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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
In the northern hemisphere, springtime is just a few days away. And along with the melting of snow and blooming of flowers, we’ve also seen growth in a previously frozen area of fintech. That’s because there has been a resurgence of interest in digital and decentralized currencies, thanks to the escalating price of Bitcoin, which has seen record highs this week, topping out at over $73,800 yesterday.
There are two major driving factors behind Bitcoin’s surge: the recent launch of the Bitcoin ETF and the upcoming Bitcoin halving event that is expected to take place in April. The effect of these two events have transcended Bitcoin, however, and have not only had a positive impact on other digital currencies, but also on the traditional finance sector.
We recently had the opportunity to interview a few experts in the space to gain a better understanding of the current digital currency landscape. Check out the videos below to see Nordea’s Ville Sointu’s thoughts on the digital Euro, Finthropology’s Anette Broløs’ ideas on CBDCs and the challenges of replacing cash, and Coin Telegraph’s Jillian Godsil’s perception on what it will take to fully melt the previously frozen crypto sector.
This week’s edition of Finovate Global takes a look at recent fintech developments and news from Sweden. Over the years, Finovate has been proud to showcase a number of fintechs from Sweden, a country with a population of more than 10.5 million and the twelfth largest economy as measured by GDP.
Last month at FinovateEurope, we introduced Swedish embedded banking and payments company Visualizy to our audiences. Founded in 2022, the company offers a multi-bank platform that helps businesses lower costs, reduce errors, and boost security in their financial and payment operations.
Other recent Finovate alums headquartered in Sweden include StockRepublic (FinovateEurope 2023), Econans (FinovateEurope 2021), Minna Technologies (FinovateEurope 2019), and Trustly (FinovateEurope 2013. This week’s Finovate Global will include news from two older Finovate alums hailing from Sweden: Tink – which won Best of Show in its Finovate debut at FinovateEurope 2014 – and Klarna, a Finovate alum since 2012.
Klarna rolls out open banking-powered settlements in the U.K.
Swedish payments network and shopping assistant Klarnahas begun to introduce open banking-powered settlements in the U.K. This means that consumers in the U.K will be able to pay Klarna directly from their bank account rather than a debit card. It also means that the company is making good on its objective of building a payments network outside the traditional card networks.
“Open banking offers a huge opportunity for Klarna to reduce the cost of payments to society by cutting out the established card payment networks, and using up-to-date bank account data to make ever better lending decisions,” Klarna VP, Open Banking, Wilko Klaassen said. “This new launch builds on the success we have seen in 10 countries across Europe and will give U.K. open banking a major boost.”
Ease of use is one major advantage open banking settlements provide consumers. For example, there is no need to enter personal payment details into the website of retailer that the consumer might not know very well. Instead, all a consumer needs to do is click on the “Pay by bank” option. This delivers the consumer to their mobile banking app where they can complete their transaction quickly and securely.
Launching the service in the U.K. is expected to be a major boon for Klarna; approximately five million U.K. consumers currently use open banking payment each month. Outside of the U.K., Klarna’s “Pay by bank” solution is currently live in 10 countries. More than 20 million consumers each month are taking advantage of the technology.
Tink adds to U.K. leadership team
Speaking of open banking, Swedish open banking platform Tink announced this week that it is bolstering its leadership ranks. The company – which won Best of Show in its Finovate debut at FinovateEurope in 2014 – has appointed Ian Morrin as Head of Payments & Platforms, Andrew Boyajian as Head of Products for Payments & CX, and Jack Spiers as Banking and Lending Director.
Of the three new hires, Jack Spiers may ring a bell with Finovate audiences. Spiers was a recent speaker at FinovateEurope, where he provided a Special Address on “Transforming Lending in the Cost of Living Crisis.” In his presentation, Spiers – whose ten years of fintech experience include tenures at both Klarna and Clearpay – discussed how traditional methods are falling short in their ability to accurately assess creditworthiness. Instead, he pointed to new research from Tink that showed how data-enriched affordability checks can do better.
The new hires come just days after Tink announced a partnership with German railway company Deutsche Bahn. Via the new agreement, Tink will offer Deutsche Bahn customers optimized direct debit setups. This will enable customers to use Deutsche Bahn’s modern mobility-sharing systems, which are run by Deutsche Bahn subsidiary DB Connect. The railway company will also leverage Tink’s Account Check technology for its car-sharing and bike-sharing networks, Flinkster and Call a Bike.
Founded in 2012 and headquartered in Stockholm, Sweden, Tink most recently demoed its technology at FinovateEurope 2019. A two-time Finovate Best of Show winner, Tink was acquired by Visa in 2022 for $2 billion.
