Pleo is Europe’s Latest Fintech Unicorn; Nigeria-based Lidya Scores $8 Million

Pleo is Europe’s Latest Fintech Unicorn; Nigeria-based Lidya Scores $8 Million

Six years after its launch, Danish fintech Pleo has become Europe’s latest fintech unicorn.

The smart company card provider announced early this week that it had raised $150 million in Series C funding – the largest Series C round for a Danish company to date – earning a valuation of $1.7 billion in the process. The new capital, according to CEO and co-founder Jeppe Rindom, will help scale the business and “ramp up” the company’s product offering. Pleo will also look at opportunities for market expansion, both by entering new markets as well as “doubling down” on the markets that Pleo is already active in.

“While this investment round is taking Pleo to new heights,” Rindom noted in a post on the company’s blog this week, “our core mission remains the same: to make everyone feel valued at work. Since day one, we’ve been committed to creating a spending solution that encourages a work culture built on trust and transparency, instead of overwhelming control and needless bureaucracy.”

More than 17,000 companies from a variety of industries rely on Pleo’s smart company cards that automate expense reports and make company spending easier. Pleo integrates seamlessly with major accounting software packages – including Xero, Sage and Quickbooks – and features three pricing tiers, Essential, Pro, and Premium – to make its technology accessible to small companies as well as bigger firms with larger teams.

The Series C round was co-led by Bain Capital Ventures and Thrive Capital. Existing investors Creandum, Kinnevik, Founders, Stripes, and Seedcamp also contributed.


Our other international fintech funding news story centers on Finovate alum Lidya, a digital bank based in Nigeria that announced receiving an investment of $8.3 million this week. Lidya, which made its Finovate debut at our fall conference in 2016, helps small and medium-sized businesses quickly secure the financing they need in order to grow and expand.

Companies can build a profile in just five minutes, select the type of loan that works best for them, and secure financing within 24 hours. Lidya’s credit scoring technology, Sardis, leverages machine learning, a proprietary algorithmic model, and an analysis of more than 1,000 data points to build a credit profile and establish creditworthiness.

“A customer repeat rate of over 90% in Nigeria and Europe shows that we are providing the services that SMEs need,” Lidya co-founder and CEO Tunde Kehinde explained. “At the height of the pandemic, we started lending in Europe. It was an important means of financial support for multi-sectoral businesses, including care, groceries and other important sectors. Multi-sectoral businesses. When the world began to emerge from this crisis, we were innovative. We are committed to enabling a strong ecosystem of leading SMEs with our products, unlocking their potential and helping the growing economy rebuild better. “

The pre-Series B Funding round was led by Alitheia Capital (by way of the uMunthu Fund) and featured participation from Bamboo Capital Partners, Accion Venture Lab, and Flourish Ventures. Lidya has operations in Poland and the Czech Republic, as well as Nigeria, and manages a technical team in Portugal. The company has raised a total of $16.5 million.


Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific


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LoanPro Scores $100 Million in Series A Funding

LoanPro Scores $100 Million in Series A Funding

The tech-first alums of our FinDEVr developers conferences are often as savvy fundraisers as they are sharp technologists. This week in our Q2 Alum Funding Report, we noted that two of the quarter’s biggest fundraisings were from companies that made their Finovate debuts at FinDEVr events: Brazilian neobank NuBank, which secured $750 million in funding in June, and financial data network Plaid, which raised $425 million in funding in April.

This week, we add another FinDEVr alum to this list. LoanPro, a Farmington, Utah-based fintech that made its FinDEVr debut earlier this year, has raised $100 million in Series A funding. The growth equity investment comes courtesy of FTV Capital, and will help LoanPro add to its SaaS-based loan management, servicing, and collections platform, as well as enter new lending verticals and make investments in other “client-centric growth initiatives.”

“As founders who started out as lenders, we understand the pain points that lenders experience,” LoanPro co-founder and CEO Rhett Roberts explained. “LoanPro was built by lenders for lenders – we use a modern tech stack to simplify the user experience of managing loans – we do the hard work on the back end to make the front end clean and simple to use.”

With more than $15 billion of loans under management and 600+ clients in the U.S. and Canada, LoanPro offers a diverse range of loans types and lending programs. The company’s product suite include prime, sub-prime, and personal loan products, as well as consumer, auto, and business financing solutions. LoanPro also offers point-of-sale financing and the retail financing rage of the day – buy now pay later payment options – as well. LoanPro’s platform gives lenders an automated, configurable workflow, real-time access to data and insights, frictionless payment collections, and a flexible lending program.

