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Finovate Global Germany: Investing in Embedded Finance, Open Banking in Payments, N26 in France

Finovate Global Germany: Investing in Embedded Finance, Open Banking in Payments, N26 in France
By David Penn Posted on
Categories: Alumni News, BioCatch, Daily news, Envestnet, Finovate Global, Temenos, Yodlee

This week’s edition of Finovate Global features the latest fintech news from Germany, where investors are backing innovations in embedded finance, payments companies are taking advantage of open banking, and the green shoots of crypto spring are growing ever more apparent.

Solaris secures funding

Germany’s embedded finance platform Solaris secured $103 million (€96 million) in a Series F round this week. The investment was led by SBI, one of Solaris’ earliest investors, with other existing investors also participating. Solaris will use the additional capital, which takes the firm’s total funding to more than $486 million (€450 million), to onboard its ADAC (Allgemeiner Deutscher Automobil-Club) credit card program, strengthen its core capital, and invest further in its platform.

“This is a significant milestone for Solaris on our path to sustainable, profitable growth,” Solaris CEO Carsten Höltkemeyer said. “The funding underlines the high level of confidence our investors have in the transformation of our company.”

In addition to the investment, the Series F also included a financial guarantee of up to $108 million (€100 million) capital equivalent.

A pioneer in the banking-as-a-service business for nearly a decade, Solaris has grown into a major banking and technology provider with more than 750 employees at ten locations in both Europe and India. The company’s BaaS solution enables businesses to embed digital banking services – including payments, lending, and identity verification – directly into their platform. In addition to making it easier for companies to launch customized financial products and services, Solaris has secured the requisite licensing – including an e-money license for both the UK and EEA – to help companies navigate the regulatory complexities of doing business across the region.

Headquartered in Berlin, Solaris realized net revenues of $140 million (€130 million) in 2022. Last fall, the company issued a study – Disrupting the value chain for financial services – How to drive revenue growth with embedded finance – that highlighted “easier access to services” as a major driver of demand for embedded financial solutions.

Micropayment partners with Tink for Pay by Bank

Berlin-based payment processor Micropayment has turned to open banking platform Tink to add Pay by Bank to its payments offering. Live in Germany, Austria, and Switzerland, Micropayment’s Pay by Bank enables consumers to initiate payments directly from their bank account to the seller’s account when purchasing goods and services. A growing preference for both merchants and consumers, account-to-account (A2A) payments provide a secure and streamlined experience for customers and lower costs for merchants.

“The DACH region is a key market for us, and Tink’s dedication to serving merchants across various industries has been invaluable,” Micropayment CSO Thomas Knoth said. “Their payment method offers consumers the speed, reliability, and security they expect, making it a seamless experience for both merchants and consumers.” In a statement, Micropayment noted that it plans to take further advantage of Tink’s pan-Europe connectivity in the future.

Founded in 2005, Micropayment is a full-service payment provider that provides its customers with software implementation, payment processing, detailed analysis, and more. The company offers nine different payment options designed specifically for e-commerce and paid content services. Micropayment customers can integrate the technology via ready-made payment windows and preconfigured shop logins, as well as white-label APIs and interfaces.

“Collaboration with Micropayment has got off to an excellent start and we are gaining traction in a highly competitive landscape, by offering merchants a payment method that offers everything a consumer has come to expect – familiarity, speed, reliability, and convenience,” Tink DACH Payments Director Thomas Gmelch said.

A Finovate alum since its Best of Show winning debut in 2014 at FinovateEurope, Tink returned to the Finovate stage three years later to earn its second Best of Show award. Most recently, the Sweden-based company announced a partnership with German modern mobility sharing services provider Deutsche Bahn. The company will deploy Tink’s Account Check solution to enable instant, secure account onboarding.

Berlin’s N26 launches cryptocurrency product N26 Crypto

Crypto spring is alive and well in Europe as the region’s most prominent digital bank, N26, announced that its first cryptocurrency product, N26 Crypto, will be available to its customers in France. N26 began the year with the unveiling of its new Stock and ETF trading product – and the bank’s crypto solution already has been available in seven of N26’s 24 European markets. This week’s announcement adds French traders and investors to the ranks of those N26 customers who will be able to transact in nearly 200 cryptocurrencies on the N26 app.

N26 Crypto will be available to all eligible customers in France, or at least with a French or a German IBAN. All membership tiers will be able to access the technology, including customers using free accounts. There will be no additional charge for using N26 Crypto, which the bank says will offer the broadest range of cryptocurrencies for trading and investing compared to all other European banking apps.

