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Exploring the Next Evolution of BaaS with Brion Bonkowski of Tern

By David Penn Posted on January 13, 2022
Categories: CEO Interview, Speaker series

Headquartered in New York City, Tern is a fintech as a service innovator dedicated to enabling startups and established financial institutions alike to launch embedded banking and payments services products. The company, founded in 2015 by CEO Brion Bonkowski, offers a multi-currency, multi-language prepaid and stored-value platform with embedded AML, KYC, CIP, and fraud mitigation solutions.

We caught up with Brion to discuss a variety of critical topics in fintech – from the power of embedded finance and the future of neobanks, to the rise of BNPL and the challenge from Big Tech and Big Retail. We also discussed how Tern enables more companies to fulfill the promise of the banking as a service (BaaS) phenomenon.

What problem does Tern solve and who does it solve it for?

Brion Bonkowski: Tern is a fintech infrastructure company that exists to help virtually any company launch fintech products. Launching fintech products is hard and expensive. Anyone who has done it before knows the pains of contracting with banks, processors, and networks. Combined with long project timelines, these obstacles sadly prevent many programs from ever launching.
The emergence of Banking as a Service (BaaS) was the market’s initial reaction to try and serve this need. It was a way to package program management, processing, and banking under one roof. But BaaS had a narrow mandate aimed at serving startups for the most part when, in reality, the number and type of companies interested in launching financial services offerings is much broader.
Tern is the next evolution of BaaS in that we’re building tools that allow virtually any type of company to launch fintech products. This could include an early stage fintech startup, a legacy fintech, or a big global brand that wants to provide value-added financial services products to their existing customer bases. By offering no code (white labeled UX), low code (embeddable widgets), u code (API) options, we are striving to be every company’s answer to launching fintech products quickly and compliantly.

The rise of embedded finance has been one of the biggest trends in fintech of late. How do you see this trend evolving in 2022?

Bonkowski: We see a definite trend with more traditional enterprise players launching embedded finance applications, aiming to add stickiness to their service offering and additional lines of revenue to increase ARPU (average revenue per unit). The problem is, it is really hard to prototype, A/B test, and launch pilot programs to test a particular thesis in the market. We find marketing and product teams attempting to prototype and launch products quickly, however the problem is the complex compliance and regulatory oversight required. In response to this growing demand, technology providers will need to make their tools easier to deploy (with compliance baked in) to keep up with ambitious project timelines. Tern, for example, launched low code widgets to enable companies to launch core fintech services, such as onboarding, account issuance, and payouts, quickly and inexpensively.
Looking ahead, the real uptick in embedded finance will come when enterprise legacy companies, with established customer bases, realize the ROI of launching fintech services across a broad range of industries, and have a deployable vehicle to bring them to market. So, really, I would say we’re still at the beginning of this trend, and that’s exciting.

Another major trend in fintech is the proliferation of neobanks – especially those serving specific communities and consumer segments. What is driving this and how sustainable is it?

Bonkowski: New neobanks are popping up all over the place, and for good reason. Consumers have decreasing loyalty to traditional banks, so when a new online bank with messaging targeting a specific demographic appears, that demographic will typically at least test the waters, especially if motivated to do so by their peers. This is especially true if the account is free and offers services traditional banks do not, like earned wage access (EWA). Challenger banks like Chime started the wave of EWA programs and we find this function to be a big driver for neobanks to differentiate themselves and add new customers. Unfortunately, outside of EWA offerings, many of these neobanks have little to no differentiation. Many rely on celebrities and influencers to get the word out which is definitely not sustainable. Coupled with a bullish fintech venture market, we are sure to see some major casualties in the coming years.
Neobanks with specific functionality catering to their audience, however, still have a fighting chance at disruption. These differentiators vary, but even something like lowering the friction of moving funds into or out of accounts, or adding a utility like crypto or remittance to a portfolio, can be very powerful.

We’ve seen a number of different types of industries – from Big Tech to Big Retail – move into the banking services space. What kind of challenge does this represent for both “traditional” fintech providers as well as for banks?

