportunity for networking, exchanging ideas, and making key contacts. As much as we enjoyed the energy and enthusiasm that attendees expressed with our return to in-person events for FinovateEurope in London in March, we can’t wait to see what FinovateSpring in San Francisco has in store for us in just two weeks time.
Remember! Early bird savings for FinovateSpring ends this week! Visit our FinovateSpring hub by May 6th to pick up your ticket and take advantage of big savings! In-person and digital passes are available for both all-access and demo day only packages.
Robinhood unveiled its new stock lending feature, Stock Lending.
The new offering enables investors to lend shares and receive passive income from borrowers.
Stock Lending democratizes securities lending and provides Robinood with an additional revenue stream.
Stock brokerage app Robinhoodannounced the launch of Stock Lending today, a new feature that will allow users to lend out stocks in their portfolio to earn passive income from borrowers.
“Robinhood does the work of finding borrowers and managing transactions while customers can add a potential source of passive recurring income to their portfolio,” said Robinhood Chief Brokerage Officer Steve Quirk.
There are no minimum balance requirements in order to take advantage of Stock Lending, but users must have stocks paid in full. Fractional share stocks are not eligible. Once investors authorize Robinhood to lend the funds, Robinhood matches the user with a borrower. After their shares are lent out, users can track earnings, see their positions, and enable or disable Stock Lending at any time.
And while investors are still able to sell the shares they lent out at any point, there are a few potential downsides to Stock Lending. First, users’ loaned securities may not be protected under the Securities Investor Protection Act. Additionally, investors will receive cash payments instead of dividends on securities they loan out, which will likely have tax implications. Also notably, users may lose the right to vote with respect to their loaned securities.
The move democratizes access to fully paid securities lending. It also positions Robinhood to benefit from an additional revenue stream, as the company will pocket a portion of the fees from each loan.
Robinhood is in the process rolling out Stock Lending to its customer base. The company expects the feature to be available to all users by the end of this month.
LexisNexis announced its acquisition of behavioral biometrics innovator BehavioSec. Terms of the deal were not disclosed.
The acquisition adds to LexisNexis’ fraud and identity risk management capability following its 2018 acquisition of ThreatMetrix.
Sweden-based BehavioSec won Best of Show in its Finovate debut at FinovateSpring in 2012.
Yesterday we shared the news that Finovate newcomer – and recent Best of Show winner – Long Game had been acquired by Truist. Today, we see that the M&A train continues to chug down the tracks with word that another Finovate alum that also won Best of Show in its Finovate debut – has been acquired.
BehavioSec, which won top honors in its Finovate debut at FinovateSpring 2012, has agreed to be acquired by LexisNexis Risk Solutions, a part of RELX. Among the pioneers in advanced behavioral biometrics, Sweden-based BehavioSec leverages behavioral analysis to provide continuous authentication to establish identity and prevent fraud. The company’s technology gives firms a passive method and frictionless approach to identity management, analyzing the complex mobile signals from touchscreens and sensors to seamlessly prevent fraud before it strikes.
“Behavioral biometrics is a valuable component in fraud prevention strategies that layer defenses to tighten the net that stops fraudsters,” LexisNexis Business Services CEO Rick Trainor explained. Complimenting BehavioSec as a “forerunner” in the behavioral biometrics industry that “continues to evolve and innovate,” Trainor added that “our combined customer base will benefit significantly from a blended behavioral biometrics solution within ThreatMetrix that offers more defense for customers without adding friction across the customer journey.”
Terms of the acquisition have not been made available. BehavioSec CEO Dr. Neil Costigan said that he is looking forward to “discovering the next phase in the evolution for behavioral biometrics alongside a successful, innovative company looking to further evolve our advanced capabilities.”
BehavioSec’s acquisition by LexisNexis Risk Solutions comes after a year of major activity for the company. Last summer, BehavioSec unveiled a new compliant, hosted version and a new cloud-native, SaaS version of its platform. The offering made it easier for more organizations to take advantage of BehavioSec’s anti-fraud technology, satisfying compliance requirements and embracing frictionless, multi-factor authentication. In May, the company launched new authentication and fraud detection capabilities via its BehavioSense platform. The platform features accelerated profile training, doppelgänger detection, enhanced mobile fraud detection, and predictive modeling.