“Last summer, we installed our local French Iban to be able to accelerate the deployment of the global banking offer that we want to provide to our approximately 3 million customers in France,” N26 General Manager France & Benelux, Jérémie Rosselli explained. “With this, customers can go beyond managing their money simply and intuitively on their smartphone to also invest within the N26 ecosystem,” Rosselli said.

The new offering is made possible via a partnership with Bitpanda GmbH, which manages the execution of trades as well as the custody of coins. With only €1 to get started, N26 Crypto users pay 1.5% in fees on Bitcoin and 2.5% on other cryptocurrencies. Users can upgrade to N26 Metal to take advantage of reduced transaction fees, as well as other perks.

Founded in 2013 by Valentin Stalf and Maximilian Tayenthal, N26 has eight million customers and operates in 24 different markets. The bank’s crypto product announcement follows a slew of recent headlines from the German bank. These include the launch of its Instant Savings solution in 13 new markets, and the appointment of Mayur Kamat as new Chief Product Officer.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

  • German challenger bank N26 launched new cryptocurrency trading product N26 Crypto.
  • Flowpay, a Czech-based fintech that provides financing for small businesses, raised $2.3 million (€2.1 million) in seed funding.
  • German embedded finance platform Solaris raised $103 million (€96 million) in a Series F round led by SBI Group.

Middle East and Northern Africa

  • Israel-based BioCatch and Google Cloud partner to bring fraud prevention solutions to expanding markets.
  • UAE-based Tungsten secured a license from the FSRA to operate at the Abu Dhabi Global Market (ADGM).
  • Bahrain’s Eazy Financial Services joined forces with Tabby to provide BNPL services via its EazyPay POS terminals network.

Central and Southern Asia

  • Business Recorder’s Syed Yousuf Raza looked at how Pakistan’s banking and fintech industry is dealing with evolving fraud threats.
  • The Indian government signed a $23 million loan agreement with the Asian Development Bank (ADB) to enhance access to fintech education, research, and innovation at the Gujarat International Finance Tec-City.
  • FinTech Alliance Nepal joined the Asia FinTech Alliance.

Latin America and the Caribbean

  • Colombian fintech Addi secured $86 million in a combination of equity and debt financing.
  • Uruguayan digital payments firm dLocal anticipates record total payment volumes in 2024.
  • Nubank Brazil CEO Livia Chanes talked with Bloomberg News about the state of fintech in Latin America.

Asia-Pacific

  • Singapore-based cross-border payments company Thunes expanded its strategic partnership with Visa.
  • Australia’s HeirWealth integrated with Envestnet | Yodlee to bring open banking data sharing to its wealth register for high net-worth families.
  • HSBC and the Hong Kong Science and Technology Parks startup hub announced the first “public-private cooperation between the city’s largest innovation and technology ecosystem and leading global bank.”

Sub-Saharan Africa

  • Ethiopia’s Cooperative Bank of Oromia partnered with Temenos to launch its CoopApp and CoopApp Aluhuda for both conventional and Islamic digital banking experiences.
  • dLocal teamed up with Ebury to bring African customers optimized payment solutions.
  • Safaricom, a telecom based in Kenya, partnered with Onafriq to offer remittance services to Ethiopia.

Photo by Kai Pilger

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Hearing from Women Leaders in Fintech

Hearing from Women Leaders in Fintech
By Julie Muhn (@julieschicktanz) Posted on
Categories: Streamly, Women in Fintech

We had the privilege of sitting down and interviewing three remarkable women leaders in the fintech industry last month. As we bid farewell to Women’s History Month, we are thrilled to share the wealth of knowledge and experience they shared with us.

In our interview videos below, you’ll hear from Nadia Edwards-Dashti, Co-Founder at Harrington Star Group; Jen Godderidge, CEO & Founder at ATMO Technologies; and Chantal Swainston, Founder at The Heard.

These leaders delve into a variety of topics including personal and professional development, strategies for retaining female talent, the importance of empowering women in fintech, driving meaningful change within organizations, the role of coaching and mentoring, and the vital aspects of diversity and inclusion in the workplace.

Photo by Sound On

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ANNA Acquires Australian Business Spend Management Platform GetCape

ANNA Acquires Australian Business Spend Management Platform GetCape
By David Penn Posted on
Categories: Alumni News, ANNA, Daily news, Mergers & Acquisitions
  • Business banking account ANNA has acquired enterprise spend management platform GetCape. Terms were not disclosed.
  • The acquisition is ANNA’s first and marks the U.K.-based fintech’s entry into the Australian market.
  • ANNA made its Finovate debut at FinovateEurope 2020 in Berlin, Germany.

Business banking account ANNA has acquired GetCape, a business spend management platform based in Sydney, Australia. Terms of the transaction were not disclosed. The acquisition, ANNA’s first, will further the company’s goal of creating a new SaaS category that competes with Australia’s “Big Four” banks for market share in the expense management and corporate card business.