In addition to the financial support, FTV Capital will use its market knowledge and strategic network to help grow LoanPro’s platform. The firm’s Robert Anderson, who led the investment, will join LoanPro’s board of directors.

“FTV Capital is excited to partner with LoanPro’s strong, passionate leadership team who have built an industry leading SaaS platform based on a deep understanding of their market and the needs of their customers,” Anderson said.


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How Banks Can Beat Big Tech

How Banks Can Beat Big Tech

From Big Tech to Big Retail, banks and other traditional financial services providers are facing a unique and potentially existential challenge These companies are leveraging their technology-first platforms, powerful brands, and history of innovation to draw customers away from relying on banks for a growing amount of their financial and banking needs.

We caught up with Richard Steggall, CEO of Urban FT, to talk about the world that banks find themselves in today and what they need to do in order to better engage their customers and ward off the challenge from Big Tech and Big Retail.

A Finovate alum for more than six years, Urban FT offers a white-label, B2B digital banking platform and includes financial institutions, brokerages, insurance companies and non-traditional FSOs among its customers.


How big is the threat that banks – smaller banks in particular – face from Big Tech companies?

Richard Steggall: When it comes to the threat regional banks and credit unions face from big tech, we’re seeing a true David versus Goliath moment play out. There is unprecedented pressure mounting for small FIs to digitize – fast – and for the majority of FIs, the pace is much faster than what their capabilities and resources allow. As FIs continue to fall behind the tech curve in delivering on the convenience consumers demand, they’re losing customers in the payments arena to the ‘Fantastic Four’ in payments (Paypal, Stripe, Square and Adyen). And in the long term, FIs risk leaving the door wide open for tech giants like Apple, Amazon and Google to become our bankers.

According to a recent report from McKinsey,  in order for regional banks and credit unions to preserve their market share, they must find a way to digitally transform the end-to-end “customer journey” by the end of 2022. No matter how large of a budget an FI has, that certainly does not leave much time for the digital overhaul that’s needed to achieve this lofty goal. As the same report outlines, transaction banking trails nearly a decade behind the technology industry when it comes to practices in customer-management and sales. These delays make a successful digital transformation of the customer journey a decidedly formidable – but certainly not unfeasible – vision for small FIs.

How can banks leverage their strengths to better compete with tech giants that are entering the banking services space?

Steggall: As I mentioned, the financial services industry is in the midst of a David vs. Goliath scenario. With big tech continuing to invade financial services – such as the November 2020 relaunch of Google Pay – some are prematurely saying that small FIs will soon become casualties of war. But, in reality, we’re still in the early battles and there’s no clear frontrunner yet. While regional banks and credit unions may not boast the tech savvy of fintech giants nor deep pockets of large bank conglomerates, they have a potentially more powerful weapon: the hearts of customers.

Reinforced by close community ties and unmatched trust, small FIs are ideally positioned to deliver personalized, innovative user experiences (UXs) that unlock meaningful, local economic development value rather than line the pockets of predatory big tech elites. This area is their strength and they need to home in and capitalize on it.

Moreover, they can benefit from the chinks in the armor of their competitors, as big tech’s approach to financial services is far from flawless. According to a recent Ponemon study, 86% of consumers are “very concerned” about how tech companies are using their personal information. Moreover, in good news for FIs, consumers still overwhelmingly trust banks more with their data than other industries, according to a report from nCipher Security.

This is the opportune moment for small FIs to cut in, striking a balance of innovation and ethics in digitizing. While big tech hoards consumer data to bolster other revenue streams like advertising, FIs can “wow” customers by using ethically sourced data to drive responsible personalization and superior UXs that safeguard privacy.

How do banks make the best of their newly-created digital experiences in a post-COVID world in which human-to-human interaction is again possible, if not preferred?

Steggall: While regional banks and credit unions have a leg up in trust and transparency, they also need to understand where their own weaknesses and risks lie. This exposure is largely in the 3Ds: data, digitization and deployment (of technology).