Bonkowski: One distinct advantage that Big Tech and Big Retail have over banks and “traditional” fintechs is data. They know who their customers are, how they spend their time, and what they buy, which gives them a significant leg up in offering financial services and credit products. Traditional banks and processors see transaction data and know if you have paid your bills on time, but they haven’t a clue as to who their customers are and what makes them tick. Big data is playing an increasing role in establishing very specific cohorts of users. Within this construct, they can facilitate the orchestration of a variety of financial services, offered in different formats with cohort specific messaging, to see which one works.
The one saving grace traditional banks have is regulation and oversight, two things Big Tech and Big Retail want to stay as far away from as possible. They are already under the federal microscope, and the thought for some is that adding banking regulatory obligations could stifle growth and innovation. This has moved Big Tech and Big Retail to partner with banks, rather than compete against them…at least for now.

The Buy Now Pay Later e-commerce phenomenon seems very much in a boom phase. Is regulatory scrutiny inevitable and how might it change the way BNPL services are offered?

Bonkowski: BNPL feels like it’s the wild west of payments right now with little to no oversight. These services are, in fact, credit products and we feel they will eventually be treated as such by the CFPB. We expect new regulations and standards for things like fees, disclosures, payment due dates, penalties, etc. Our fear is these new regulations may stifle the BNPL form factor by adding steps to the process or forcing consumers to accept multiple onerous disclosures. This may increase shopping cart abandonment, the very thing BNPL is looking to obfuscate. With many products and programs, we feel the best and cleanest end use experience will prevail. BNPL providers need to remain agile and incorporate these new regulations as they come up with the least amount of end user friction possible.

This fall Tern announced a partnership with TransferMex. How did this collaboration come about and how does it help fulfill Tern’s mission?

Bonkowski: TransferMex is a great case study on the power of partnership. In 2020, Tern was approached to help an institutional Mexican labor supplier issue bank accounts for H2 Visa workers. The driver for the program was to service the employers by eliminating paper checks and, in turn, the exorbitant cost for employers to track down workers that have to leave unexpectedly to deliver their final paycheck. Looking to add value to not just the employer, but the workers, Tern suggested adding simple and inexpensive remittance capabilities to the program and TransferMex was born. The TransferMex team had limited technical resources or fintech experience so they chose to use Tern’s No Code deployment option, essentially outsourcing the entire program to Tern.
Today, the TransferMex program is live and is seeing dramatic increases in the number of workers and employers using the service. The TransferMex team does all of the marketing, onboarding, and customer support, while Tern hosts and manages all of the technology, applications, and fintech components. Tern sees growing demand for this model of issuing prepaid cards with remittance capabilities to existing brands, and will be launching two telecom companies with similar functionality in early 2022.

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iPhone Turns 15. Here are 5 Ways it Helped Reinvent Fintech

By Julie Muhn (@julieschicktanz) Posted on January 12, 2022
Categories: iPhone, List series, Thought Leadership

Apple’s iPhone celebrated its 15th birthday this week (if that doesn’t make you feel old, I don’t know what will). Since its launch, the iPhone has been through 33 different models and Apple’s market capitalization has risen from $174 billion to $3 trillion.

In addition to making Apple shareholders much better off, the iPhone is also responsible for reinventing an entire industry– fintech. While fintech did indeed exist before smartphones and app stores, it was quite basic. As an example, check out Jim Bruene’s 2006 post titled, SMS Banking: Will it Work in the United States?.

Without the invention of the iPhone, smartphones would likely be around today– Blackberry and Palm Pilot would have gotten us here eventually. However, they probably wouldn’t have advanced as quickly as Apple did, and therefore wouldn’t have upended so many industries so quickly. So in celebration of the iPhone’s 15th birthday, here’s a look at how the big idea behind the small, rectangular device reinvented fintech to become what we know today.

Always on

Most people carry their phone on their person (or at least within arm’s reach) at all times. According to a 2021 study of smartphone usage statistics, 79% of users have their phone with them at least 22 hours each day, 22% of users check their phone every few minutes, and 51% of users look at it a few times per hour. These devices (and the information that they carry) have essentially become an extension of ourselves.

When your customers have their device nearby for all but two hours of each day, it not only gives them access to interact with your company and brand, it also offers you access to interact with them. Compare this to pre-iPhone era. Customers were only interacting with you when they were physically in a branch location, opening a piece of direct mail, or using their PC. Today, when a nagging thought comes up about their budget or investment information, they no longer have to jot it down to remember to look it up later. Instead, they can simply open an app on their phone to get their answer.

Push notifications

According to the study referenced above, the average smartphone user has 63 interactions with their phone each day. Some of those interactions are thanks to the user receiving alerts or push notifications, which Apple launched in 2009.