“This acquisition is a monumental step in our journey and we’re so excited to be joining Australia’s dynamic startup landscape,” ANNA co-CEO Eduard Panteleev said. “Entering the Australian market with GetCape at our side empowers us to bring our award-winning financial services to Australia’s vibrant business community and help them to thrive.”

Awarded “Most Innovative Expense Management Software Developer” at the Wealth & Finance 2023 Global Fintech Awards, GetCape is an Australian business spend management platform that issues corporate cards to help businesses better manage their cash flow. GetCape’s technology gives companies complete visibility and control over business purchases, enabling them to spot and eliminate wasteful spending and become more efficient in their spend management.

Ryan Edwards-Pritchard, who founded GetCape in 2020 and will serve in the new role of CEO of ANNA Money Australia, called the acquisition a “huge step forward.” He noted, “integrating our software IP with their trusted platform means we can create the ultimate B2B payments solution. This will all be delivered via a best-in-class ChatGPT-style AI assistant that provides business owners with the power of a finance team in the palm of their hand, just without the unnecessary headcount.”

Headquartered in the U.K., ANNA made its Finovate debut at FinovateEurope 2020 in Berlin, Germany. At the conference, the company demoed its Automated Tax Calculation solution which sorts self-assessment and VAT returns, automatically categorizing and reconciling expenses, and calculating VAT and tax in real time. The app also completes and submits tax and VAT returns to HMRC (HM Revenue & Customs) with support from a certified accountant.

In addition to its newly-announced partnership with GetCape, ANNA also recently teamed up with embedded finance and payment solutions provider Sonovate. In February, ANNA unveiled its new expense card which provides perks such as low-cost travel and improved cashback offers.

Photo by Nathan Cowley

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Tales from the Crypto: Base Backup, Blockchain Payments Secure Funding, Crypto-Friendly Alums

Tales from the Crypto: Base Backup, Blockchain Payments Secure Funding, Crypto-Friendly Alums
By David Penn Posted on
Categories: Alumni News, Cryptocurrency, Daily news

This week in Tales from the Crypto we look at the boom-induced traffic jam in crypto coin trading, new funding for a blockchain payment network in the developing world, and a pair of new crypto-friendly alums that demoed at FinovateEurope last month.

Base Backup as Bitcoin Booms

The renewed boom in bitcoin is not without its discontents. A spike in network activity on Coinbase’s layer-2 blockchain Base has resulted in service disruptions ranging from transaction fee increases leading to “stuck” transactions to the inability to cancel transactions.

Why does this matter? For crypto traders and investors, Base – launched in August 2023 – offers a way to transact on Ethereum at a lower cost, among other attractive features. But even more critically, the third largest layer-2 network on Ethereum has also seen its transaction volume surge by 3x over the past few weeks due something called “Base season.” This occurs as crypto influencers and traders promote a variety of Base tokens to their followers.

Most of these tokens are meme coins, but the volumes have been significant enough to serve as “stress tests” for a number of these systems – and for their users who have complained of transaction fees 5x normal levels. It should be pointed out that Base has not been the only network to have felt the impact of rising trading volumes for all forms of crypto – including the current meme coin mania. Layer-1 blockchain Solana has experienced service issues as well.

The traffic tie-ups are likely to be temporary, the company noted. It also encouraged users cancel and resubmit transactions where possible and to wait for the traffic to subside if cancellation was not possible. Most importantly, Coinbase assured customers that their funds are safe. There’s a saying that if you are sitting in your car complaining about traffic, it is worth remembering that you, too, are traffic. A new round of cryptocurrency traders and investors is learning that lesson as crypto winter turns toward crypto spring.

In other Coinbase news, the company announced the launch of its Prime Sweeper solution this week. Prime Sweeper is a reference app that automates digital asset transfer between trading balances and vault wallets in Coinbase Prime. The no-code solution is designed for institutional clients and provides robust logging and status updates at every stage of the transfer process.

African blockchain payment network raises seed funding

In an oversubscribed seed funding round, African blockchain payment network Zone has secured $8.5 million. VC firms Flourish Ventures and TLcom Capital led the investment. Other firms participating in the fundraising were blockchain-focused outfits Digital Currency Group, Verod-Kepple Africa Ventures, and Alter Global.

Zone is the first regulated blockchain network for payments in Africa. The company has already signed agreements with 15 of the largest banks and fintechs on the continent, and Zone CEO and co-founder Obi Emetarom said that funding will fuel expansion of the company’s network domestically. Zone will also leverage the new capital to support a cross-border payments pilot program scheduled for 2025.