Customer data is truly the holy grail because it allows FIs to better serve consumers no matter where they lie on the financial spectrum. For example, if an FI knows a customer has college-aged children, there is a strong opportunity to be the thought leader on student lending. But there’s a fine line; in an environment where consumers feel surveilled, catchphrases like “convenience”, “personalization” and “user experiences” may lose their appeal.

By upholding the old adage “with great power comes great responsibility”, FIs can rise above big tech and continue to learn about their customers in organic ways that don’t find them creeping in on online activity. Rather, the purpose of technology deployment is to infuse ethically enhanced human touchpoints in all processes, such as allowing customers to provide pertinent financial information voluntarily that might help an FI build a profile.

Given that banks will never out-tech the tech titans, what is the most constructive way for financial institutions to understand and invest in technology, especially digital technology?

Steggall: In terms of digitization and technology deployment, one of the most pressing issues facing small FIs is the disjointed manner in which they’ve been innovating. To date, most small FIs have contracted with various third-party fintech vendors to complement their traditional commercial offerings with piecemeal digital tools and services, including remote deposits, remote credit card processing and wealth management dashboards.

While FIs need to rapidly adopt fintech and digitize their service offering to keep pace with consumer demands, digital transformation has largely been happening within a temporary, makeshift model. Though this ‘band-aid’ approach to innovation has bought FIs some time, it hasn’t healed the fundamental problem that’s restraining digitization. Rather, this framework has inadvertently staggered an infinite and vast maze of third-party fintech platforms – all using different forms of connectivity and technology languages. Sometimes, tools are not even directly connected to the banking core. Moreover, the countless agreements require ongoing vendor due diligence, contract reviews and audits. This cumbersome approach to fintech has overwhelmed some FIs with a complex labyrinth, deepening the innovation gap for regional banks and credit unions, in particular.  

Small FIs must break free of this constrictive fintech investment model and focus on centralizing the digital ecosystem so they can become more malleable, agile, and nimble in responding to surging digital demands. Rather than let the labyrinth get more twisted, a fintech banking core can serve to connect core banking functions with digital technology. In the long term, an effective fintech core will help FIs better scale and maximize the investments they make in technology.

What role does Urban FT play in helping banks and other businesses close the technology gap?

Steggall: At Urban FT, our mission is succinct but powerful: “Dream Big, Deliver Exceptional.” We’re focused on empowering FIs – especially local and regional banks and credit unions –  to better scale continuous innovation so they can gain a competitive advantage and protect their market share from the likes of big tech. We see ourselves as the bridge between FIs and fintech innovation.

As an example of our commitment to help close the technology gap, our X-35 FinTech Core is an API-first, developer-friendly and cloud-based technology hub that operates alongside and in tandem with an FI’s banking core or payment processor. Essentially, it consolidates any existing tools and all fintech solutions an FI wants to deploy. By placing all solutions within one centralized platform, the full digital ecosystem becomes accessible as part of a singular vendor relationship that’s governed by one contractual relationship. X-35 has been designed to enable FIs of any size to rapidly and continuously launch to market truly innovative products. And now they can do this without the prohibitive expenses they were previously faced with.

Urban FT helps advance innovation once thought of as impossible for small FIs, providing both the foundation and the plumbing so that our clients can deliver tomorrow’s fintech innovations today.

Are there factors that tend to make a given company’s digitization initiative more likely to succeed than not? Do the success stories have a similar theme?

Steggall: While digital transformation certainly needs to be a priority for FIs of all sizes, innovation for the sake of innovating is not the answer. In today’s fast-paced marketplace, consumers are signaling desires for more human touchpoints and sometimes this touch can get lost in the midst of technology adoption – especially when resources are limited.

To create long-term value, small FIs should continue their humanized, high-touch approach to banking. This means deeply understanding the most pressing pain points their customers and potential customers are facing. Being a problem-solver will help FIs reach broader audiences, attract more customers, launch more services and clear more transactions. For example, at least 6% of the population – over 14.1 million adults – are unbanked in the United States. By exploring how to serve the unbanked and underbanked, FIs can tap into new segments of their communities and connect them with tailored services that improve their financial health.

In particular, a successful digital transformation requires an FI to think carefully about how two very different operating models – one current and one future state – should be integrated and operate in tandem under the same roof. Broadly speaking, there are three models for this integration: full integration, a digital center of excellence, and a separate digital department. For most small FIs, a fully integrated model is not scalable whereas a separate digital department does not engage enough of the organization. We see the most success when the digital center of excellence is set up, building a bridge to fintech innovation.


