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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Data Tools and Technologies is the theme of this month’s FinovateFocus event, which takes place less than a week from today on June 30. This two-hour, targeted networking and collaboration experience leverages smart algorithms to help attendees find like minds and make the best matches. In between networking sessions, FinovateFocus will feature short presentations on harnessing the power of data from fintech analysts, business leaders, and industry experts.
Book your ticket at our FinovateFocus hub today. Free registration for eligible director/head/SVP/C-level professionals from financial institutions is available. Visit our FinovateFocus hub for more information.
Here’s a look at what FinovateFocus has in store for next week’s presentations:
Transforming Relationship Managers into Trusted Advisors with Yamini Bhat, CEO and Co-Founder of Vymo.
Six Steps to Accelerate Your Progress on the Road to AI with Steven Ramirez, CEO, Beyond the Arc
Balancing Humans and Machines to Unlock Real-Time Finance Insights with Snehal Shinde, Chief Product Officer and Co-Founder of Zeni Inc.
After the networking sessions and presentations, FinovateFocus will feature a set of fintech roundtables led by our experts. Themes and hosts for the June FinovateFocus roundtables next week are:
Maximizing sales effectiveness: The art of working with “small data” with Yamini Bhat, CEO and Co-Founder of Vymo
The power of data to enhance your services – from Open Banking through Open Finance to Open Data with Dr. Louise Beaumont, Chair of the Open Finance & Payments Working Group of TechUK
Strategies for developing and deploying AI more quickly with Steven Ramirez, CEO of Beyond the Arc
Leveraging data to provide a better borrowing experience for businesses with Sean Hunter, CIO of OakNorth
SmartAsset, a fintech that helps individuals connect with qualified financial advisors and improve their overall financial health, announced a major fundraising this week. The company secured a $110 million investment in a Series D round led by TTV Capital that takes SmartAsset’s valuation to more than $1 billion.
“Our mission is to help people get better financial advice,” SmartAsset founder and CEO Michael Carvin said. “With this additional capital we are going to make further investments in building the web’s best personal finance resource and enhancing our ability to connect consumers to financial advisors across the U.S.” Specifically, SmartAsset noted in its funding announcement that it will invest in new product offerings, technology infrastructure, and data partnerships. The company also pointed to the growth it has experienced since its last major funding in 2018 – growing revenues by 10x and nearing $100 million in annual recurring revenue – to support its goal of “aggressively” adding to its workforce. With 202 full-time employees currently on board, SmartAsset is seeking to expand its workforce by more than 75% this year.
“SmartAsset is quickly expanding its lead in one of the largest markets in the U.S. by providing an incredibly valuable resource for both consumers and financial advisors alike,” TTV Capital Partner Mark Johnson said. “The company helps millions of people make better financial decisions while simultaneously enabling advisors to grow their business.”
Also participating in the round were Javelin Venture Partners, Contour, Citi Ventures, New York Life Ventures, North Bridge Venture Partners, and CMFG Ventures.
More than 100 million consumers access SmartAsset’s personal finance content, tools, and other resources each month. Named one of America’s Best Startup Employers in 2020 by Forbes, the company announced recently that LPL Financial had selected SmartAsset for its Vendor Affinity Program, giving 18,000+ independent financial advisors access to SmartAsset’s SmartAdvisor platform.
“SmartAsset gives (advisors) a new way to connect with investors across the country digitally, while also freeing up time to spend with their existing clientele,” Rob Pettman, LPL Financial EVP for Wealth Management Solutions, said. “It also provides advisors more choice in solutions they can leverage to grow their business.”
SmartAsset began the year by announcing Firoze Lafeer as its new Chief Technology Officer. The company made another addition to its C-suite in April when it hired James Kennedy as its Chief Compliance Officer and Director of Legal. SmartAsset made its Finovate debut in 2014 at FinovateSpring.
FinovateAsia Digital is in the books! A big thank you to our sponsors – DreamQuark, InterSystems, and CleverTap – our demoing companies – Amber, Crayon Data, Dreams, FinBit.io, QuickFi, and Strands – our speakers and, of course, our attendees. Your innovations and insights helped make our second, all-digital FinovateAsia conference a great success.