“As we step into this new phase at Zone, we are re-energized and our commitment to transforming Africa’s payment infrastructure is renewed,” Emetarom said. He praised the firm’s new and existing investors not only for their financial support, but also for their “deep expertise.” Flourish Ventures, for example, will bring both a global perspective as well as a network of industry influencers and Africa fintech expertise to help Zone reach new markets. For its part, TLcom Capital will provide “essential local credibility” and an “understanding of the African tech space.”

Founded in 2022, Zone is headquartered in Lagos, Nigeria.

FinovateEurope: Bringing Compliance to Crypto and Web3 Gamification

FinovateEurope last month showcased two companies, FRNZX (pronounced “forensics”) and Tradelite Solutions, that are innovating in the crypto space.

Headquartered in Tel Aviv, Israel and founded by experts in cryptocurrencies, AML, and intelligence, FRNZX offers a way to achive AML compliance in cryptocurrency transactions. The company offers a holistic AML navigator that makes it easier to integrate cryptocurrency transactions into the bank’s existing AML framework. At FinovateEurope, FRNZX co-founder and CEO Nevo Lapidot demonstrated how the technology streamlines AML operations from onboarding to monitoring, reporting suspicious activity and helping ensure that financial institutions meet regulatory requirements. FRNZX was founded in 2022.

The other crypto-friendly demoing company from FinovateEurope this year was Tradelite Solutions. Dedicated to promoting financial inclusion, Tradelite Solutions offers a web3 financial education game called Mogaland. In addition to gamification, Mogaland leverages a token economy and data-driven financial behavioral IDs in order to make financial literacy accessible, enjoyable, and – courtesy of web3 – monetizable for all, as well. Founded in 2020 by Tracy Chang (CEO) and Matthias Kröner (CFO), Tradelite Solutions is headquartered in Munich, Germany.

ARK Invest’s Cathie Wood on Crypto in 2024

One of the biggest defenders of cryptocurrencies in mainstream finance is ARK Invest CEO and CIO Cathie Wood. In addition to her advocacy for emergent and disruptive technologies, Wood has also advocated on behalf of cryptocurrencies. Just six months ago, she explained why she believed that bitcoin is the currency for AI.

Above is a more recent interview with Cathie Wood, conducted by Schwab Network’s Oliver Renick. In this conversation, Wood discusses recent price gains for Bitcoin, the debut of spot Bitcoin ETFs, and more.

Figure Technologies launches crypto exchange

An “everything marketplace”? A sole platform where traders and investors can buy and sell a variety of blockchain-native assets including cryptocurrencies, alternative investments, and stocks? Figure Technologies is on it.

This week, the San Francisco, California-based company announced the launch of Figure Markets. The new entity will introduce a new decentralized custody crypto exchange and blockchain-native security marketplace. Importantly, the marketplace will incorporate Multi-Party Computation (MPC) technology. The use of MPC-based wallets, the company noted in a statement, will help avoid the single-point-of-failure risks common to centralized exchanges. MPC wallets use private keys that are distributed across a decentralized network and must be multi-party approved for each movement.

Figure Markets also announced raising more than $60 million in Series A funding. Jump Crypto, Pantera Capital, and Lightspeed Faction led the oversubscribed round. Distributed Global, Ribbit Capital, CMT Digital, among others, also participated.

“This funding validates our vision to redefine capital markets with blockchain technology,” Figure Markets CEO Mike Cagney said. “Figure Technologies is capturing real benefits by employing blockchain in its lending and capital markets operations. Our goal is to extend the benefits of blockchain to a broader range of assets – including crypto and securities. It’s ironic that the largest crypto exchanges aren’t on blockchain – we aim to change that.”

Photo by fabio on Unsplash

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BioCatch and Google Cloud Bring Fraud Prevention Solutions to Expanding Markets

BioCatch and Google Cloud Bring Fraud Prevention Solutions to Expanding Markets
By David Penn Posted on
Categories: Alumni News, BioCatch, Daily news, Google Cloud Platform
  • Digital fraud detection innovator BioCatch has forged a partnership with Google Cloud.
  • The two companies will leverage their new relationship to bring fraud prevention solutions to expanding markets, starting in Southeast Asia.
  • Israel-based BioCatch made its Finovate debut at FinovateFall in 2014.

A new partnership between financial crime prevention specialist BioCatch and Google Cloud will help extend fraud prevention solutions into emerging markets, starting with markets in Southeast Asia. The move comes in the wake of a report from the digital fraud detection innovator that noted rapidly growing incidents of financial cybercrime in the APAC region. BioCatch’s 2023 APAC Digital Banking Fraud Trends Report underscored one threat in particular: authorized push payment (APP) attacks – which the report noted accounted for 54% of all confirmed fraud cases.

