This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Expense management firm Expensify has come out with its first product since making its debut on the public markets last year. The California-based company debuted a corporate payment card designed specifically for CPAs and accounting firms.
The Expensify CPA card comes with a high credit limit and doesn’t require a credit check or personal guarantee. The card continuously reconciles between Expensify and QuickBooks, Xero, Sage Intacct, and NetSuite. This real-time reconciliation offers administrators an up-to-date picture of company financials.
Expensify Founder and CEO David Barrett explained why the new CPA card was a timely offering from his company. “Expensify is already used by nearly half of the top 100 CPA firms in the U.S.,” Barrett said. “We used that expertise and experience to build the first card program that caters directly to the accounting profession and their clients.”
CPA-specific features of the new card include free American Institute of Certified Public Accountants membership, free CPA certification renewal, free CPE credit reimbursement, free access to three CPE credits with ExpensifyApproved! University, and free Expensify CPA Cards for both their firm and clients. Cardholders will also receive access to a team to help with high-level strategy, client onboarding, and training.
There is no information on the cost of the new card. However, cardholders receive a discount for signing up their clients. Firms that have 21 to 1,000 clients who are monthly active users receive anywhere from 15% to 30% off.
Expensify was founded in 2008 with a flagship receipt-scanning app and a simple motto, “Expense reports that don’t suck!” Since then, the company has launched a corporate payment card, offered a COVID-friendly virtual travel assistant, andexpanded into billpay. In November of last year, Expensify went public on the NASDAQ under the ticker EXFY. The company has a current market capitalization of $2.1 billion.
Earlier this week Routefusion, a company that helps financial services companies with global expansion, raised $10.5 million. The Seed round was co-led by Canvas Ventures and Silverton Partners. Haymaker Ventures, Initialized Capital, Sherwin Gandi, and Aldrin Clement also participated.
The new capital boosts Routefusion’s total funding to over $14 million. The company will use the funds to grow its team and to expand its operations in new markets, specifically in Latin America and Africa, two regions poised for growth. Adding the two new regions will extend Routefusion’s reach to more than 180 countries and more than 150 currencies.
Routefusion was founded in 2018 and helps small to mid-sized fintech companies expand their operations internationally in order to compete with traditional financial institutions and large financial services giants. The Texas-based company offers customers access to more than a dozen different banking and foreign exchange providers. Routefusion’s customers include Synapse, Jeeves, Novel, PaymentLabs, and Wyre.
“Gone are the days when go-to-market meant a domestic launch in one market. Today’s most ambitious fintech companies know that in order to win big, they must launch globally,” said Routefusion Cofounder and CEO Colton Seal. “We understand how to expand a company’s product and financial infrastructure, eliminating the obstacles associated with international payments and banking operations. With Routefusion, companies can embrace the global economy and scale across borders and oceans.”
As competition heats up in the digital alternative banking space, cross-border payments are only expected to grow. In fact, they are estimated to total $156 trillion by next year. Routefusion echoes this growth. The company has experienced a 200% growth in customers and a more than 5000% revenue growth in the past 11 months.
This week’s Finovate Global will take a look at some news from a pair of European alums that are expanding into new markets and collaborating with fellow fintechs.
First up is Finland’s ReceiptHero, which announced this week that it has launched operations in Switzerland. The launch is part of a multi-party collaboration with Noerdkantine – which refers to itself as a “charming and diverse event location with probably the most beautiful roof garden in Zurich – along with the business’ POS provider, TC POS, and its card payment provider Worldline. Noerdkantine is the first international merchant to take advantage of ReceiptHero’s services.
“This has been a fifteen-month process in the making,” ReceiptHero Country Manager, DACH, Mikko Rieger said. “We’re excited to have finally got the core platform now setup in Switzerland and we’re ready to onboard merchants.” Added Christian Mattle, Managing Director of Zucchetti Switzerland SA, the company behind TC POS: “We’re happy to be part of this milestone for ReceiptHero and we’re excited to support with rolling out the service towards our other Swiss merchants.”
Founded in 2019 and making its Finovate debut in Berlin, Germany at FinovateEurope a year later, ReceiptHero enables digital receipts from merchants to be delivered directly to customer banking and accounting apps. On a mission to “banish the paper receipt” and replace it with an alternative that adds value to purchases while putting a premium on privacy, ReceiptHero is building a digital ecosystem for receipts that benefits both business and individual consumers. Courtesy of ReceiptHero’s API platform, customers get the same data available on a paper receipt, including tax amounts, company information, and product level data. Individual customers benefit from having more enriched transaction data imported directly into their banking apps, which enhances the ability of features like budgeting to give users more accurate spending insights.