What did we learn over the two days of our Asia-focused fintech event? Everyone’s experience is different. But here are four things we heard and saw this week at FinovateAsia that we will be thinking about in the days and weeks to come.
Regulators who get it
It may not be any surprise that entrepreneurs and companies tend to thrive in regions where regulators and governments are constructively engaged in their success. But it is a point worth underscoring. When looking at those places in the APAC region where fintech is emergent – countries like Indonesia and Vietnam – often a progressively-minded regulatory authority or a determined government or government agency is involved. This engagement may be in the form of legislation or licensing that makes it easier for individuals to launch businesses or forge cross-industry partnerships. Constructive engagement can also take the form of creating the necessary infrastructure that companies and entrepreneurs need to create and test their technologies, deploy their solutions, and grow their businesses.
Keep an eye on the southeast
Given the high degree of fintech innovation in China, Hong Kong, Japan, South Korea, and Singapore, it is understandable that companies and entrepreneurs in these areas are receiving the lion’s share of the attention. But, as this year’s FinovateAsia reminded us, some of the countries that are only a few steps behind the leaders in terms of economic development are nonetheless the scene of major demographic and social trends. These forces – such as a digitally-oriented Millennial generation entering family formation years and an even more tech-savvy Gen Z right behind them – are also driving innovation in financial technology. Where to look? We’ve got our eyes on Vietnam, the Philippines, and Indonesia.
India is Asia
In the same way that we should keep southeast Asia in mind when thinking about fintech innovation in the APAC region, it is also worthwhile to remember India’s role in the overall Asian fintech ecosystem. India, which shares a border with China and the Bay of Bengal with Myanmar, Bangladesh, Malaysia, and Thailand, is a major fintech player in its own right, with both Indian companies and Indian-born entrepreneurs bringing new innovations to market around the world. The impressive number of companies from India that have demoed their technologies at FinovateAsia over the years – to which we add FinBit.io from this year’s event – is a reminder of India’s importance to the Asian fintech scene writ large.
Everyone wants to do business in Asia
It has been a cliche for decades that every company would love to do business in the rapidly growing markets of Asia. But the COVID pandemic may have been the biggest challenge to this trend since the Great Financial Crisis. Hopefully, the arrival of both COVID vaccines and a new, more globally oriented administration in the U.S. will bring a resumption of the trend toward greater international economic activity, partnership, and integration that existed before the once-in-a-generation pandemic.
The following is a guest post from Mohammed Kafil, Senior Product Manager, Kissflow.
The banking and financial services industry is severely affected by the global financial crises. They are in a state of flux due to regulatory confinements and the market’s increasing demands. For the past few years, the banking and financial services sector has been under intense pressure to meet market expectations while complying with strict regulations. This pressure is expected to increase in the foreseeable future. Banks and financial institutions must adopt new strategies to sustain and compete in this environment. Automation is an inevitable change that banks and financial institutions must adapt to sustain.
Leading banks and financial institutions are growing sustainably even in this environment by reducing costs, managing risk, and achieving transparency through procurement automation. Read on to understand why procurement automation is necessary for banks and financial institutions.
The Need for Procurement Automation
Procurement is the process of sourcing or buying goods or services for a business. Procurement automation is the process of automating the periodic steps involved in the procurement process. It automates significant procurement stages such as digital purchase and requisition forms, routing to suppliers and approvers, record-keeping of purchases, and the labor-intensive tasks of procurement, saving valuable time for the procurement team.
Benefits of procurement automation in banking and financial services
Improved visibility
Since the financial crisis, the banking industry has been scrutinized more closely by the public. The corporate spending habits of banks have piqued the curiosity of the media. As a result, the need for transparency, traceability, and compliance in a bank’s procurement operations has never been more critical. Increased regulatory pressure from governments and administrative agencies has also prompted the sector to adapt. Many banks are now taking concrete steps to better integrate risk management, compliance, and purchasing ethics into their culture.