“Our newest features respond to customer feedback and, frankly, market demands,” VP of Products at BehavioSec Jordan Blake said when the solution was introduced. “These features add to our platform’s existing anti-fraud capabilities and are designed to solve the COVID-19 era challenge of accelerated digital transformation, online security, and privacy regulation compliance.”
This is a sponsored post by PwC, Gold sponsors of FinovateSpring 2022. Written by Vicki Huff, Global New Ventures & Innovation, TMT Vice Chair, PwC United States; Matthew Blumenfeld, Digital Assets Strategy Leader, PwC United States; and John Garvey, Global Financial Services Leader Principal, PwC United States.
If the boom and accompanying volatility in cryptocurrencies and NFTs leaves you uncertain, and if you’re not sure yet what to make of the metaverse, there’s a good way to separate hype from reality: follow the money.
Like the internet in the early 1990s, the crypto boom encompasses both transformative technologies and wild speculation. But some of the smartest money in the world — high tech venture capital — is flowing to some specific areas. These capital flows may hint at how the new, emerging digital economy will function.
Where the crypto unicorns are today
No boom is complete without turbulence along the way. Total cryptocurrency market capitalization reached almost $3 trillion by late 2021 — but market volatility at the start of 2022 wiped out nearly a third of this value. This drop, largely driven by macroeconomic and geopolitical concerns (rather than any problem with crypto technology or blockchain applications), may have given crypto speculators a rough ride. But it in no way interrupted the underlying innovation — and a crypto market gap of “just” $2 trillion is still about ten times larger than it was at the start of 2020.
The boom includes companies creating the foundation for Web 3.0 and the crypto economy. These investments began to scale in April 2021, when cryptocurrency exchange Coinbase held an initial public offering (IPO). It resulted in a valuation of over $80 billion on the first day of trading. Following this success, capital began to pour into startups which, like Coinbase, are building the foundations of a new digital economy that runs on cryptocurrencies. Crypto M&A rose to $55 billion in 2021 compared to $1.1 billion in 2020 — an increase of nearly 5000% — according to PwC’s Global Cryptocurrency M&A and Fundraising Report. Fundraising rose 645% to $34.3 billion from $5.6 billion according to the report.
The result is a new crop of unicorns (VC-backed startups valued at $1 billion or more.) Our analysis, based on PitchBook Data, identified 48 unicorns focused on cryptocurrencies, NFTs, and other foundations of a new, metaverse-based digital economy. Two of these unicorns (Coinbase in the U.S. and OneConnect in China) have since held IPOs, leaving 46.
The U.S. today is home to 24 of these 46 firms, but since cryptocurrency (and the capital that backs it) has no boundaries, companies can easily change locations. China’s crypto crackdown last year led many crypto startups to move or found themselves elsewhere. There have been concerns that potentially onerous regulations in the U.S. might also lead crypto companies here to consider relocating. But the recent Executive Order from the Biden Administration may have dispelled those fears for now.
What the crypto unicorns are building
Today, crypto and NFT unicorns are largely focused on the nuts and bolts of a new digital economy: buying and selling, digital infrastructure and analytics, and supporting the creator economy and other new digital services.
Many, for example, are offering financial services. Crypto exchanges help people and organizations buy and sell cryptocurrencies and tokens, store them (sometimes in interest paying accounts), and trade crypto options, futures and other derivatives. Crypto payments networks support more frictionless and trusted money transfers, while crypto financing startups help people and organizations use crypto as collateral for loans and other financial market operations.
Other unicorns are enabling other aspects of the new economy. They may offer hardware for cryptocurrency mining and operations, security and custody for digital assets, cross-blockchain transactions, support in building blockchain applications, blockchain-based data analytics, or blockchain-based smart contracts to help enforce contracts, automatically conduct transactions and more. Others help companies and consumers create, sell and invest in NFTs, purchase and develop digital real estate (such as digital storefronts), or invest in assets within one of the best places to reach Gen Z: gaming environments.