Importantly, the inclusion of international digital payment and transactional service company Worldline will make it easier for ReceiptHero to secure additional partnerships in Switzerland as well as throughout Europe.
“It’s been a long time coming, but it’s great that we now have ReceiptHero up and running,” Worldline Head of Partner Management Daniel Wirthlin said. “We look forward to being part of the sustainability journey and support our partner ReceiptHero to provide real and add-on value to merchants based on their existing terminal infrastructure in the DACH region.”
Next up is news from Latvian fintech Nordigen, which most recently appeared on the Finovate stage at FinovateEurope 2019 in London. The company leverages open banking and its account data analytics technology to help banks and lenders make faster, more accurate credit decisions. Offering account-based income verification, transaction categorization, and behavioral scoring solutions in 13 countries, Nordigen announced a pair of partnerships this week that underscore how its technology can benefit a variety of fintechs and financial services companies.
Early in the week, Nordigen announced that it was teaming up with SME lending platform Spotcap. The Lending-as-a-Service provider will use Nordigen’s technology – specifically the company’s access to financial transactions and enhanced credit reports – to make more thorough analysis of borrower finances en route to better credit decisioning.
“With Nordigen’s API, Spotcap can securely and quickly gather customer data to enhance existing products,” Spotcap SVP of Technology Viktor Kocherga said. “We share a joint purpose, to create convenient and comprehensive services using data, and Nordigen has the necessary tools to help us achieve this.”
Later in the week, Nordigen announced that it was also partnering with personal finance management app Everst. The two companies will collaborate to enable Everst to provide its users with a comprehensive financial overview that includes transactional data. Everst founder and CEO Felix Goosmann referred to Nordigen as “the perfect partner” in its goal of “challeng(ing) that status quo of personal finance management.” He added that the two companies “share a common goal of broader access to open banking.”
Available on both iOS and Android, Everst’s app includes a multi-currency dashboard, and the ability to connect multiple accounts from up to 2,000 banks and fintechs.
“Through the use of integrated PSD2-regulated APIs, Nordigen safely provides Everst with the necessary open banking data for their app,” Nordigen CEO and co-founder Rolands Mesters said. “Our account information services supply the application with crucial financial information needed for automation and an excellent overall user experience.”
Nordigen was founded in 2016, and is headquartered in Riga. In addition to its partnerships with Spotcap and Everst, the company also has teamed up this year with Denmark-based Buy Now Pay Later company Anyday and accounting solution provider CH Konsultatsioonid which serves customers in Estonia, Finland, and Lithuania. Nordigen has raised $4.2 million in funding from investors including Black Pearls VC, Inventure, Change Ventures, and Seedcamp.
FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!
Here is our look at fintech innovation around the world.
Leading Hong Kong-based virtual bank ZA Bank earned a Type 1 SFC license to deal in securities, the first financial institution of its kind in the territory to do so.
The U.S. Federal Reserve has issued a discussion paper today on central bank digital currencies (CBDCs). The paper is meant to serve as the first step in a public discussion about CBDCs between the Federal Reserve and stakeholders.
The documentation offers a basic background on what CBDCs are and how they may impact citizens. As a part of the discussion, the paper depicts potential benefits and risks of implementing a CBDC. Specifically, the Fed cites the following:
Benefits
Safely Meet Future Needs and Demands for Payment Services
Improvements to Cross-Border Payments
Support the Dollar’s International Role
Financial Inclusion
Extend Public Access to Safe Central Bank Money
Risks
Changes to Financial-Sector Market Structure
Safety and Stability of the Financial System
Efficacy of Monetary Policy Implementation
Privacy and Data Protection and the Prevention of Financial Crimes
Operational Resilience and Cybersecurity
Ultimately, the 35 page document leaves out a key issue when it comes to CBDCs: governmental control. A government-issued CBDC would allow the government to dictate how, where, and when currency holders spend their funds. As an example, consider unemployment money issued in the form of a CBDC. The government could restrict the funds to not work at businesses categorized as liquor stores or bars.
Restrictions such as these aren’t necessarily a bad thing. In some cases, giving the government control over government-issued funds makes a lot of sense. In fact, it is even common practice in programs such as WIC, which offers low income mothers access to healthy foods.