Swedish Central Bank looks to defend cash
If the Swedish Central Bank is for cash, then who can be against it?
That’s one of the questions the nation’s central bank is asking in the wake of 2023 survey that indicated that half of the survey’s respondents had run into circumstances in which they wanted to pay with cash, but merchant would not accept it. According to a report issued by Sweden’s Riksbank that is based on those results, this number was only 37% a year ago.
The report indicates that the supply of cash services in Sweden is decreasing and has been since at least 2016. Cash services refer to those locations for cash withdrawals, deposits of daily takings, as well as over-the-counter payments. This decline has slowed somewhat in the past five years, as new regulations have insisted that banks share the responsibility of providing cash services with other non-bank institutions. But the downward trend is clear.
“Payments must work for everyone, Riksbank governor and chairman of the executive board Erik Thedéen said in a press release. “In the longer term, all payments may be digital – but until then, cash plays an important role. We need legislation to ensure that cash can be used to pay. Banks must also ensure that more customers have access to payment accounts.”
To this end, in addition to calling for further research and study, the Swedish central bank proposed, for example, that banks should ensure that cash can be transferred to and from retail outlets at reasonable prices. At present, only one private company does this. Another proposal suggests that banks be obligated to accept banknote and coin deposits from private individuals. As noted above, there is not a current requirement for banks to do so.
These changes, along with others to help more individuals secure payment accounts, are likely to help Sweden increase financial inclusion as the country continues the rapid digitalization of its payment market. There will be no retreat from this drive for “faster, smoother, and more efficient payments.” But ensuring the availability and utility of cash, at least in the meantime, will both support that transition as well as ensure fewer Swedes are left behind on the way.
Here is our look at fintech innovation around the world.
Sub-Saharan Africa
U.K.-based fintech Unlimit secured a license from the Bank of Tanzania to do operate as a payments service provider (PSP) in the country.
African fintech PalmPay launched a pair of new products in Nigeria: Unlimited Free Transfer and Target Savings.
Mastercard and South African fintech SAVA teamed up to bring innovative payment options – including digital bank accounts and accounting integration tools – to small, medium, and micro enterprises (SMMEs).
Central and Eastern Europe
Berlin, Germany-based brokerage-as-a-service platform lemon.markets launched this week in partnership with Deutsche Bank, BNP Paribas, and Tradegate.
The Hungarian Ministry of the Economy has suggested new rules to codify the use of digital assets in the country.
German fintech Naro emerged from stealth this week with $3 million in pre-seed funding.
Middle East and Northern Africa
Israel-based fintech Nayaz shared its plans for expansion in Latin America following its acquisition of Brazil’s VMtecnologia.
Dunes Financial, headquartered in the UAE, agreed to acquire the technology assets of Be Mobile Africa.
The Financial Brand profiled former Bank Leumi CEO Rakefet Russak-Aminoach.
Central and Southern Asia
India’s UPI linked with Nepal’s largest payment network, Fonepay.
Writing in IBA.org, Sahar Iqbal assessed the current fintech landscape of Pakistan.
Courtesy of a partnership with Mastercard, India’s IndusInd Bank will launch an tokenizable wearable solution called Indus PayWear.
Latin America and the Caribbean
Aquis Technologies secured a contract to support the operation of the Central Bank of Colombia, Banco de la República.
Mexican challenger bank Fondeadora turned to MeaWallet for tokenization services.
Banco do Brasil teamed up with Giesecke+Devrient (G+D) to test offline payments for its CBDC project.
Asia-Pacific
Bank Muamalat Malaysia Berhad (Bank Muamalat) forged a multi-year collaboration with Google Cloud en route to its transformation into a digital Islamic bank.
Philippines-based Metropolitan Bank & Trust (Metrobank) partnered with Temenos to enhance its wealth management offerings.
Australian regulators are looking to regulate Buy Now Pay Later products under the nation’s Credit Act.
En route to FinovateEurope in London last month, a cab driver asked me what I did for a living. After giving it a few moments of thought (“fintech research analyst” doesn’t always cut it), I told him, “I get to meet interesting people and ask them interesting questions.”
This year at FinovateEurope, I had the opportunity to sit down with more than a baker’s dozen of fintech entrepreneurs, analysts, and authors to talk about some of the top trends in fintech and financial services. Here, as part of our Finovate Speaker Series, I’m looking forward to sharing these conversations with you over the next few weeks.
First up, in commemoration of International Women’s History Month, my interviews with Samantha Seaton, CEO of Moneyhub, and Anette Broløs, founder of Finthropology.