It’s not just crypto unicorns active here. Established financial services companies and fintech startups are also active in this rapidly accelerating effort: to build a trusted digital monetary system that is a critical building block of the metaverse.
What to do right now
Even if you have no plans to make big crypto investments, you owe it to your company’s future to keep track of this new world for financial services, data analytics, and virtual investments. Here are three steps every business leader can take today.
Start learning. You don’t have to be a crypto expert, but someone in your company should be — and you and other key decision makers should understand the basics and keep an eye on the underlying technologies and economic forces.
Get engaged. Cryptocurrency may feel chaotic at times, with volatility high and regulations still a work in progress. But given the speed at which investment is flowing and technology is maturing, if you wait until the dust settles, you may be left behind. Consider low-risk, low-cost investments (such as NFTs) to help build institutional familiarity.
Stay nimble. The speed of development means that you probably shouldn’t go all in on any one strategy — such as linking yourself too tightly with a single vendor, partner, or strategy. Continue to monitor developments in technology, user preferences, and the growth of related digital ecosystems.
With a cautious yet forward-looking approach, your company can avoid speculative bubbles and focus on the value that cryptocurrencies and related startups can provide.
3. “Coinbase IPO Exceeds All Expectations, Showing More Promise For Bitcoin,” Nasdaq.com, https://www.nasdaq.com/articles/coinbase-ipo-exceeds-all-expectations-showing-more-promise-for-bitcoin-2021-04-19, accessed 25 March 2022
4. PitchBook Data Inc. is the underlying data source for unicorn funding throughout this report. The analysis conducted by PwC has not been reviewed by PitchBook, and industry terminology used in this article may differ from PitchBook’s.
India’s Kaleidofin closed a $15 million investment round this week.
The funds bring the company’s total funding to almost $23 million.
Kaleidofin will use the capital to launch and scale its lending arm, KaleidoCredit.
India-based financial services provider Kaleidofinannounced it has raised an additional $5 million in funding, adding to the $10 million investment the company received in January of this year. The $15 million round brings Kaleidofin’s total funding to just shy of $23 million.
Participating in the round’s latest installment are Bill & Melinda Gates Foundation’s Strategic Investment Fund and angel investors. These investors join previous contributors Omidyar Network, Oikocredit International, and the Michael & Susan Dell Foundation.
“We are delighted to have investors known for their deep focus on informal sector customers and innovation promoting financial health, as partners, said Kaleidofin Co-founder and CEO Sucharita Mukherjee. “The partnership seeks to offer a broad range of financial services to underserved communities with a specific focus on low-income women customers at scale. The new funds will be used to further strengthen all our product lines, but will specifically help us launch and scale our KaleidoCredit business aimed at offer customized credit products for individuals and nano and micro SME customers.”
Founded in 2017, Kaleidofin serves 1.2 million customers across 14 states and 230 districts in semi urban and rural India.
Kaleidofin seeks to serve India’s population of 600 million underbanked consumers in what it calls “the informal economy.” The company’s offerings include KiScore, a credit health analysis tool; KaleidoCredit, its lending arm; and KaleidoPay, a payments tool; and KaleidoGoals, goal-based savings solutions. The savings solutions come in three tiers aimed to help a range of users either begin or start their savings habits.
Today’s news comes at a time of increased interest and activity in Indian fintech. Yesterday, Andreessen Horowitz announced his VC firms has earmarked $500 million to invest in Indian tech startups. India is an area ripe for fintech disruption thanks to its population’s high rate of technological adoption combined with the region’s large number of unbanked and underbanked consumers.
Truist has acquired mobile savings gamification app, Long Game.
Long Game uses strategies from the prize-linked savings and mobile gamification worlds to drive customer engagement and increase brand loyalty for banks.
Long Game won Best of Show in its Finovate debut last September at FinovateFall 2021 in New York.
“Truist’s commitment to help people build financial wellness is exactly what we are about at Long Game,” company co-founder and CEO Lindsay Holden said. “We’ve revolutionized bank engagement and are eager to apply ourselves to creating disruptive technologies that help Truist deliver a human touch in new ways.”