APP fraud occurs when a fraudster fools a victim into transferring money to an account controlled by the fraudster. Social engineering-based fraud such as APP has grown in recent years. This is due to both the rise in popularity of peer-to-peer payment networks, as well as successful efforts to defeat previously dominant forms of fraud such as remote takeover of victim devices.

“The APAC market has seen a massive rise in advanced financial cybercrime, with criminals adopting sophisticated social engineering tactics that have proved difficult to foil in real-time with legacy security controls,” BioCatch’s head of the APAC market Richard Booth explained. “Pre-crime logistics visibility and criminal network intelligence are vital to combatting these threats.”

BioCatch helps companies deal with this shifting landscape of digital fraud threats. The company leverages behavioral biometric intelligence and machine learning to deliver real-time threat detection and prevention. Its signature solution, BioCatch Connect, offers integrated digital fraud, AML, and impersonation detection to help banks and financial services companies detect and identify both traditional and emerging fraud threats.

BioCatch Connect works on three levels. First, the solution’s fraud telemetry collection includes thousands of app, behavioral, device, network, and transactional signals from more than eight billion individual user sessions. Second, continuous behavioral sequencing applies advanced cognitive behavioral science, data modeling, and deep learning algorithms to analyze and score data from the solution’s fraud telemetry collection. Third, BioCatch Connect leverages predictive intelligence using AI models to validate user motivation and identify the risk of potentially fraudulent activity.

Headquartered in Israel, BioCatch made its Finovate debut at FinovateFall in 2014. In the years since, the company has grown into a leader in digital fraud detection and a pioneer in applying behavioral biometric intelligence, cognitive science, and machine learning to the challenge of fighting financial crime. More than 30 of the world’s biggest 100 banks and 180+ of the biggest 500 banks use BioCatch’s technology to manage fraud risks, facilitate digital transformation, and better engage their customers. Gadi Mazor is CEO.

Photo by Haley Black

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Galileo Launches Post-Purchase Installment Payment Offering

Galileo Launches Post-Purchase Installment Payment Offering
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Galileo has expanded its BNPL tool to allow banks and fintechs to offer cardholders post-purchase installment payment options.
  • The new feature works with firms’ existing debit and credit programs and allows consumers to select up to five historical transactions to move into a BNPL payment plan.
  • Galileo’s new offering is similar to U.K.-based Curve’s Flex feature that allows customers to move transactions into a installment repayment plans.

Payment processing platform Galileo announced it is expanding its Buy Now, Pay Later (BNPL) offering. The SoFi-owned company launched an API for its bank and fintech clients that will enable them to offer their cardholders post-purchase installment payment options.

The post-purchase repayment options, which work with firms’ existing debit and credit programs, allow consumers to select up to five historical transactions to move into a BNPL payment plan. Once the customer has selected the purchase or purchases they want to move to a BNPL plan, the bank or fintech presents them an offer, along with the terms of agreement. If the customer accepts the terms, Galileo validates that the transactions are settled and not tied to any existing installment loans, and creates the loan for the total transactions.

The post-purchase BNPL plans work differently for purchases made with a debit card than they do with a credit card. For transactions made with a debit card, the bank or fintech disburses the funds to the customer’s Galileo DDA or an external account. And with credit transactions, the payoff amount is shifted to the customer’s credit card payment due date in the agreed upon installments.

“This new offering bridges the gap between cards and loans and allows banks and fintechs to establish and deepen customer relationships with innovative, flexible financing options for both credit and debit customers,” said Galileo Chief Product Officer David Feuer. “By expanding pay over time opportunities, post-purchase financing is ushering in a new era of responsible lending.”

Galileo expects the new offering will help banks and fintechs differentiate themselves in a crowded marketplace, drive revenue through installment fees, and serve as a jumping off point for firms to enter into the lending space.

This isn’t the first time the fintech world has seen post-purchase BNPL. Curve, a U.K.-based fintech, offers a direct-to-consumer credit card with a feature called Flex that allows customers to select transactions they’ve made in the past year and move them into an installment repayment plan. Curve launched its credit card in the U.S. in 2022, but has since paused new accounts in the region.

Galileo was founded in 2001 as a payment processing platform that allows third party fintechs and businesses to build and scale their own financial services offerings. The company was acquired by SoFi in 2020 in a $1.2 billion deal. Earlier this month, Galileo inked a partnership with The Bancorp Bank to offer real-time payments.

Photo by Kindel Media

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FIS Teams Up with Stratyfy to Limit Card Fraud

FIS Teams Up with Stratyfy to Limit Card Fraud
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, FIS, Stratyfy

Payment, banking, and investment systems provider FIS announced today that it is partnering with Stratyfy to bolster the capabilities of its SecurLOCK card fraud management solution.