When used properly, push notifications can be a powerful tool to prompt users to take important action. Others are useful for simply promoting brand awareness. With the advent of the iPhone and push notifications, reminding customers that you still exist became much easier.

From SMS to GUI

Simply put, the iPhone helped take banks’ and fintechs’ digital customer interactions outside of strictly texting and email. The graphical user interface behind phone’s screen brought a new world to the user’s fingertips. Users were no longer limited to checking their balance or making simple transfers. Mobile apps opened up capabilities to do anything they could do online and (in many cases) in person in a bank branch.

Independent developers increasing competition

When you think of the expertise and capital required to start a bank vs. the requirements to launch a fintech, there are gaping differences. Thanks to an increasingly large talent pool of developers, anyone with a viable fintech product or service has the ability to compete with traditional banks by launching their own app in the app store.

Increased competition from fintechs has been overall healthy for the financial services industry and has made end consumers better off. When customers are unable to find a product they like or even when they have been rejected by a traditional bank, fintechs have consistently proven to meet their needs.

Authentication

Apple launched Touch ID in 2013 and in 2014 it was made available for third party apps to authenticate users. More recently, the company launched Face ID in 2017 to facilitate authentication. While fingerprint and facial recognition technology pre-dates the iPhone, it didn’t come on a pocket-sized device that consumers carry around with them.

Having biometric authentication technology available to verify the identity of users each of the 63 times they open their phone each day has made every day tasks safer for banks, fintechs, and users.

Photo by Jonas Vandermeiren on Unsplash

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Checkout.com Earns $40 Billion Valuation with Series D Investment

By David Penn Posted on January 12, 2022
Categories: Daily news, Funding

A fundraising round of $1 billion has given Checkout.com a valuation of $40 billion, more than 20x the valuation the company earned upon its first fundraising three years ago. The investment takes Checkout.com’s total capital raised to $1.8 billion, and the company said that it plans to use the funds to support growth in the U.S. market, launch its marketplaces solution, and strengthen its position in Web3.

“At our core, we help enterprise merchants to navigate the complexity of moving money around the world, whether in fiat currency or bridging the gap to Web3,” Checkout.com founder and CEO Guillaume Pousaz said. “By combining an elegant technology stack with industry expertise and an ‘extra-mile’ approach to service over the past decade, we’ve built deep partnerships with some of the world’s most innovative companies.” Pousaz added that while he considered this week’s investment to be a “validation” of the firm’s work to date, “we’re still in ‘chapter zero’ of our journey.”

Investors in the Series D included Altimeter, Dragoneer, Franklin Templeton, GIC, Insight Partners, the Qatar Investment Authority, Tiger Global, the Oxford Endowment Fund and “another large west coast mutual fund manager.”

With customers ranging from Netflix and Pizza Hut to fintechs like Klarna, Revolut, and Coinbase, Checkout.com offers a full-stack online platform that makes payments easier for global businesses. Enterprise merchants that face significant challenges in moving money around the world have partnered with Checkout.com for its flexible, cloud-based payment platform that offers improved authorization rates, feature parity, and direct connection to local networks in key geographies and for all major alternative payment methods.

Looking forward, Checkout.com plans to launch a solution to service both marketplaces and payment facilitators later in 2022. The new offering will combine identity verification, split payments, and treasury-as-a-service functionality with Checkout.com’s Payouts solution, which helps companies send funds to both cards and bank accounts worldwide by way of a single integration. Checkout.com reports that both TikTok and MoneyGram have taken advantage of the service, with “billions of dollars in payout transactions” processed.

Headquartered in London and founded in 2012, Checkout.com spent 2021 opening new offices in six countries across four continents and making numerous major C-suite additions. These include a new Chief Financial Officer, a new Chief Technology Officer, and a new Chief Product Officer. The company announced an extension of its strategic partnership with JCB in September, and led a $110 million funding round for Saudi Arabian-based fintech Tamara in April.

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Tandem Bank Acquires Oplo

By Julie Muhn (@julieschicktanz) Posted on January 12, 2022
Categories: Daily news, Mergers & Acquisitions

Founded in 2015, Tandem Bank used to be among the ranks of U.K. challenger banks Monzo and Starling. But Tandem Bank has remained relatively quiet for the past year-and-a-half– seemingly sidelined from the digital banking race taking place across the globe.