However, if there’s one thing Americans love, it’s freedom. And if citizens receive their paycheck in the form of a CBDC, it’s likely they won’t want the government to control their spending. When it comes to monitoring citizens’ spending of CBDCs, however, the Fed did note the risk of balancing privacy with the need to prevent financial crimes. Under the Potentialrisks section, the paper states, “Any CBDC would need to strike an appropriate balance between safeguarding consumer privacy rights and affording the transparency necessary to deter criminal activity.”
The purpose of the paper is to essentially open up the discussion of CBDCs with the American people. While the Fed makes it clear it may not necessarily proceed with issuing a CBDC, it proposes 22 questions to readers in an effort to gather comments from all stakeholders. If you’re interested, you have until May 20, 2022 to submit your thoughts.
While the concept of CBDCs is fairly new in the financial services world, the conversation around the new form of cryptocurrencies is being taken quite seriously. At the moment, 90 countries are currently exploring or launching their own CBDC. In fact, TechCrunch reported earlier this week that China’s digital Yuan wallet now has 260 million users.
Open finance network Plaid is snapping up identity verification and compliance platform Cognito in a deal valued around $250 million.
Plaid’s “next major step” as a company is to help developers build onboarding experiences. And because identity is a huge piece in the onboarding process, Cognito’s technology will be key in the launch of the new tool. “This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product – the first time sending money to a friend, or the first time trading a stock or cryptocurrency,” Plaid CEO Zach Perret said in a blog post.
Perret cited identity verification, account connection, and account funding as three parts of a complete onboarding experience. Currently, Plaid’s technology takes care of the latter two pieces but is missing identity verification technology. According to TechCrunch, Cognito’s technology will be available to Plaid’s 5,500 clients as an optional add-on. Plaid’s services range from a free option to a package that costs north of $500 per month.
Cognito’s technology verifies user identity by connecting their phone number with their traditional identity data such as name, date of birth, address, and social security number. The California-based company also helps businesses stay compliant by managing and automating their anti-money laundering and politically exposed person screening. Since it was founded in 2014, Cognito has verified 76 million users for 300 clients including Affirm, Brex, and Current.
Today’s news is another signal of expansion for Plaid, which partnered with Dwolla, Square, Checkout.com, Currencycloud, and Marqeta last October to move into account-to-account payments.
With $734 million in funding, Plaid helps 11,000+ FIs offer their customers access to third party financial services via a suite of APIs to connect consumers, financial institutions, and developers. Plaid also offers a suite of analytics products that provides further insights into transactions. The company was founded in 2013 and is headquartered in San Francisco, California.
Just when you might have thought that the momentum behind the Buy Now Pay Later phenomenon might be waning, banking software company Temenos announced today that it is launching its own BNPL offering.
Temenos brings its patented Explainable AI technology to the BNPL party with its Temenos BNPL. The company says that the new solution will give banks and fintechs new revenue opportunities, enable them to access new markets, and strengthen their relationships with both customers and merchants with its ethically-driven lending program.
“In an extremely competitive market, financial services providers need to evaluate new business models to drive revenue,” Temenos CEO Max Chuard explained. “As the strategic technology provider for over 3,000 banks worldwide, we are committed to empowering our clients to pioneer and adopt those new, profitable business models. Buy-Now-Pay-Later has shown the industry that we can come up with new solutions to old problems.”
Temenos BNPL brings transparency to the automated decision-making and credit offer-matching aspect of the Buy Now Pay Later process. Courtesy of embedded Explainable AI, the technology allows clients to pre-approve loan applications or offer variable installments in real-time, contingent on pre-determined criteria. The technology offers visibility into the credit decisioning and provides a recommended payment timetable during the application process so the borrower can be assured of being able to make the repayments as scheduled.
Temenos BNPL is core banking system agnostic – accessible via the Temenos Banking Cloud, which means that institutions and businesses can deploy the technology along with Temenos Transact or any other core banking system. In a statement, Temenos noted that one company – “a global payments provider” – went live with its own Temenos BNPL-based Buy Now Pay Later service and received 22 million loan applications in nine months. The product launch was reportedly the fastest and most successful in the company’s history. It was also especially popular with customers, 70% of whom are repeat users of the technology with 50% using the technology more than once within three months.