Using procurement systems that support this process is the most effective way to assure visibility and compliance in purchasing activities. Banks can limit the approval levels of purchase managers by implementing end-to-end procurement technology solutions, ensuring that spend commitments closely reflect their procurement strategy. From managing approvals to reporting and spend tracking, procurement automation solves all these challenges and acts as a single source of truth to the organization.
Reduced costs
Banks are primarily service-based corporations. The great majority of their spend (approximately 40%) goes to management consultants and temporary workers in the professional services category. The next two largest spend areas, information technology and facilities management, each contribute to nearly 20% of the overall spending. For a service-based industry like banking, spending on services has historically been more difficult to assess, comprehend, and manage than spending on products. Leading banks, on the other hand, are successfully tackling these issues by automating their procurement processes.
Through automation, buyers can acquire a granular grasp of exactly what they are getting and what degree of service they can expect from the purchase by producing more detailed, automated rate cards. Further, the cost spent on employee expenditures can be significantly saved, as it accounts for 64 percent of a bank’s total costs, according to the banking sector spend report.
Risk mitigation & enhanced supplier collaboration
Implementing the appropriate technologies is critical not just for centralizing procurement policies and processes, but also for risk management. Due to the necessity to assure regulatory compliance, supplier performance, and risk mitigation have become significantly more important. Because of the high level of regulation in the financial services industry, procurement is under pressure to reduce risk from executive teams and other business stakeholders, who are more involved in supplier management than in other industries.
Even for companies with fully dedicated risk-management teams, gaining insight and control over supplier and third-party risk can be difficult. Financial services firms can use procurement technology to gain visibility into supplier operations and risk, allowing them to develop a complete picture of what’s going on in the supply chain. These technologies have collaborative data management features that allow internal stakeholders to gather and centralize supplier data from around the organization and share insights with senior management.
It also gives vendors access to a platform where they may post and update data. This contains certification information, financial disclosures, remittance and contract details, products, services, and other data required for risk factor calculations. With all of this data in one location, financial services companies can track and manage risk more effectively throughout the supply chain.
Banks and the financial services industry benefit greatly from procurement automation. Despite an increasingly turbulent and competitive sector, it guarantees that organizations remain competitive by managing compliance, addressing risk, and maximizing profit.
Mohammed Kafil is a certified procurement consultant who has been coaching companies to establish resilient digital procurement operating models for over a decade now. With Kissflow Procurement Cloud, a flexible procurement software that streamlines end-to-end procure-to-pay, and also eventually the vendor management process, Kafil helps medium and large enterprises with their digital transformation projects.
Another day, another big bank joins the Akoya Data Access Network to bring greater financial data aggregation to banking customers.
“The addition of Wells Fargo to the Akoya Data Access Network is yet another signal marking the industry’s shift toward safer and more secure API-based data aggregation, especially as new fintechs offer consumers a wide range of innovative services,” Akoya CEO Stuart Rubinstein said.
Wells Fargo’s move means that fintechs and data aggregators will be able to request API-based access to Wells Fargo customer data for mutual customers through the Akoya Data Access Network. The Network was spun off from Fidelity Investments in February 2020, and has since secured support from a dozen financial institutions, including Wells Fargo. Akoya implements Financial Data Exchange API specifications, which enable bank customers to provide third-party financial apps with access to their financial data without having to share their login credentials. Akoya’s API-based approach compares favorably to screen-scraping or “credential-based data aggregation,” especially in terms of data access reliability and security.
Bank of America, Chase, Fidelity, and U.S. Bank already have joined the Akoya Data Access Network. This means that, according to Rubinstein, “nearly half of all U.S. retail banking accounts (are) available through our authorized API connections.”
Wells Fargo will make its data available on the network later this year, giving customers time to authorize Akoya-connected fintech apps and service to access their Wells Fargo account data. The bank said it will maintain its direct API connections with third-party fintech partners who have signed data exchange agreements with the company.
“We believe that using APIs as a means of data transfer is a model the industry can use to create more reliable and more secure data sharing,” Ben Soccorsy, SVP of Wells Fargo’s Strategy, Digital and Innovation group, said. “As we continue to move toward what we see as a more secure, transparent and convenient method of data exchange, our agreement with Akoya offers another implementation option for connecting with fintechs.”