That’s changing today, however. Tandem Bank announced it has acquired lending platform Oplo. Financial details about the deal were undisclosed.

“I think this is a really exciting business combination,” said Tandem Bank Group CEO Susie Aliker. “We have a shared and common purpose to create a greener and fairer banking proposition. We want to build on our digital and technology capabilities to really create a really exciting but also profitable challenger bank.”

https://www.youtube.com/watch?time_continue=1&v=rtfY2lYRqsE&feature=emb_logo

Oplo was founded in 2004 and has since lent over $1.2 billion (£900 million) to mainstream customers. The U.K.-based fintech offers car finance, personal loans, and secured loan products as alternatives to traditional bank loans. When it combines with Tandem, the digital bank will have $1.64 billion (£1.2 billion) in assets.

Tandem is very focused on the ESG initiative that has been sweeping the fintech industry; this includes digital banking players in particular. Tandem Bank currently holds $315 million (£230 million) in its Green Loans, a product that helps accountholders “save the planet whilst saving money.” Last year, the digital bank provided customers with loans for home improvements that contributed to over 12,000 tonnes of CO2 reductions.

The Green Loans product comes courtesy of Tandem Bank’s 2020 acquisition of Allium Money, an alternative lender that offers consumers financing to improve the energy efficiency of their homes.

“By joining forces, we will be able to offer a wider range of products and higher quality of service to more people than ever before,” Oplo said in a blog post announcing the change. “And together, as Tandem, we will build a fairer and greener bank for all.”

In a video, Aliker described the company’s recent shift to double-down on its ESG focus. “Our target market going forward will be what we call The New Mainstream.” We want to give them the choices so that they can also help contribute towards a fairer and greener future.”

Photo by Adolfo Félix on Unsplash

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Community Banking Network CBANC Unveils New B2B Fintech Marketplace

By David Penn Posted on January 11, 2022
Categories: Alumni News, cbanc Network, Credit Unions, Daily news

CBANC, the biggest verified professional network for U.S. commercial banking institutions – and the professionals that run and work for them – announced the launch of its new platform this week. The CBANC Marketplace will host data and information on 1,000 products from more than 450 companies – all designed to meet the unique needs of small banks and credit unions.

“Over the past 10 years, CBANC has been a place for all financial professionals to connect and discover the information they need to succeed,” CBANC CEO Tom Ferries said. “Today, the speed of technological innovation is outpacing awareness, and community banks and credit unions need a place to discover what’s available for them and feel confident in their decisions.”

The CBANC Marketplace gives companies the ability to have their solutions accessed by a verified audience of community banking and credit union professionals. Both the CBANC Community and Marketplace are free for all employees of U.S. financial institutions, and there is no cost for fintechs and other companies that want to add their product or solution. For more information, and to request inclusion in the CBANC Marketplace, visit the network’s vendor hub.

Headquartered in Austin, Texas, and founded in 2009, CBANC benefits from the collective wisdom of more than 8,600 financial institutions with a combined total of more than $22 trillion in assets. The CBANC Community consists of 65,000 verified financial professionals representing more than 80% of all financial institutions in the United States. A unique opportunity to connect and collaborate with peers in the industry who are innovating in a wide range of technologies from AI to the blockchain to cryptocurrencies, the CBANC Network earned a spot on the 2020 Inc 5000 list of the fastest growing private companies in the U.S. Ferries, who took over at CEO days before the Inc 5000 announcement, credited CBANC’s three-year revenue growth of more than 6.5x for helping the organization secure the listing.

“Our strong revenue growth is a testament to the value we deliver to our Members and Partners,” Ferries said. “Look for new and exciting product launches later this year to continue our mission of helping our Members preserve the diversity of the American banking system.”

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Brex Raises $300 Million to Expand Product Portfolio

By Julie Muhn (@julieschicktanz) Posted on January 11, 2022
Categories: Daily news, Funding

Credit card and cash management solutions company Brex closed a $300 million D-2 round today. The round, which values the company at $12.3 billion, was led by Greenoaks Capital and Technology Crossover Ventures (TCV).

Brex will use the fresh capital to expand its product portfolio to serve more of companies’ financial needs. The California-based fintech’s funding now totals $1.2 billion.

“Brex is a market disruptor and the opportunity to create economic opportunity for millions of people and businesses globally through innovation in financial products is incredibly exciting,” said Brex Chief Product Officer Karandeep Anand. “The opportunity ahead for Brex is expansive, and I’m grateful for the opportunity to create products that will help our customers grow their businesses.”