After testing the new SecurLOCK capabilities with customers, FIS anticipates that the updated tool will increase accurately identified card transactions and help prevent fraud. This will reduce friction for end consumers by minimizing fraud and disruption experienced because of false positives.

“With sophisticated fraudsters using new technologies to increase fraud attacks, both businesses and consumers are facing more risk than ever before,” said FIS Head of Fraud Services Eric Kraus. “This new collaboration is a continuation of a commitment to implement new technologies, helping businesses prevent fraudulent behavior to protect the consumers they serve.”

Founded in 2017, Stratyfy provides predictive analytics and decision management solutions for financial institutions. The company demoed one of its solutions, UnBias, at FinovateFall 2022, and won a Best of Show award for its presentation. Among the company’s other solutions are Credit Risk Assessment and Fraud Detection. Stratyfy is one of 80 graduates of FIS’ Fintech Accelerator, having completed the 12-week program in 2020.

“It’s rewarding to see how our unique machine learning approach can enable better outcomes through this solution,” said Stratyfy CEO, and co-founder Laura Kornhauser. “Our relationship with FIS showcases the tremendous value that is possible through partnerships, and we’re thrilled to continue to build upon this important work.”

Banking technology company FIS was founded in 1968, and has a current market capitalization of $40 billion. Earlier this year, the Florida-based company acquired post-trade SaaS platform Torstone Technology to enhance its own capital markets offering. According to Crunchbase, the purchase marks FIS’ 26th acquisition.

Photo by RDNE Stock project

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M1 Finance Receives FINRA Fine for Misleading Social Posts

M1 Finance Receives FINRA Fine for Misleading Social Posts
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, M1 Finance
  • M1 Finance received an $850,000 fine from FINRA.
  • FINRA stated that around 1,700 influencers posted content, some of which was unfair and contained exaggerated, unwarranted, promissory, or misleading claims.
  • The offending posts occurred because M1 Finance did not review or approve the influencers’ content before they posted it.

Investing and banking tools fintech M1 Finance has been hit with a fee this week. FINRA, a U.S. regulatory body overseeing securities law, fined M1 $850,000.

FINRA said it imposed the fine because social media influencers acting on M1’s behalf posted content that FINRA deemed as unfair and containing exaggerated, unwarranted, promissory, or misleading claims. Some of the posts violated FINRA Rules 2210 (Communications with the Public) and 2010 (Standards of Commercial Honor and Principles of Trade). For example, an influencer advertising M1 Finance’s margin lending program said that customers could “pay [margin loans] back at any given time . . .  there is no set time period,” when, in fact, M1 can increase the maintenance margin requirement on customer accounts at any time, force a sale of securities in their accounts, and choose which securities to sell, if a margin call occurs.

Between January 2020 and April 2023, around 1,700 influencers posted content that included a unique link to M1’s website where new customers could open and fund an M1 brokerage account. The company paid influencers a flat fee for every new account that was opened and funded. In the end, the influencer content resulted in more than 39,400 new accounts.

“As investors increasingly use social media to inform their financial decisions, FINRA’s rules on communicating with the public are especially critical,” said FINRA EVP and Head of Enforcement Bill St. Louis. “FINRA will continue to consider whether firms are using practices and maintaining supervisory systems that are reasonably designed to address the risks related to social media influencer programs.”

While hindsight is 20/20, it is clear that increased supervision over the influencer posts and a system of procedures for control would have prevented the fine. While M1 Finance provided influencers with a guide that described the company’s services and features, the company did not review or approve the content within the influencers’ posts. This lack of oversight violated more FINRA Rules, including 2210, 2010, and 3110 (Supervision) and 4511 (General Requirements-Books and Records). It also violated the Securities Exchange Act of 1934 and the Exchange Act Rules.

M1 has consented to FINRA’s findings and has agreed to certify that it has fixed the issues. Ultimately, the $850,000 fine only amounts to just over $20 per new account M1 received as a result of the influencer posts.

Using social media influencers can be a powerful marketing tool, but it comes with risks, as demonstrated by FINRA’s recent fine against M1 Finance. Financial services firms must use caution when using influencers to promote their products, and employ supervisory efforts to ensure that all content is compliant with regulatory standards. This also serves as a reminder that whenever firms leverage third-party services, such as banking-as-a-service providers, there are additional risk factors that firms must carefully manage. When selecting a third party provider, firms should thoroughly evaluate their partners and implement oversight and compliance processes to mitigate potential risks.