With $1.9 trillion in assets, Wells Fargo serves one in three households in the U.S., and more than 10% of all middle market companies and small businesses in the U.S. The company is ranked #30 on Fortune’s 2020 roster of America’s largest corporations.
A pair of Finovate alums have announced plans to “tie the knot” this week. Intelligent Identity solution provider Ping Identity has agreed to acquire fraud and bot detection and mitigation specialist SecuredTouch. Terms of the transaction were not immediately available.
By leveraging a variety of enabling technologies – including machine learning, AI, behavioral biometrics, and deep learning – SecuredTouch’s technology empowers fraud and risk teams to identify suspicious and potentially malicious behavior across all digital entities. The acquisition will integrate SecuredTouch with Ping Identity’s PingOne Cloud Platform, giving business customers the ability to better understand and prevent malicious activity. Customers will have the option of using SecuredTouch as a standalone solution or as part of the PingOne platform.
Ping Identity founder and CEO Andre Durand said that the acquisition “accelerates” the company’s mission to provide cloud-based identity and anti-fraud solutions to businesses to help them fight a wide range of cyberthreats ranging from emulators to account takeover.
“Identity isn’t just about knowing who your customers are, it’s about knowing when someone is pretending to be a customer,” Durand explained. “As companies undergo massive digital transformation initiatives, the need for seamless, frictionless, and secure identity solutions to confidently understand both those situations is imperative.”
Ping Identity made its Finovate debut at our first European fintech conference in 2012. In the years since, the Denver, Colorado-based company has become the identity management solution provider of choice for 60% of the Fortune 100 and forged partnerships with technology companies like Microsoft and Amazon. Most recently, Ping Identity collaborated with ProofID to enhance identity security for Tesco Bank, the banking division of Tesco, the largest supermarket retail chain in the U.K.
Headquartered in Ramat Gan, Israel, SecuredTouch demonstrated its behavioral biometrics technology at FinovateFall 2018. The company’s solution analyzes more than 100 different behavioral behaviors – from scroll velocity to touch pressure – to create a unique user profile that benefits from continuous verification. Winner of Best Product at the Loyalty Security Association Lion’s Den event this spring, SecuredTouch earned a patent for its continuous use authentication in 2019.
“This is a defining moment for our industry as identity security and fraud come together,” SecuredTouch CEO Alasdair Rambaud said of this week’s acquisition news. “Ping Identity’s enterprise proven and robust platform provides the perfect foundation for SecuredTouch’s advanced fraud detection capabilities.”
While cryptocurrencies and IPOs often grab the biggest headlines in fintech, much of the critical work of forging partnerships and innovating collaboratively between fintechs and financial institutions often goes, if not unnoticed, then at least a little underrecognized and underappreciated.
With this in mind, we’re starting off each week with a reminder that, when it comes to getting technology from idea to implementation, partnerships and collaborations are often the primary vehicle to getting it done. No man – or woman – is an island. And the same is true for any technology company or financial institution interested in making a meaningful impact in the lives of their customers and members.
Here’s a look at some of the more recent partnerships and collaborations between banks, credit unions, fintechs, and other players in the financial services space. Boldface indicates the company has demoed its technology at a Finovate and/or FinDEVr conference.
Cloud payments and financial messaging specialist Volante Technologies announced an instant payments partnership with European payment services company SIA.
The Finovate Fintech Halftime Review is back! Starting Tuesday afternoon, June 22nd, at 1pm Eastern and running through Thursday morning, June 24th, at 10am Eastern, our midyear look at the most critical themes in fintech will help you stay on top of the biggest trends shaping our industry today.
Featuring both live discussions and on-demand presentations on topics ranging from customer experience to machine learning, the Finovate Fintech Halftime Review is a great way to tap into the insights of some of fintech’s most innovative companies, entrepreneurs, and institutions.
Everyone who registers for the Finovate Fintech Halftime Review will get access to the Halftime Review eMagazine at the end of the week, featuring key session recordings from FinovateEurope and FinovateSpring. Registrants will also get an exclusive discount to FinovateFall in New York in September.
Here’s a look at the week’s Halftime Review agenda.