Brex was founded in 2017 to create a digital-first business banking solution. The company offers business bank accounts with credit cards that have built-in rewards, spend controls, and expense tracking. The accounts give businesses early access to their online revenue, billpay tools, and integration with popular accounting tools– all with zero fees. The company serves “tens of thousands of businesses” ranging from small private companies to large public brands, including Airbnb and Classpass.

“Brex has always moved fast. But as the company has scaled, they’ve managed to get even faster, accelerating their growth since our last investment,” said Greenoaks Founder and Managing Partner Neil Mehta. “Brex is building a full financial operating system that keeps getting more comprehensive, all of which will delight existing customers and attract new ones.”

In addition to the funding announcement, Brex is also highlighting a noteworthy personnel change. The company appointed Karandeep Anand as Chief Product Officer. Anand comes to Brex from Meta, where he led the business products group, which served more than 200 million businesses globally. Before his start at Meta, Anand spent 15 years at Microsoft leading the product management strategy for Microsoft’s Azure cloud and developer platform.

Photo by Hal Gatewood on Unsplash

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BeSmartee Pursues Opportunities in Commercial Lending with FlashSpread Acquisition

By David Penn Posted on January 11, 2022
Categories: Alumni News, Alumni profile, BeSmartee, Daily news, Mergers & Acquisitions

With its acquisition of financial analysis as a service company FlashSpread, digital mortgage platform BeSmartee’s ability to deliver a complete, digital lending experience just got that much more complete.

“We are excited to welcome FlashSpread and Ariel Trybuch to the BeSmartee family,” CEO and co-founder of BeSmartee Tim Nguyen said in a statement. “This is an acquisition that not only brings new clients, technologies, and talents to BeSmartee, but one that also sparks further innovation into all lending verticals, including mortgages, consumer, and commercial.”

Founded in 2017 and headquartered in Glendale, California, FlashSpread specializes in instant tax spreading for commercial lenders and fintechs. The company’s proprietary algorithms enable lenders to convert scanned tax returns into customized and comprehensive financial reports with the click of a button. The technology brings significant efficiencies to the commercial loan process – from origination to servicing – and empowers lenders to make accurate, data-driven credit decisions quickly.

Via its acquisition of FlashSpread, BeSmartee will be able to accelerate its growth strategy, prioritizing increased automation as it expands into the commercial lending space. FlashSpread is integrated with some of the largest loan origination systems in the commercial lending industry, with more than 100 financial institutions relying on its technology to automate manual processes. Post-acquisition, FlashSpread will continue independently to serve customers as a “BeSmartee Company” with FlashSpread founder and CEO Ariel Trybuch taking on the role of General Manager.

“This partnership will provide the resources necessary to support the hyper-growth FlashSpread is currently experiencing, as well as allow us to provide our customers with an even higher level of customer support, rapidly introduce new features and functionality, and expand our ever-growing library of supported document types,” Trybuch said. The company will continue growing its document library to support a broader range of financial statements, as well as launch a no-code reporting module to offer instant custom reports, and unveil an ongoing credit monitoring tool.

BeSmartee’s acquisition announcement comes just days after the company reported a partnership with Freddie Mac. The Huntington Beach-based fintech will integrate Freddie Mac’s automated underwriting system, Loan Product Advisor, improving workflows for lenders by automating risk assessment, and both asset and income data review. The integration will also improve lenders’ ability to make smart business decisions, leveraging actionable insights from Loan Product Advisor’s rich data visualization features.

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Revenue Got You Down? Accenture Offers Four Keys to Get Out of the Slump.

By Julie Muhn (@julieschicktanz) Posted on January 10, 2022
Categories: Report series

As we survey the damage from the pandemic and its multiple variants, technology services and consulting firm Accenture has some advice, “It is critical that every bank becomes a challenger.”

In a recent report, the firm uncovered that banking has moved from vulnerable to volatile on its Disruptability Index. Underlining this point, Accenture found that bank revenues declined in 2020, then rebounded last year. “Although COVID hasn’t been a solvency event for the banking industry, we have seen material profit compression that has reordered banks’ priorities,” the report states. “Leading institutions have witnessed double-digit net income declines of 7 percent in Asia-Pacific, 37 percent in North America, and 51 percent in Europe in 2020.”