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More Than $2.8 Billion Raised by 14 Alums in Q2 2021

More Than $2.8 Billion Raised by 14 Alums in Q2 2021

Finovate alums enjoyed their biggest Q2 fundraising to date. A total of 14 alums from both our Finovate and FinDEVr conferences raised in excess of $2.8 billion in equity funding over the course of April, May, and June of this year.

For those who wondered if the second quarter of 2021 would represent a continuation of the strong performance Finovate alums recorded in Q1 of 2021, the answer is an unqualified “yes.” In fact, Q2 2021 funding not only exceeded all previous second quarter tallies; the sum also rivaled all previous first quarter alumni funding totals, as well.

Previous quarterly comparisons

  • Q2 2020: More than $975 million raised by 15 alums
  • Q2 2019: More than $1.8 billion raised by 29 alums
  • Q2 2018: More than $1.5 billion raised by 25 alums
  • Q2 2017: More than $726 million raised by 25 alums
  • Q2 2016: More than $510 million raised by 23 alums

Most of the funding in the second quarter came in the month of June, both in terms of the amounts raised and the number of alums involved. Modest second quarters are no surprise, and this year’s slow April – with only a pair of alums announcing funding – is reminiscent of last year’s slow May in which only three alums announced funding.

Top Equity Investments for Q2 2021

  • NuBank: $750 million
  • Plaid: $425 million
  • Trulioo: $394 million
  • Klarna: $369 million
  • Scalable Capital: $180 million
  • Paysend: $125 million
  • SmartAsset: $110 million
  • TipRanks: $77 million
  • Arkose Labs: $70 million
  • Credit Sesame: $51 million

Four big fundraisings dominated the second quarter for Finovate alums. NuBank’s $750 million was the clear standout, but impressive sums were raised by three other alums – Klarna, Plaid, and Trulioo – in Q2 also. Altogether, the top ten equity investments for Finovate alums in the second quarter represented $2.55 billion or more than 91% of the total raised by alums in Q2 2021.


Here is our detailed alum funding report for Q2 2021.

April: More than $440 million raised by two alums

May: More than $303 million raised by four alums

June: More than $2.1 billion raised by eight alums


If you are a Finovate alum that raised money in the second quarter of 2021 and do not see your company listed, please drop us a note at research@finovate.com. We would love to share the good news! Funding received prior to becoming an alum not included.

Keep Your Friends Close and Your Data Closer: How Fintech Teams Grow Engagement and Digital Outcomes

Keep Your Friends Close and Your Data Closer: How Fintech Teams Grow Engagement and Digital Outcomes

Upcoming webinar
Title: Keep your friends close and your data closer: How fintech teams grow engagement and digital outcomes
Date: Tuesday, July 27, 2021
Time: 2:00 PM Singapore Time
Duration: 1 hour

We have moved into a new, digital era in finance and banking. For those businesses that have not pivoted and evolved with the times, it will be an uphill struggle to keep customers happy and engaged. For those businesses that embraced new digital strategies, and upgraded their marketing tech stack, now is the time to reap the rewards of increased growth and customer loyalty. And for those businesses that are somewhere in the middle, it’s becoming ever more important to be bold and experimental when testing and engaging your customers with new services and features. Your business’s future depends on it.

Join the latest Finovate webinar, in collaboration with Braze and Amplitude, as the panel explores:

  • The art of balancing and blending product analytics and customer engagement, and why you need both in your strategy
  • Managing disparate data and leveraging data to inform an event-driven martech strategy
  • Going beyond understanding your customer, and the power of behavioural analytics
  • Future-proofing your finserv brand, and responding to changes in customer demands and tech trends

Featuring Alka Gupta, Director of Data & People, BukaWarung; Chye Yien, Senior Strategic Business Consultant, Braze; Julio Bermúdez, VP APAC & LATAM, Amplitude; and Alex Bird, Product Manager, Openpay. Moderated by David Penn, Research Analyst, Finovate. 

Register now >>


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Cross River Bank Helps Bring Fly Now Pay Later Trip Financing to the U.S.

Cross River Bank Helps Bring Fly Now Pay Later Trip Financing to the U.S.