Fintechs and the Era of Radical Inclusivity: Leveling the Playing Field Through User Experience
Fintechs across sectors are ushering in a new era of consumer inclusivity. These apps and platforms have offered sweeping access to financial products, investment opportunities, asset classes, and goods and services that were once out of reach for many. Join CleverTap and a panel of high-growth fintech leaders as they help make sense of the revolution that’s underway. Tuesday, June 22 at 1pm Eastern
A Practical Path to Machine Learning Success for Financial Services
Today, most machine learning projects fail to make it to production. Many that do, fail to deliver ongoing value. Whether you are looking to extend the productivity of your ML team or just getting started with ML, join this session, as Finovate and InterSystems outline a pragmatic approach. Wednesday, June 23 at 1pm Eastern
The “New Normal” of Working in Finance: Getting to Grips with the Opportunities, Challenges, and Risks
Discuss the changing nature of work in financial services and why today’s financial institutions need to wake up to the new opportunity to enable broader remote work among their employees and contractors. Thursday, June 24 at 11am Eastern.
The “New” Frontier – Find Innovation, Adaptation & Growth in America’s Heartland
Hear stories of innovation, adaptation, and growth from executives in the Midwest and how their nontraditional location choice became one of their largest advantages. Whether you are a part of a large corporation or a startup founder, this session will provide information for fintech and insurtech leaders about the resources, support, and opportunities for growth that exist in this new tech frontier. Thursday, June 25 at 10am Eastern.
The fact that venture capital has been pouring into Latin America of late has been hard to ignore. This week’s news that Kredi, a Mexican company that hopes to become the “Rocket Mortgage” of Latin America, had raised $3.1 million in funding was a reminder that fintech funding in the region is as diverse as is it abundant.
With many investment dollars in Latin America flowing toward everything from digital banking to cryptocurrencies, the fundraising success of a company like Kredi, which seeks to make it easier for the average, middle-class Mexican family to own a home, suggests a healthy fintech market is continuing to develop in the country. Mortgage-related fintechs are not as common in Mexico as fintechs involved in SME financing, digital banking, cross-border fund transfer, and even financial inclusion. Adding a mortgagetech like Kredi to the country’s ranks of funded fintechs could open the door for other entrepreneurs to innovate in the space.
Founded by Javier Aldape, Fernando Nader, Hernán Belden, and Juan Carlos Mercado, Kredi provides Mexican homebuyers with a marketplace where they can find the financing product that suits their needs best. The company sees itself as part of the trend toward greater digitization in financial services in general, as well as a way to help overcome the inefficiencies and expense of mortgage financing in Mexico in specific.
Finovate alums in a number of countries made the news this week. In the U.K., digital wealth management company Nutmegagreed to be acquired by JPMorgan. Terms of the deal were not disclosed, but a “source close to the transaction” said that Nutmeg was valued at more than $972 million. On the other side of the world, OCR Labs, an identity verification specialist based in Australia, announced that it has secured an investment of $15 million in a round led by Turkish firm Oyak Group. OCR Labs is an alum of both our developers conference, FinDEVr, and our fintech conference FinovateAsia, where it took home a Best of Show award for a demonstration of its technology.
Another Finovate Best of Show winner from outside of the United States made fintech headlines this week. Conversational AI specialist Finn AI, headquartered in Vancouver, British Columbia, announced a set of new additions to its platform to give banks and credit unions greater flexibility in their embrace of chatbot technology. Salt Edge, a Finovate alum that specializes in open banking APIs that also hails from Canada, announced this week that it would help Cyprus based electronic money institution (EMI) OROPAY become PSD2 compliant.
Also too: Be sure to check out our latest guest post from Adam Goulston of Scize Group. Goulston looks at recent fintech trends in Asia and projects what those trends mean for fintech in the region going forward.
Here is our look at fintech innovation around the world.
This is a guest post from Adam Goulston, copywriter, editor, marketer, and researcher with Scize Group.
Asia is the global leader in fintech, according to a survey of 27,000+ digitally active consumers in 27 markets. And in Asia, China and India are big leaders – over half their active adult consumers use fintech services regularly. Asia sets the pace and it’s not slowing down.