Samantha Seaton is CEO of open banking, open finance, and open data platform Moneyhub. The company’s technology helps transform data into personalized digital experiences and initiate payments. Seaton is also a Non-Executive Director at the Charities Aid Foundation Bank and at The Investing and Savings Alliance (TISA).
In our conversation, Seaton discusses the contemporary “obsession with personalization.” We also talk about the latest trends in financial services, the impact of AI, and what financial services can learn from other sectors when it comes to best leveraging new technologies.
How can the study of human cultures benefit banks? We posed this question to Dr. Anette Broløs, co-founder and Director of Finthropology.
For all the discussion of the power of data in financial services in recent years, Broløs believes that companies in this space have not yet done all they can do in order to take advantage of qualitative research that can help them become more customer-centric. As the co-author of the soon-to-be-released book, Customer-Centric Innovation in Finance, Broløs explains how methods common in anthropology can be effectively applied to financial services, potentially revealing insights that banks have been missing for years.
Payments technology company Icon Solutions has secured a strategic minority investment from NatWest. The amount of the investment was not disclosed.
The funding follows a December investment Icon Solutions secured from Citi Treasury and Trade Solutions (TTS).
NatWest integrated Icon Solutions’ Icon Payment Framework in September as part of its payments modernization strategy.
Payments technology company Icon Solutions has secured a strategic minority investment from NatWest. The amount of the investment was not immediately disclosed. The funding is the second for Icon Solutions in the past four months; the company announced in December that it had received an investment from Citi Treasury and Trade Solutions (TTS), a division of Citi’s Services organization. The amount of that investment was similarly undisclosed.
In both instances, Citi Treasury and Trade Solutions and NatWest have integrated or further integrated Icon Solutions’ Icon Payments Framework (IPF) as part of their investments. Citi TTS will expand its use of IPF to enhance its micro-services orchestration architecture. NatWest announced its plan to integrate IPF as part of its payments modernization efforts in September.
Icon Payments Framework is a low-code payment framework that enables business payments professionals to build payment workflows and empowers bank software engineering teams to create customizable integrations into their existing systems. Both NatWest and Citi TTS noted that the technology will help them build on current relationships as well as enhance their ability to keep pace with changes in payments technology.
“Overcoming vendor lock in and powering in-house builds with the Icon Payments Framework (IPF), NatWest can now drive change from within,” Icon Solutions co-founder and Director Tom Kelleher said. “Building new revenue streams, anticipating regulatory change, responding to market changes or competitive pressures. Today’s investment is much more than an investment, it’s a commitment to a future where payments are safe, immediate, and flexible.”
Icon Solutions made its Finovate debut at FinovateEurope 2017. In addition to its partnership announcements, the company in recent months secured “Qualified Software” status from Amazon Web Services (AWS). “Qualified Software” status is granted to technologies validated as meeting AWS cloud infrastructure’s performance, security, and reliability standards.
Icon Solutions also recently launched a FedNow scheme pack for IPF. This will help banks negotiate the balance between “near-term requirements like FedNow compliance and ISO2022” and their “longer-term strategies around driving innovation, improving CX and reducing costs,” Icon Solutions CTO Donal Fleming explained.
Tuum received a strategic investment from Citi Ventures in a Series B follow-on round.
The amount of today’s installment was undisclosed, and boosts the company’s total funds to more than $49 million (€45 million).
Citi Ventures plans to introduce Tuum to key stakeholders within Citibank and gauge interest in commercialization opportunities.
API-based core banking provider Tuumannounced today that it has secured additional funding as part of its Series B round. This strategic investment from Citi Ventures, the amount of which was undisclosed, brings the company’s total funding to over $49 million (€45 million).
Tuum, which won Best of Show honors at last month’s FinovateEurope event, received $27 million (€25 million) in funding at the start of February in a Series B round led by CommerzVentures. Tuum plans to use the funds to fuel product and market development and to expand its international presence into the DACH region, Southern Europe, and the Middle East.
As part of Citi Ventures’ role as strategic investor, the firm plans to introduce Tuum to key stakeholders within Citibank and gauge interest in commercialization opportunities.
“At Citi Ventures, we have been tracking the modernization of core banking tech stacks for years,” said the firm’s Managing Director responsible for fintech investments globally Luis Valdich. “After exploring numerous opportunities to invest in next-gen core banking providers, we are excited to invest in Tuum, whose API-first, cloud-agnostic and modular platform promises to strike an optimal balance between no-code hyper-configurability and total cost of ownership that can help accelerate this long overdue transformation across the industry.”
Estonia-based Tuum was launched under the name Modularbank in 2019. With 100 employees, the company aims to help banks replace their legacy systems, reduce spending on maintenance, and quickly adapt to changing trends. Tuum’s technology extends beyond core replacement to help banks add accounts, lending, payments, and card offerings. In addition, the company offers customers access to range of third-party tools through its partner marketplace, which includes solutions from AMLYZE, SaltEdge, NTT Data, Entersekt, and others .