There may be few businesses more excited about the prospect of a post-COVID era than those in the travel industry – which makes the news of a collaboration between U.K.-based Fly Now Pay Later and BaaS provider Cross River Bank all the more musical to homebound ears. The partnership will enable Fly Now Pay Later to leverage Cross River Bank’s FDIC license to offer its travel financing solution in the United States. The company’s financing solution, available at checkout as well as via the Fly Now Pay Later’s Anywhere app, will enable U.S. travelers to book trips and spread the cost of travel over time.

“The recovery of travel is likely to be gradual, but when it happens, we hope that by giving people the freedom to book a trip and pay at a pace that works for them, will help spur reservations,” Fly Now Pay Later CEO Jasper Dykes said in May during the company’s recent funding announcement. “There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights. By removing financial boundaries, we hope to open the post-COVID-19 world for travelers and reconnect people with their friends and families around the globe.”

For Cross River Bank, the partnership announcement with Fly Now Pay Later comes only a few weeks after the company completed its acquisition of data and analytics firm PeerIQ. In addition to supporting Cross River’s mission to provide greater access to financial services and enable greater financial inclusion, the acquisition will enable Cross River to expand its offerings to include end-to-end SaaS solutions, advanced portfolio analytics, as well as further data aggregation capability and risk management tools. In June, Cross River Bank also unveiled Cross River Digital Ventures, a venture capital division that will invest in companies innovating in lending, payments, investing, and fintech that offer “strategic value” to both Cross River and the technology industry more broadly.

“By providing strategic support to early-stage companies we can build on the Cross River momentum to fuel and strengthen the next wave of fintech innovation,” Cross River Head of Corporate Development Hillel Olivestone said. “These are promising startups that align with Cross River’s mission and values, and we look forward to working with them to grow and expand the fintech ecosystem.”


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Open Finance Platform Moneyhub Secures $18 Million to Fuel Expansion

Open Finance Platform Moneyhub Secures $18 Million to Fuel Expansion

In its biggest investment round to date, U.K.-based Open Finance platform Moneyhub has secured $18 million in funding to support its expansion into new markets. The round was led by Sir Peter Wood, founder of Direct Line and Esure, via his new investment vehicle, SPWOne.

“It is incredibly rewarding to be able to deliver results to both investors and clients in this truly transformational landscape,” Moneyhub CEO Samantha Seaton said. “It is a fantastic vote of confidence from Sir Peter and his team, who are renowned for foreseeing game-changing growth opportunities – and a ringing endorsement of our team and our strategy for applying new technology where the rules of engagement have been turned upside down.”

A Finovate alum for more than four years, Moneyhub demoed the SmartAsset feature of its solution at FinovateEurope 2017. At the event, the company showed how SmartAsset’s AI-driven, intelligent messaging functionality helps users better manage their finances. In the years since, Moneyhub has grown into a leading open finance and data intelligence platform that offers both API and white label solutions to help businesses leverage personalization to enhance the customer experience. In the U.K., Moneyhub currently provides customer-permissioned financial data access to more than 200 financial services providers via 584 connections with an additional 3,500 connections in Europe.

Moneyhub’s funding announcement comes on the heels of a new partnership with Triodos Bank, a sustainable bank that supports working toward positive social, environmental, and cultural change. Founded in 1980, Triodos Bank serves more than 700,000 banking customers in the U.K., Germany, Spain, the Netherlands, and Belgium. The bank has lent more than £8 billion to support projects around the world that are dedicated toward “benefitting the people and (the) planet.” Triodos Bank also co-founded the Global Alliance for Banking on Values (GABV), a 63-bank network designed to promote sustainable banking.

“We are pleased that our customers will now be able to integrate their everyday banking with Moneyhub’s app and enjoy the many benefits of Open Banking, such as helping them to easily track spending and set budgets to help manage money,” Triodos Bank U.K. head of retail banking Gareth Griffiths said.

In addition to its partnership with Triodos Bank, Moneyhub teamed up with mortgage market insights and intelligence firm Hometrack, shared branch banking innovator OneBanks, and adtech specialist Zedosh this summer; partnered with financial health platform Level Financial Technology and charitable fundraising app Kynder this spring; and began the year collaborating with professional services company Aon and ESG investment platform The Big Exchange.

Strands and Credolab Bring Smart Money Management to Banks

Strands and Credolab Bring Smart Money Management to Banks

Barcelona, Spain-based Strands and Singapore’s credolab announced a partnership this week that will give banks a new solution to help their customers make better decisions with their finances. The collaboration will embed credolab’s credit scoring technology into Strands personal finance management platform, giving banks the real-time ability to obtain relevant customer insights with embedded risk assessments.