In 2019, digital financial services earned $11 billion in Southeast Asia. That’s expected to grow to over $38 billion, or 11% of all financial services revenue, by 2025. Demand for fintech solutions is stronger than ever, so 2021 and 2022 are key years for retaining relevance and for new innovation.
Major trending areas include automated finance, mobile payment and, of course, blockchain. And not everything’s about machines – Asia’s huge workforce will play a major role.
Digital payment solutions
The COVID-19 pandemic pushed companies to improve automated services. In China, Alipay rolled out digital tools to support local businesses in Wuhan. This helped revive the city after the strict lockdown.
Malaysia offered WeChat Pay in 2020. It’s the first country outside China to use WeChat in the local currency. Local banks like Hong Leong Bank and Maybank were quick to link up. WeChat could expand this model elsewhere.
In Hong Kong, ZA Bank Ltd was the first virtual bank to launch a digital-only banking service. It offered a 6% opening rate on all deposits.
Meanwhil Japan, slower in shifting to cashless transactions, saw app-based payments finally go mainstream in 2020. Options include Rakuten Pay, LINE Pay, and PayPay backed by the SoftBank Group. The country was overwhelmingly cash-based just 2 years ago.
Vietnam has seen the most growth with mobile payment users increasing by 24% in the past year. The adoption rate in Thailand was 67%. China still leads, with 86% using smartphones for payments.
There are at least 150 e-wallet providers in Southeast Asia alone. Most of these apps are run by tech giants like Grab, Tencent Holdings, Singapore Telecom, and AirAsia.
More open banking solutions
The pandemic also sped up adoption of fintech banking apps and solutions, as in-person banking was often limited or unavailable. Online banking advanced. The trend has spread to investment, as seen with the Singapore Exchange (SGX).
Singapore Financial Data Exchange answered by launching the world’s first public–private open banking solution. Singaporeans could now keep track of their finances in one simple platform.
Other Asian countries are also working to build open banking structures. DBS Hong Kong introduced digital banking to provide easy access and less paperwork for SMEs.
Better financial literacy and inclusion
The World Bank notes financial inclusion is a good way to reduce poverty and improve economies. Industry’s role as a financial leader is important in poorly developed and emerging markets.
South Asia has some of the world’s lowest levels of financial literacy, but Asian fintech startups are seeking to change this and increase financial inclusion. They include Julo (Indonesia), ZigWay (Myanmar), and Wing (Cambodia). They’ve designed easy-to-understand games and products to help consumers learn how to spend, save, and invest better.
Regarding financial inclusion, Jeff is an app providing loan services in Vietnam. The app aims to open lending services to people likely to be rejected by traditional banks.
Growth of blockchain and cryptocurrency
Look to Asia for the future of blockchain and cryptocurrency. NASDAQ reports more than 31% of all cryptocurrency transactions from mid-2019 to mid-2020 were in East Asia.
Asia is a crypto mining hub, with 65% of the global Bitcoin hashrate centered in China. The South Korean market has high use of altcoin, with over 30% of convenience stores already accepting digital money. There are also large crypto exchanges in Asia trading at nearly four times higher volume than North American exchanges.
In the Philippines, the mobile game Axie Infinity is creating a way out of poverty. Created by a Vietnamese startup, it features a farming simulation. It uses Ethereum Blockchain as its currency, which helps players learn about the currency, and how to manage their finances.
Shifting employment trends
COVID-19 spurred many businesses to digitize, which shifted employment trends. In Singapore, software engineers are in high demand and experiencing net job growth. There’s higher demand for skilled fintech talent in Hong Kong as well.
Other countries are also in search of tech talent. According to CXC Global, businesses in Thailand, Japan, and Hong Kong are searching for staff in data sciences and online communications.
Companies, however, aren’t rushing to replace employees – 37% of companies in Asia Pacific are making sure staff are onboard with changes, and RPA responsibilities are defined.
Asia fintech isn’t slowing down
Fintech adoption continues to expand in Asia as it becomes part of everyday life, irrespective of economic status. The fintech market in APAC is expected to grow at 72.5% annually through 2025, continually showing dynamic growth and adaptation, moving at speeds Western countries may not match.