Long Game won Best of Show in its Finovate debut at FinovateFall in New York last year. The company offers a bank-branded mobile app that leverages the best practices from prize-linked savings and mobile gaming to help banks acquire new customers, boost customer engagement, and promote financial literacy – with a particular focus on Millennial and Gen Z customers.
Courtesy of the acquisition, Long Game’s team of engineers, designers, and business leaders will join Truist’s innovation team. Holden will lead a San Francisco, California-based crew of engineers, product managers, and designers as they develop new client-centric solutions.
“At Truist we are laser-focused on shaping the future of finance with innovative people and products – and democratizing entrepreneurial opportunity while we do it,” Vanessa Indriolo Vreeland of Truist Ventures said. “Long Game is a female-led business with a diverse team of incredibly talented innovators creating unique solutions to help people achieve financial confidence.”
The acquisition is designed to help Truist reach a younger demographic. Truist also sees Long Game’s technology as complementary to its workplace financial wellness program, Truist Momentum, that helps employees better manage their finances based on their goals and values. Headquartered in Charlotte, North Carolina, Truist was formed in 2019 as a result of the merger between BB&T and SunTrust Banks. Truist is a publicly traded company on the NYSE under the ticker symbol TFC. The firm has a market capitalization of $66 billion.
Learn more about Long Game! Check out our interview with company co-founder and CEO Lindsay Holden on the Finovate Podcast with Greg Palmer.
Fiserv is leveraging a partnership with The Clearing House to help its bank clients offer real time payments.
Banks that integrate into Fiserv’s NOW Gateway will benefit from real time payments in peer-to-peer payments, interbank account transfers, billpay, and more.
The partnership comes as the U.S. Federal Reserve announced pilot participants of its own real time payments system, FedNow.
Fintech solutions provider Fiserv is in the fintech headlines today for its move to help its bank clients provide real time payments to their end users. The Wisconsin-based company is partnering with The Clearing House (TCH), which is allowing Fiserv’s bank customers to access its Real Time Payments (RTP) network via Fiserv’s NOW Gateway.
Banks can integrate into the NOW Gateway, which leverages the RTP network, to offer their clients a range of real time payments services, including peer-to-peer payments with Zelle, payouts for gig economy work and insurance claims, interbank account transfers, and real time bill payments. Ultimately, the move will allow financial institutions to send and receive real time payments on behalf of their customers over the RTP network, which connects to over 60% of bank accounts in the U.S.
“To remain competitive, financial institutions must offer real-time payment capabilities. That’s why we are committed to making real-time implementation easier for any financial institution, from regional bank to community bank, to credit union,” said Fiserv’s President of Digital Payments and Data Aggregation Matt Wilcox. “Our work with The Clearing House to integrate the RTP network with our NOW Gateway is the latest advancement towards this goal.”
Founded in 1853, TCH clears and settles more than $2 trillion a day through wire, ACH, check image, and real-time payments. The company’s RTP network facilitates real time payments by immediately clearing and settling payments. In the first quarter of this year, the network cleared almost 37 million transactions totaling almost $16 billion.
Today’s news comes as the U.S. Federal Reserve’s real time payments tool, FedNow, began onboarding pilot participants. Fiserv is among the first 120 pilot organizations, a list which also includes Finastra, Green Dot, Q2, Square, Temenos, and Visa. The purpose of the pilot is to establish connectivity and perform technical and operational tasks that will lay the groundwork for full-scale, end-to-end testing later this year.
Fiserv most recently demoed at FinovateWest 2020 where it showcased its Virtual Banking Assistant, a tool that helps banks deliver intelligent, AI-driven conversational experiences. With nearly 10,000 financial institution clients, the company facilitates 12,000 transactions each second. Frank Bisignano is president and CEO.
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Keep is introducing a new form of employee compensation called Cash Vesting Plans that works like a 0% interest loan from the employer to the employee.
Features
Cash bonus given to employees and vests over time
0% interest loan given against bonus
Employee financial freedom while improving retention and hiring
Why it’s great
Keep is aligning employer and employee incentives and disrupting the way compensation works.
Presenter
Rob Frohwein, CEO Frohwein was the Co-Founder and CEO of Kabbage, a global fintech acquired by American Express. With Keep Financial, Frohwein is now disrupting how compensation works. LinkedIn