Photo by Ivan Samkov

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Data Intelligence Innovator Curinos and Lender Price Forge New Strategic Partnership

Data Intelligence Innovator Curinos and Lender Price Forge New Strategic Partnership
By David Penn Posted on
Categories: Alumni News, Curinos, Daily news
  • Data intelligence business Curinos and mortgage pricing technology provider Lender Price announced a new partnership this week.
  • The partnership will integrate Curinos’ LendersBenchmark Analyzer and pricing analytics into Lender Price’s Enterprise Pricing Engine.
  • Curinos made its Finovate debut last year at FinovateSpring 2023 in San Francisco.

Data intelligence business Curinos and mortgage pricing technology provider Lender Price have announced a strategic partnership this week. Per the agreement, Lender Price will incorporate Curinos’ LendersBenchmark Analyzer solution and pricing analytics into its Enterprise Pricing Engine. This will enable Lender Price to offer actionable insights to mortgage lenders that will positively impact margin management and help them gain market share.

Lender Price CEO Dawar Alimi underscored the competitive challenges of the modern mortgage environment, an environment characterized by, among other things, elevated interest rates. “Partnering with Curinos, known for their intelligent technology, enables lenders to assess their competitive stance accurately and make profitable, data-driven decisions,” Alimi said. “This collaboration will assist lenders in managing their margins effectively, ensuring not a single basis point is overlooked.”

The integration will make it easier for community banks, credit unions, and mortgage lenders to give borrowers accurate rate information and superior pricing. During times of uncertain interest rates, growing competition among lenders, and a shortage of homes, solutions that help financial institutions manage their margins can be crucial. These solutions not only boost business but also attract and retain customers, leading to positive and profitable relationships.

“In today’s landscape, lenders’ focus should be on optimizing margins by using granular pricing strategies,” Curinos Director of Real Estate Lending Rich Martin said. “We’re delighted to secure this partnership with Lender Price, enabling its customers to more effectively price products through use of our data and analytics.”

Founded in 2021, Curinos was born out of the merger of Novantas and Informa’s FBX business. The goal was to bring the two entities’ combined expertise and innovation to deposits, lending, and digital experiences in financial services writ large. Headquartered in New York, the company made its Finovate debut last year at FinovateSpring in San Francisco, California. At the conference, Curinos demoed its Amplero Personalization Optimizer, a solution designed to facilitate high-impact banking use cases. The solution leverages machine learning and patented marketing automation to empower teams to deliver hyper-personalized, omnichannel, digital experiences in minutes rather than months. The company notes that the Amplero Personalization Optimizer has enabled marketing teams to realize thousands of incremental dollars in customer lifetime value.

Curinos’ partnership news with LenderPrice comes just days after Curinos announced that Achieva Credit Union will be the first customer for its Deposit Optimizer Essentials system. This technology helps credit unions and community banks manage member and customer deposits more efficiently by leveraging state of the art analytics to reach funding targets.

Specifically, Curinos’ Deposit Optimizer Essentials gives early warning indicators and alerts to help community banks and credit unions secure higher deposit growth at lower marginal costs by enabling them to diagnose deposit performance and optimize product strategies and pricing levels. “As rates shift, we needed a robust, easy-to-navigate solution, enabling us to react quickly and efficiently to changing market conditions,” Achieva Product Development Manager Veronica Schornheuser said.

Interested in demoing at FinovateSpring in San Francisco in May? We are happy to read applications from innovative companies with new solutions that are ready to show. Visit our FinovateSpring hub today to learn more.

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The Best Things in Life are Free: Watch All 35 Demo Videos from FinovateEurope

The Best Things in Life are Free: Watch All 35 Demo Videos from FinovateEurope
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateEurope 2024

Regardless of whether or not you were in attendance at FinovateEurope in London last month, you can now watch videos of all 35 demos from the show for free.

Each of the 35 videos are around seven minutes long, which means we have more than four hours of fresh fintech content available. To offer you an easy place to start, we’ve highlighted the demo videos of the three companies that won Best of Show. Enjoy!

Corsound AI

See Corsound AI’s profile page on Finovate.com.

Tuum

See Tuum’s profile page on Finovate.com.

Zeed

See Zeed’s profile page on Finovate.com

Photo by Denise Jans on Unsplash

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nCino Inks Agreement to Acquire DocFox

nCino Inks Agreement to Acquire DocFox
By David Penn Posted on
Categories: Alumni News, Daily news, DocFox, Mergers & Acquisitions, nCino
  • Cloud banking company nCino has agreed to acquire automated onboarding specialist DocFox. Terms were not disclosed.
  • DocFox’s technology will add advanced document analysis to nCino’s platform, accelerating the onboarding process for nCino’s FI clients.
  • DocFox made its Finovate debut at FinovateAfrica 2018. nCino has been a Finovate alum since its appearance at FinovateEurope in 2017.