Adam Goulston, MS, MBA, is a U.S.-born, Asia-based content marketer and copywriter. His Japan-registered company Scize helps globally sighted business and organizations communicate their value in universally clear language.
Just when you thought the big banks might be getting a little too complacent about the challenge from fintech, JPMorgan announced today that it will acquire U.K.-based digital wealth management platform Nutmeg. Terms of the transaction were not disclosed, but Reuters cited a source who gave Nutmeg a valuation of more than $972 million (£700 million).
JPMorgan Chase CEO of International Consumer Sanoke Viswanathan said that the acquisition would give the bank the opportunity to “build Chase in the U.K. from scratch using the very latest technology.” The Nutmeg acquisition also will complement JPMorgan Chase’s U.K. digital bank launch scheduled for later this year.
A Finovate alum since 2012, Nutmeg was a pioneer in offering affordable, automated financial planning and investment services. Now the largest digital wealth manager in the U.K., Nutmeg has grown into a platform with more than 140,000 clients and $4.9 billion (£3.5 billion) in assets under management. Investors can open an account with as little as £100 or £500, depending on the product, and configure their investment goals and risk level, as well as investment style in a minutes. With a product suite that includes a variety of ISAs (Lifetime, Junior, Stocks and shares) as well as pension and general investment accounts, Nutmeg leverages exchange-traded funds (ETFs) to keep costs low and diversification options broad for investors.
Nutmeg and JPMorgan are far from strangers. The two companies announced a partnership back in November of last year to launch a “bespoke new investment offering” called Smart Alpha for Nutmeg customers. The new Smart Alpha portfolios blend Nutmeg’s core investment principles and expertise in exchange-traded funds and fractional investing with JPMorgan Chase’s in-house multi-asset knowledge and experience. Smart Alpha portfolios are designed for investors of all risk levels who want a globally diversified, dynamic portfolio derives additional returns via smart and transparent security selection.
From the rise of digital commerce to the growth of the gig economy to the challenge of a global pandemic, digital identity technology has been one of the bigger beneficiaries of a number of trends sweeping societies around the world. Add to this a new emphasis on financial inclusion and social equity, and you have a recipe for opportunity for many innovators in the digital identity space.
The latest company to take advantage of the current moment is OCR Labs, which made its Finovate debut at our developers conference, FinDEVr Silicon Valley, in 2016. The company, headquartered in Sydney, Australia and founded by Matthew Adams and Daniel Aiello, returned to the Finovate stage the following summer, earning a Best of Show award for a demo of its ID verification solution.
OCR Labs combines five different technologies – ID document OCR, document fraud assessment, liveness detection, video fraud assessment, and face matching – in a single, end-to-end digital identity experience. The company’s technology has been deployed in a wide range of verticals – from financial services and e-commerce to telecommunications and real estate – to provide AML and KYC-compliant digital ID verification and customer onboarding.
This week OCR Labs announced that it had raised $15 million (EUR 12.5 million) in Series A funding. The round was led Oyak Group of Turkey and will enable the company to expand into markets into Turkey, the U.K., and throughout Europe. OCR Lab currently maintains an international headquarters in London.
“No one wants to spend hours trying to prove who they are, whether it’s for a job or for a bank account, and we also want to know we’re protected against identity theft and fraud,” OCR Labs co-founder Daniel Aiello said. “Digital ID verification has a key role to play, but this year we’ve also seen the limitations if hybrid models are used. People are a barrier and a risk, but fully automated technology can have a huge impact on many industries and privacy. OCR Labs is built to be secure, frictionless and fast, and capable of recognizing ID documents the world over.”
Enjoying triple-digit growth since its launch, OCR Labs has partnered with Reed Screening to help businesses verifying candidate identities during the COVID crisis ahead of a potential in-person COVID check mandate later this month. There is some pressure to allow businesses to continue remote COVID checking, an idea with which OCR Labs understandably sympathizes.
“The need for digital verification is growing exponentially,” Aiello said. “This past year we’ve seen more demand from new sectors as they try to navigate the pandemic and an inability to operate in-person. We believe it has accelerated what needed to happen.”