“Strands’ expertise in developing customizable digital money management solutions for banks will add great value to our clients globally,” credolab founder and CEO Peter Barcak said. “We are confident that our embedded technology will help Strands develop solutions to promote a more delightful way of banking that empowers customers with meaningful interactions, and makes them happier, more loyal, and more profitable.”

In their joint statement, Strands and credolab noted that retail banks often face challenges when it comes to improving customer engagement and providing long-term value to their customers. They blame a lack of relevant data, as well as the inability to generate significant insights into customer behavior and preferences. The integrated solution will serve as a “one-stop shop” for banks to realize new potential revenue sources by helping their customers be smarter with their money.

“By partnering with credolab, Strands is in a stronger position to deliver state of the art financial management solutions to banks worldwide,” Strands CEO Erik Brieva said. “This collaboration will allow us to embed next generation scoring technology into our AI-driven product suite, meeting financial institutions’ increasing demand for smart, highly customizable, and scalable FinTech white-label solutions.”

Credolab demonstrated its CredoScore technology at FinovateAsia 2018. This spring, the company has announced a collaboration with regional credit risk and decision analytics company Qarar to help the UAE-based company enhance its credit risk scoring processes.

Strands made its most recent Finovate appearance last month at FinovateAsia Digital. Teaming up with Tearsheet to publish its guide to “Banking as a Service,” in May, Strands began the year with news that CEO Brieva had been named to Analytics Insight’s Top 10 Most Inspiring CEOs.


Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin American and the Caribbean

Karat Financial Banks $26 Million for its Credit Card for Digital Creatives

Karat Financial Banks $26 Million for its Credit Card for Digital Creatives

This week in our Finovate Fintech Halftime Review eMagazine, Senior Analyst Julie Muhn explored the trend of niche banking. Niche banking leverages the current explosion in identity-awareness to create unique and tailored banking experiences for members of a growing number of different communities.

The news that Karat Financial, a Los Angeles, California-based company that offers a credit card designed for digital creatives, has raised $26 million in Series A funding is the latest indication that this trend may only be growing stronger.

Launching its “Black Card for Creatives” last year, Karat is targeting the digital influencer economy of YouTubers, Twitch livestreamers, and others who often struggle to translate their online earnings into creditworthiness in the eyes of traditional lenders and banks. And while this challenge extends to a broader population than just digital creatives, there is no small benefit for a banking services company in being associated with one of the more vibrant developments in 21st e-commerce and entertainment.

Karat offers a business card with cash back rewards, and zero-cost credit advances for sponsorship payments. The corporate card acts much like an American Express card, with balances paid off monthly. This lack of interest charges – as well as Karat’s no-fee policy – helps keep the cost of using the card as low as possible, a priority for digital creatives with potentially volatile revenue sources.

To this point, in lieu of a traditional bank application, Karat wants to know about Instagram followers and sponsorship deals, YouTube subscriber counts and Twitch donations in order to get digital creatives the access to credit that is commensurate with their success as online influencers.

Karat was founded by Eric Wei, a former product manager at Instagram, and Will Kim. This week’s Series A round – which consisted of $15 million in debt financing and $11 million in venture funding – was led by Union Square Ventures and featured participation from GGV Capital and SignalFire.


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Opportunities for AI in Financial Services in Asia

Opportunities for AI in Financial Services in Asia

FinovateAsia 2021 is over. But we’re keeping the doors open and the lights on for a few more days to let those of you who attended our digital fintech conference last month to check out any of the keynote addresses and panel discussions that you might have missed. The platform will remain available to FinovateAsia 2021 attendees until July 6th.

One of the hot topics in Asia – like in the rest of the world – is the rise of artificial intelligence, or AI, and its potential impact on fintech and financial services. At FinovateAsia this year, DreamQuark’s Mikko Hietanen and David Destemberg led a virtual meeting on how to use AI in order to help customer to select ESG investments. Among our demoing companies, Singapore-based Crayon Data demonstrated its AI-led platform, maya.ai, that enables enterprises to create highly personalized experiences for their customers.