Cloud banking innovator nCino has inked an agreement to acquire fellow Finovate alum DocFox. Miami, Florida-based DocFox specializes in providing automated onboarding solutions for both commercial and business banking. Terms of the transaction were not immediately available. The acquisition is expected to close in March of this year.

The integration of DocFox’s technology will enable nCino’s financial institution clients to manage the entire customer lifecycle – from information intake and document collection to due diligence – on a single platform. Relying on rules set by company compliance teams, DocFox analyzes any document for any financial institution, regardless of size, to automate the process of opening business accounts. DocFox gives business customers an account opening experience that is fast and intuitive. Internal teams benefit from configurable workflows to help them review information more efficiently.

“The acquisition of DocFox extends our existing functionality and will deliver a modern experience to an area of commercial and business banking that has lagged in innovation due to its complexity,” nCino CEO and Chairman of the Board Pierre Naudé. “We are excited to further extend our single platform vision and look forward to delivering this differentiating solution to financial institutions seeking to optimize onboarding and account opening processes.”

Making its Finovate debut at our fintech conference in Cape Town, FinovateAfrica 2018, DocFox last demoed its technology at FinovateSpring 2022 in San Francisco. The company has more than 450 customers on three continents, most recently partnering with Pennsylvania-based Customers Bank, a super-community bank with more than $20 billion in assets. DocFox also announced late last year that its account opening solution was now part of Fiserv’s AppMarket. CEO Ryan Canin co-founded DocFox in 2016.

“Our leading onboarding and account opening solution will complement and extend nCino’s single platform to create even greater value for financial institutions seeking to automate and digitize experiences they provide to employees and clients,” Canin said.

Wilmington, North Carolina-based nCino made its Finovate debut at FinovateEurope 2017. Founded in 2012, nCino today has more than 1,800 financial institution partners who leverage its SaaS platform to serve corporate, commercial, small business, consumer, and mortgage customers. nCino’s acquisition news follows a handful of partnership announcements including its partnership extension announcement with Vermont-based The Bank of Bennington, and new collaborations with Australia’s Summerland Bank and Japan’s The Saikyo Bank.

Photo by Pixabay

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GoCardless to Acquire Account-to-Account Payments Fintech Nuapay

GoCardless to Acquire Account-to-Account Payments Fintech Nuapay
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions
  • GoCardless has agreed to acquire Nuapay for an undisclosed amount.
  • GoCardless anticipates the move will expand its availability, as well as help it launch new products for additional verticals, including payroll, financial services, utilities, insurance, gaming, and gambling.
  • The agreement has not been finalized and is currently subject to regulatory approvals.

Bank-to-bank payments company GoCardless announced it has agreed to acquire Nuapay. The financial terms of the agreement, which is subject to regulatory approvals, have not been disclosed.

The Nuapay brand is owned by EML Payments, which was founded in 2003 and headquartered in Australia, where it trades on the New York Stock Exchange under the ticker EML. EML Payments acquired Nuapay in 2021 for an undisclosed amount. Nuapay itself was originally founded in 2017 and is headquartered in Ireland. The company launched to leverage open banking to power account-to-account payments. In addition to pay-by-bank services, Nuapay also offers credit transfers, direct debits, verified payouts, and more.

“How the world pays and gets paid is being transformed, with account-to-account payments and open banking playing the central role in that shift. Building on that shared vision, this acquisition will result in a combined organization with deep domestic and international payments and open banking expertise plus the scale to harness these opportunities for our clients and partners,” said Nuapay Co-founder and CEO Brian Hanrahan.

GoCardless anticipates that acquiring Nuapay will expand the availability and influence of GoCardless’ services through partners and intermediaries, including Independent Software Vendors (ISVs) and Payment Service Providers (PSPs). The company also expects the deal will strengthen GoCardless’ standing as a significant player in the payment industry, potentially increasing market share, enhancing its reputation, and improving its competitive advantage.

As for more concrete benefits, integrating Nuapay’s offering into GoCardless’ bank payment platform will help GoCardless launch new products for additional verticals. Some of the new use cases could include payroll, financial services, utilities, insurance, gaming, and gambling.

“Nuapay is an established account-to-account payment provider and open banking specialist with a blue chip customer base,” said GoCardless Co-founder and CEO Hiroki Takeuchi. “Its business is perfectly aligned to our growth strategy, and will accelerate our vision to become the world’s bank payment network.”

GoCardless, which describes itself as being “on the path to profitability,” has recently launched Embed, its white-label customer acquisition tool for PSPs, and has signed partner agreements with Plend, Bluefort, Moss, and others.

Photo by Karolina Grabowska

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