“(Buy Now Pay Later) has challenged the way we think about customer engagement, acquisition, and retention,” Chuard said. “We are very excited to launch this new solution to enable our clients to offer alternative financing that is fast, seamless, and scalable.”
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.
Courtesy of an investment from Thoma Bravo, personalization and customer-engagement solution provider for financial services companies Personetics has raised $85 million in growth funding. Updated valuation information was not disclosed.
Calling data-driven personalization and customer engagement “the battleground for financial institutions” worldwide, Personetics CEO and co-founder David Sosna said that banks and financial services providers are rightly moving toward a more proactive relationship with their customers. “Personetics provides financial institutions with the most comprehensive engagement platform on the market, enabling agility and differentiation with an agile delivery for quick business impact,” Sosna said.
Personetics’ technology boosts customer engagement by analyzing financial data in real-time, learning financial behaviors, anticipating needs, and then acting on the user’s behalf. The company’s enriched data, actionable insights, financial advice, and automated wellness solutions can be used by retail banks, small businesses, wealth management firms and others to increase digital customer engagement by as much as 35%, account and balance growth of 20%, and realize gains of 17% in the adoption of personalized recommendations and advice.
Making its Finovate debut in 2016 at FinovateEurope in London, Personetics raised more than $160 million in funding last year from investors including Viola Ventures, Lightspeed Ventures, Sequoia Capital, Nyca Partners, and Warburg Pincus. In the fall of 2021, the company announced a partnership with Europe-based financial services group KBC to increase customer engagement on the firm’s mobile app. Last spring, Personetics unveiled its patented, automated cash-flow based savings solution – Pay Yourself First – which has been integrated into U.S. Bank’s mobile app. Note that U.S. Bank won Best Customer Experience at the Finovate awards in 2019 for its mobile banking technology.
“Personetics’ PYF intelligent algorithms take the guesswork out of setting money aside for saving or investing and acts on behalf of customers,” Personetics President for Americas Jody Bhagat said. “It’s another example of how Personetics is helping financial institutions deliver hyper-personalized solutions for their customers, and bringing to reality its vision of Self-Driving Finance.”
Finovate is returning in-person to Europe this year – yet again, with only the most innovative in fintech demos. It’s been three years since FinovateEurope was last held in London, and we’re excited to be back. Experience the electricity for yourself!
A large (and growing) lineup of must-see companies have launched new ventures, partnerships, and products. FinovateEurope is where you can see all of them in one place.
A virtual kickoff on 15 March opens the demos (and the networking portal), and then the in-person portion of the event kicks off on 22 March. Both portions will give you the chance to see how these new solutions work, how they can benefit your organisation, and how they’ve been pushing the industry forward over the past 2 years.
Check the website here to see the demo roster as it continues to grow with seed-stage startups, fast-growing scale-ups and established public companies.
Finovate Research Analyst David Penn sat down with Simon Marchand, Chief Fraud Prevention Officer atNuance to talk about the current state of financial crime, what banks are particularly worried about, and the benefits of using voice as a key biometric identifier in the authentication and verification process.
“What I focus on is making sure that Nuance’s voice biometrics technology can be applied very specifically to track down fraudsters. One of the main challenges when you try to stop any kind of fraud is finding the human beings that are pretending to be someone else. What we do is identify the human beings (which) allows fraud teams to find the fraudsters themselves and prevent fraud much more easily and much more effectively. I’m here to make sure that Nuance’s expertise is applied in the best possible ways to stop and prevent any kind of identity crimes.”
On the top concerns for financial institutions when it comes to identity crime in 2022.
“The first is that we’re still going to have a lot of employees working from home … If you’re working from home, you’re not only easier to manipulate and socially engineer from a fraudster’s perspective, but also you’re alone, unsupervised, and have access to a lot of very sensitive information. Banks are very concerned about how they can protect their customers privacy and personal information as effectively in a work from home environment as they would do in an in-person environment.”
“The other big threat is that fraudsters are quite significantly shifting to account takeovers and subscription frauds – very identity-focused crimes. They have adapted very, very rapidly during the pandemic and they have seen that it’s very profitable to focus on those specific attack vectors. They are moving away, especially in the U.S., from those card-not-present kinds of fraud, card skimming, and all these things that we have been fighting for a couple of years, and it looks as if 2021 is on track to be the worst year in the past 20 years when it comes to the number of identity theft victims in the U.S. So fraudsters are moving toward (the new crimes) and we need to move quickly if (we) want to make sure that we’re protecting our customers.”