The latest Big Read on AI in financial services in Asia comes from TechWireAsia, which reviewed a report from McKinsey titled AI in banking: Can banks meet the challenge? as a way of opening up the discussion. The TechWireAsia overview has been making the rounds throughout the fintech Twitterverse, and its support of McKinsey’s conclusions – that banks, including those in the Asia-Pacific, need to be wary of competition from digital challengers that may be quicker to embrace AI – reminds us of how big the stakes are for traditional financial services providers.

Importantly, innovations in AI are not limited to front- or customer-facing solutions. In fact, in Southeast Asia – countries like the Philippines, Indonesia, Malaysia, and Singapore – some of the biggest gains for AI technology deployment have been in backend operations. This is an area where banks can experiment and test new, AI-powered, solutions – and even develop a more AI-friendly culture, if necessary – before attempting to deploy more customer-facing, (and potentially brand-impacting) AI-based technologies.

That said, as far as the McKinsey report is concerned, for those financial institutions that do pursue what the report calls an “AI-bank” strategy, the rewards could be huge. McKinsey estimates that AI “can potentially unlock $1 trillion of incremental value for banks, annually.” This value is represented in more than 25 different AI use cases capable of helping banks grow revenues, lower costs, and “uncover new and previously unrealized opportunities” due to an AI-given ability to generate key customer insights from massive volumes of data.

And while offering much in the way of a carrot for banks to move carefully and quickly to adopt AI-based technologies, the McKinsey report does wield a stick, as well. “Banks that fail to make AI central to their core strategy and operations,” the report reads, “will risk being overtaken by competition and deserted by their customers.” The report highlights four key trends – rising customer expectations, the accelerating pace of AI adoption by financial institutions, the challenge of digital ecosystems, and competition from Big Tech – that are most likely to compel banks and financial services companies to act.


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How Smart Data Drives Agility in Financial Services

How Smart Data Drives Agility in Financial Services

This is a sponsored post in collaboration with InterSystems, Gold Sponsors of FinovateFall


Delivering reliable, clean, timely data into the hands of decision makers is vital for financial institutions. While this has been true for quite some time, data is becoming more important than ever. The events of the past year have irrevocably demonstrated this point, with financial intuitions realizing just how powerful accurate data is when it comes to making pivotal decisions.

Adding to this complexity is the explosion in the amount of data we’re creating. You only need to revisit this mind-bending stat from TechJury to realize just how much we’re producing: “1.7MB of data (was) created every second by every person during 2020. In the last two years alone, an astonishing 90% of the world’s data has been created. 2.5 quintillion bytes of data are produced by humans every day.”

What does this increased focus on data mean for financial institutions?

  1. The cost of managing data is only going to increase: The amount of data is growing, and with that comes growing costs associated with accessing, ingesting, processing, and storing that information. More data means more throughput and more storage, both of which you’ll pay for. And if you haven’t got systems in place to handle the increase in throughput, you’re going to experience delays. This can not only cause reputational damage, but can also have regulatory and compliance impacts if you don’t have appropriate systems in place to meet your obligations.
  2. It’s becoming harder to compete with emerging players: There’s certainly a benefit to having an established business in that you’ve got insights at scale. With that comes the weight of managing legacy systems and architecture. The more information we pour into our systems, the harder we have to work to be agile.
  3. Customers now expect smart insights: We’re all driven by the technology that powers our lives. And today’s customers expect financial institutions to mirror the intelligent insights that our smart watches and apps deliver to us. There’s a growing expectation that if our watches can tell us the how we can improve our health through personalized exercise goals, sleep reminders, and mindfulness breaks, then surely our banks can tell us how and when to optimize our portfolios, how to increase savings, or how to maximize lines of credit.
  4. Data is essential for people to do their job: In the workplace there’s an expectation, particularly among those coming out of business school, that people will have access to the information they need to do their jobs. Data has become an integral part of doing business. We are rapidly moving beyond just making sure we have the data, and it’s now more about how reliable and accessible it is that makes the difference to employees.

Beyond breaking silos

There are many views on how organizations can improve movement and quality of information. However, some of these approaches can create their own issues.

Financial institutions need to move beyond breaking silos and focus on timely, clean, quality, solutions around data catalogues. This will allow them to map out the entire data needs of the organization. In short, they need to consider the connectivity of their information — how their data can be shared seamlessly across the whole data ecosystem. It’s what we refer to as “data fabric”.

What is data fabric?