This profit compression, along with an increased cost of risk and accelerated digital transformation, has resulted in what Accenture is calling a “neo-normal.” The more level playing field has resulted in a more crowded industry. Fortunately, Accenture leaves readers with four “imperatives for success” in this new, post-COVID arena.

Understand your market

While it has always been imperative for banks to understand their customer base, customers’ needs and wants have changed since the pandemic. For example, Global Banking Consumer Study found that when dealing with a bank, customers rank value as the number one priority. That’s up four slots from just two years ago when customers ranked it number five.

Also as a part of this, Accenture noted that banks must balance managing costs with customer acquisition. “Banks can no longer spend multiple years on complex integrations—they need to build a technical stack that can quickly onboard and migrate acquired portfolios and customers so the economic value of the acquisition can be realized swiftly,” the report said.

Future-proof your business

If this was important before the pandemic, it is even more so now. That’s because what we once thought was “the future” is here today. One of the best ways to do this may be cloud partnerships, Accenture explained, because the partnerships can accelerate digital transformation via partnerships.

Banks can’t take a blanket approach, however. There is no one-size-fits-all business model, especially for larger financial institutions. Instead, banks must adopt tailored models for each business sector in which they operate.

Focus on becoming digital

Accenture suggested that a mobile app is just a ticket to the game. Banks can’t rely on the app alone as their digital strategy. Instead of relying on their mobile app as their entire digital strategy, banks should shift their thinking outside of their budget. That is, digital tools shouldn’t be put in place just to decrease cost. Banks should also leverage digital to enhance differentiation, increase revenue, and boost customer acquisition.

Adopt technology

Simply put, “there is a high correlation between technology adoption and revenue growth.” That’s what Accenture found in two separate studies recently. Similar to the point above, banks shouldn’t just look to technology to decrease costs and increase efficiencies. Instead, in order to get ahead, banks need to consider how technology can enable growth, boost differentiation, and facilitate productive partnerships.

This is, of course, easier said than done, so Accenture suggests two jumping off points for banks. First, banks should improve their boards’ knowledge about technology. Second, banks need to align their IT strategy and their growth strategy.

These four tips are just highlights. There is a lot more to the full report, including graphs and many more stats. Check out Accenture’s brief and download the report.

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PayPal Plans to Launch its Own Stablecoin

By Julie Muhn (@julieschicktanz) Posted on January 10, 2022
Categories: Alumni News, Daily news, PayPal

PayPal has confirmed recent rumors regarding plans to launch its own stablecoin. According to Bloomberg, which broke the news last week, a developer found evidence of PayPal’s future stablecoin in the form of the below logo inside the fintech’s iPhone app.

SVP of Crypto and Digital Currencies at PayPal Jose Fernandez da Ponte later confirmed the suspicion. “We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators,” Fernandez da Ponte told Bloomberg.

Developer Steve Moser made the discovery by looking at hidden code inside the PayPal app. The code unveils work on PayPal Coin, a PayPal-specific stablecoin that would be backed by the U.S. dollar. After PayPal was made aware of the discovery, the company confirmed that the code was part of a recent internal hackathon and that details surrounding the project will likely change.

If the project comes to fruition, the stablecoin would be just one initiative among a host of other cryptocurrency efforts. In October of 2020 the company partnered with cryptocurrency company Paxos to allow PayPal users in the U.S. to buy, hold, and sell cryptocurrencies. And last March, PayPal launched Checkout with Crypto, a tool that enables users with cryptocurrency holdings to transact using crypto at the online point of sale.

When it comes to working on a stablecoin launch, PayPal is in good company. Meta (formerly Facebook) was developing its own stablecoin, Diem, until it experienced regulatory hurdles and pivoted to work with the Pax dollar instead. On top of that, Visa is looking to leverage a stablecoin to settle transactions.

In addition to its stablecoin ambitions, PayPal is also hoping to gain a reputation as the first super app in the U.S. The company revamped its mobile app last September and now offers a range of features including direct deposit, billpay management, rewards, and more. Founded in 1998, PayPal is now listed on the NASDAQ under the ticker PYPL. The company’s market capitalization currently sits at $213 billion.

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Biometric Authentication Innovator iProov Secures $70 Million in Funding

By David Penn Posted on January 10, 2022
Categories: Alumni News, Daily news, Funding, iProov

An investment of $70 million from Sumeru Equity Partners will enable online facial biometric authentication specialist iProov to expand its business in the United States, grow its worldwide partner network, and add more “top-quality staff” to its global team.