FinovateFall Best of Show winner SpyCloud has launched its latest solution to combat online fraud. The SpyCloud Identity Risk Engine, unveiled this week, analyzes billions of data recaptured from the dark web to help businesses and financial institutions make faster, more accurate, real-time fraud mitigation decisions.
What’s unique about SpyCloud’s approach to fighting fraud is the company’s focus on identifying credentials that have been exposed during data breaches and are actively being traded in the criminal underground. These exposed credentials are sold to fraudsters on the black market or used by the hackers themselves to steal confidential information, access secure systems, or commit fraud. Because many of these sources of stolen credentials cannot be readily accessed by automated software tools or web crawlers, SpyCloud uses a combination of technical innovation and human intelligence to find and recapture data from online criminal communities. The company also gives businesses and financial institutions access to the kind of authentication systems that will help defend them against cyberattacks that leverage stolen credentials such as account takeover (ATO), identity fraud, and new account fraud.
With the release of its SpyCloud Identity Risk Engine, SpyCloud gives businesses in financial and ecommerce services actionable, predictive fraud risk assessments based on breach data and stolen credentials that have been recaptured from the dark web. The technology combats difficult-to-detect challenges including data harvested by malware and the use of synthetic identities. SpyCloud Identity Risk Engine also gives businesses insight into which customers have the highest risk of account takeover due to risk factors such as exposed credentials or weak password protocols.
Businesses place the Identity Risk Engine at their most critical points of potential fraud (i.e., at account opening, login, transactions, etc.). From there, all that is required is an API query using an email address or phone number. SpyCloud then scans billions of recaptured data points to deliver a risk score that enables businesses to make more accurate fraud decisions. SpyCloud has recaptured more than 145 billion breached assets, more than 30 billion email addresses, and more than 25 billion total passwords. The company’s technology collects 50+ breach sources every week.
Winner of Built In Austin’s Best Places to Work for a second year in a row, SpyCloud was founded in 2016 and made its Finovate debut one year later. The company was featured in Fast Company’s inaugural Next Big Things in Tech roster last fall and, in October, SpyCloud announced a partnership with Houston, Texas-based identity and access management solution provider Identity Automation to help schools fight ransomware threats.
“Preventing ransomware is possible by negating the top attack vector: credentials that have been exposed in data breaches,” SpyCloud SVP of Business Development Cassio Mello explained. “This service gives schools early identification of compromised accounts, enabling them to take action quickly and prevent cyber attacks that leverage recently-breached identity data.”
SpyCloud has raised $58.5 million in funding from investors including Centana Growth Partners, Microsoft’s Venture Fund M12, March Capital, and Silverton Partners. Ted Ross is co-founder and CEO.
Remember when Andreessen Horowitz’s Angela Strange said that every company will be a fintech company? Though there has been much debate over the now-infamous catchphrase, there is news this week from automaker Ford Motor Company that further proves its truth. Ford announced it has signed a five-year partnership agreement with ecommerce technology company Stripe.
Ford aims to leverage Stripe to scale its ecommerce capabilities. “Stripe’s platform will help us deliver simpler, outstanding payment experiences in any channel customers choose and scale improvements faster,” said Ford CEO Marion Harris.
Under the deal, Stripe will process ecommerce payments for Ford’s personal and commercial customers. Beginning in the second half of this year, Stripe will power vehicle ordering, reservations, digital functions, and charging services. Stripe’s payment services will also be brought into Ford’s tech stack as the automaker develops more ecommerce offerings.
Specifically, Ford will implement Stripe Connect, a set of programmable APIs that helps businesses facilitate purchases between third-party buyers and sellers, to scale new ecommerce services. Ford will use Connect to facilitate payments between customers and their local Ford or Lincoln dealer. Among Stripe’s other customers for its Connect tool are Squarespace DocuSign, Mindbody, and Jobber.
The deal comes at a time when shoppers are more willing than ever to try digital experiences. “During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers,” explained Stripe CRO Mike Clayville. “Now, they expect to be able to buy anything and everything online. Ford is making ecommerce possible, too, and scaling that strategy with Stripe’s help.”
Founded in 2010, Stripe has millions of customers. Today’s partnership with Ford, however, marks one of the biggest deals the California-based fintech has landed. During a funding round last March, Stripe’s valuation was boosted to $95 million, ranking it among the most valuable fintech startups.