Data fabric is an architecture and set of data services that provide consistent capabilities across a choice of endpoints spanning multiple on-premises and cloud environments. Gartner describes it as “frictionless access and sharing of data in a distributed network environment.”

How smart data fabric is driving agility in financial services

Implementing a smart data fabric allows financial institutions to make better use of their existing architecture because it allows their existing applications and data to remain in place. It then integrates, harmonizes and analyses the data in flight and on-demand to meet a variety of business objectives.

Having a smart data fabric allows financial institutions to remain agile in a number of ways:

Allows businesses to make smarter decisions faster

Banking is seeing new market entrants like gaming companies, retailers, transports and telcos, all clambering to get in on the financial services game. A well-constructed data fabric empowers executives and lines of business to monitor and anticipate changes, both positive and negative, in internal and external environments.

Helps identify new segment opportunities

One of our customers anticipated the impact of distressed debt amongst their credit card consumers and utilized their data fabric to proactively contact potentially affected clients. By offering extended payment terms they fostered stronger customer loyalty and mitigated a potentially large bad debt situation. This same process of customer segmentation can be used to identify new market opportunities.

Enhances customer experience

A smart data fabric allows faster processing of clean reliable data which financial institutions can use to share insights with their customers. By sharing these insights, financial institutions can foster loyalty and drive spend in a highly competitive environment.

Drives efficiency and cost savings

Finally, making decisions based on timely, accurate data allows financial institutions to reap all the benefits just described. Without the certainty that comes with reliable data, none of these decisions can be made efficiently or cost-effectively because the time and effort associated with managing data simply outweighs the benefits.

Leading financial services organizations are leveraging smart data fabrics to power a wide variety of mission-critical initiatives, from scenario planning, to modelling enterprise risk and liquidity, regulatory compliance, and wealth management.


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Human Resources Management Innovator Gusto Teams Up with Xendoo

Human Resources Management Innovator Gusto Teams Up with Xendoo

Cloud-based payroll benefits and human resource management innovator Gusto announced a partnership with online accounting and bookkeeping firm Xendoo to help launch Xendoo Payroll. Gusto Head of Partnerships Somrat Nyogi described the partnership as part of an overall trend toward digitization of key business operations. “Through our partnership, Xendoo is combining payroll and bookkeeping services to deliver financial peace of mind to small business owners,” Nyogi said.

Not only is this week’s partnership announcement part of a relationship between the two companies that goes back “for years,” but the collaboration, according to Xendoo CEO and founder Lil Roberts, also anticipates the beginning of a “long-term deeper tech partnership” between the two firms.

“Partnering with Gusto was a natural decision as we both strive for the same outcome: taking the stress out of finances for small business owners so they can focus on what matters most – growing their businesses,” Roberts explained. “Integrating Gusto’s embedded payroll into our new Xendoo Payroll solution will allow us to better serve our customers and expand our offering to create an all-in-one-place solution for the SMB community.” 

Available via API, Gusto Embedded Payroll enables developers to embed and customize payroll functionality into their platforms. In addition to Xendoo’s launch, Gusto reported that “more than a dozen” companies already have begun to deploy the new payroll solution. Moreover, these firms will be able to leverage their new payroll functionality to gain deeper insights into their customers and discover opportunities to provide additional services. Among those first out-of-the-gate with Gusto Embedded Payroll is SMB banking platform Novo, which will become one of the first platforms of its kind to offer integrated payroll services.

“Payroll is one of the biggest expenses for small businesses, and being able to integrate it more deeply into the whole financial picture opens up many opportunities to optimize cash flow and operations,” Novo VP of Product Matt Hamilton said. “We’re excited about working with Gusto to provide the most flexible payroll experience to our businesses.”

Making its Finovate debut as ZenPayroll in 2014, Gusto was founded in 2011 and is headquartered in San Francisco, California. From its origins as a payroll services startup, Gusto has grown into a small business human resources management platform that helps companies with employee onboarding, benefits, insurance, and other HR operations. Plans start as low as $45/month and more than 100,000 businesses are on the Gusto platform.

Gusto has raised more than $516 million in funding, and includes Fidelity Management and Research Company, and Generation Investment Management among its most recent investors. Earlier this month, the company announced its first acquisition, a startup called Ardius that automates tax compliance for companies with R&D tax credits. Joshua Reeves is Gusto CEO.


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