“This investment by one of America’s leading growth funds recognizes the preeminent position we have established,” iProov CEO and founder Andrew Bud said in a statement. “Our potential is enormous and we now have the resources to scale in the United States and worldwide. Our strong balance sheet will give our customers and partners confidence in our long-term ability to keep them and their customers secure.”

Updated valuation information was not immediately available. The company secured Series A funding in 2019, though the amount of the investment was not disclosed. In a statement, the company announced that it had tripled its revenues from 2020 to 2021, and processed more online verifications during a single 10-day period in 2021 than in the whole of 2020. The company added that it had completed more than one million verifications in a single day multiple times in 2021.

As part of the investment, Sumeru Managing Partner Kyle Ryland will join iProov’s Board of Directors. Ryland praised the company’s “combination of patented deep technology, exceptional customer references, and hugely capable team.”

A three-time Finovate Best of Show winner, iProov made its most recent Finovate appearance last spring at FinovateEurope 2021. At the event, iProov demonstrated Flexible Authentication which combines two of the company’s solutions – Genuine Presence Assurance and Liveness Assurance – to enable firms to choose the appropriate level of verification to be applied in a given situation.

Last month, iProov announced a partnership with high-speed passenger rail service Eurostar to test a new contactless fast-track service. The solution, SmartCheck, leverages iProov’s Genuine Presence Assurance technology to provide biometric face verification during the U.K. exit check to both streamline and better secure the travel experience. The pilot project was launched at London’s St. Pancras International station.

“This secure, convenient, and privacy-protecting technology will make life easier and safer for travelers around the world,” Bud said when the Eurostar collaboration was announced in December. “The days of rooting around in your bag for your passport or hoping that your phone battery doesn’t run out before you show your e-ticket at the gate are over. It’s effortless and convenient while also delivering the reassurance and security that travelers expect.”

Photo by Sourav Mishra

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InterSystems and Unqork on Increasing Speed to Productivity and Making the Most of Data

By Charlie Burgess Posted on January 10, 2022
Categories: Finovate Webinar, InterSystems, Interview, Webinars

“Banks are recognizing that there is a wealth of data and predicative analytics that can be used to curb future risks, but it’s all about how easily their teams can get access to it.”

Christian Lewis, Client Director of Financial Services, Unqork and Joe Lichtenberg, Global Head of Product and Industry Marketing, InterSystems, join Finovate Analyst David Penn to discuss how to cut down on latency in getting information and data to the right people, how to help organizations become more agile, and how to accomplish both goals while using fewer development resources than you might expect.

Watch the full discussion below and find out more about the work InterSystems and Unqork do >>

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Starling to Launch Software-as-a-Service Offering

By Julie Muhn (@julieschicktanz) Posted on January 7, 2022
Categories: Daily news

If you forecasted banking-as-a-service as one of the top trends in 2022, you can go ahead and put a check mark next to your prediction. That’s because U.K.-based digital bank Starling Bank announced today it is launching a software-as-a-service product, Starling as a Service.

Starling as a Service will help banks launch their own digital banks in months. “With SaaS (or Starling as a Service, as we like to call it) we will offer our partners the benefit of Starling’s advanced technology to use as their own,” Starling CEO Anne Boden announced in a blog post. “It will be their license, our technology.”

The move is part of a new phase for the digital bank, one that also includes an expansion of Starling’s lending offering. Going forward, Starling will now offer “a mix of strategic forward flow arrangements, organic lending across various asset classes, and a targeted M&A strategy.”

Today’s announcement also showcased some of the bank’s growth metrics. Starling has opened over 2.7 million accounts since its 2014 launch, 475,000 of which are SME accounts. The company now has $11.4 billion (£8.4 billion) in customer deposits, a figure that has risen almost $5 billion from $6.5 billion (£4.8 billion) at this same time last year. Additionally, the company has grown its lending from $2.6 billion (£1.9 billion) to $4.2 billion (£3.1 billion).

Along with the boost in these metrics, Starling also grew as a company in 2021. The bank acquired buy-to-let lender Fleet Mortgages last July, launched a new app for kids called Kite, committed to offset its own carbon emissions, (excluding lending and investments), and raised $437 million (£322 million) in March. Starling is now valued in excess of $1.5 billion (£1.1 billion).

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