Tuum’s clients come from a range of 10 countries, but primarily hail from the U.K. and the Nordic region. The company launched just in time to leverage the digital transformation frenzy that took place in 2020. Since that time, Tuum’s revenue has more than doubled each year on average over a three-year period, resulting in an overall revenue increase of more than 2.5 times.
The video of Tuum’s demo from FinovateEurope will be available in the coming days.
Taulia has partnered with Visa to embed Visa’s digital payments technology into its Virtual Cards offering.
Taulia will leverage Visa’s APIs to embed business’ virtual payment credentials, acceptance, and enablement solutions to work natively across SAP business applications.
Integrating Visa’s digital payments technology into Taulia’s Virtual Cards will simplify the business-to-business payments process, especially for organizations using SAP’s ERP solutions.
SAP-owned supply chain finance fintech Taulia has partnered with Visa this week to embed Visa’s digital payments technology into Taulia’s Virtual Cards offering.
The partnership will leverage Visa’s APIs to embed business’ virtual payment credentials, acceptance, and enablement solutions to work natively across SAP business applications. Embedding finance capabilities within SAP’s applications reinforce the bank’s role as an issuer and solidify the ERP relationship to the corporate client.
“By partnering with Taulia, we create synergies in working capital management and the enablement of a world class ERP provider,” said Visa SVP, Global Head of Large, Middle Market Segments and Working Capital SolutionsAlan Koenigsberg. “We believe that we are creating a best-in-class payments automation experience for buyers and suppliers alike, while removing cumbersome processes that take time away from the most strategic work that drives growth.”
The companies anticipate that the solution will help CFOs, procurement, and accounts payable teams automate payments to suppliers. This can be useful for businesses who pay one-time suppliers because it eliminates the need to create full master data in the system. Embedded virtual payments will also improve cash flow for businesses, offer enhanced payments visibility, and reduce friction in B2B transactions.
Overall, the partnership represents a step towards a more accessible digital payments ecosystem for businesses worldwide. Integrating Visa’s digital payments technology into Taulia’s Virtual Cards will simplify the business-to-business payments process, especially for corporate buyers and suppliers using SAP’s ERP solutions.
Taulia was founded in 2009 to help companies make use of cash tied up in their payables, receivables, and inventory. The company maintains a network of 3+ million businesses to fuel its clients with more working capital. In fact, Taulia has provided more than $250 billion in accelerated early payments to clients, including Airbus, AstraZeneca, and Nissan.
SAP acquired Taulia in 2022 for an undisclosed amount.
Verification provider Sumsub announced a partnership with blockchain data platform Chainalysis this week.
The integration will bring automated crypto transaction monitoring and secure data storage, as well as ensure regulatory compliance.
Sumsub made its Finovate debut at FinovateEurope 2020 in Berlin, Germany.
Full-cycle verification provider and FinovateEurope alum Sumsubannounced an integration with blockchain data platform Chainalysis this week. The partnership brings Sumsub’s Transaction Monitoring and Travel Rule solutions to the Chainalysis platform. This will enhance regulatory compliance and secure data storage, as well as provide automated crypto transaction monitoring for Chainalysis’ clients.
In a statement, the companies suggested that the partnership will help encourage greater digital compliance for businesses in the crypto space with functionality like unified workflows and automated transaction monitoring. Sumsub’s Transaction Monitoring solution is designed to help firms deal with the estimated $48+ billion in total fraud losses last year alone. The solution gives fraud and risk teams a single tool to manage the transaction monitoring process with provides fewer false positives and more efficient case management.
Additionally, the technology enables real-time fraud detection, and users can connect KYC, AML, and KYB verification with transaction monitoring for further vigilance against suspicious activity. With Travel Rule, Sumsub automates data transfers with counterparties to make sure firms remain compliant with regulatory obligations in different jurisdictions around the world.
“This partnership enables us to offer access to over one billion mapped addressses across multiple blockchains to those customers who use Sumsub’s Transaction Monitoring and Chainalysis crypto risk solutions,” Sumsub co-founder and Chief Innovation Officer Jacob Sever explained. “Sumsub’s solution’s enhanced capabilities, integrated with Chainalysis’ analytics and key management model, are reshaping the landscape of crypto compliance and security in the digital realm.”
Sumsub made its Finovate debut at FinovateEurope 2020 in Berlin, Germany. The company currently has more than 2,000 clients in fintech, crypto, e-commerce, transportation, gaming, and more. Businesses working with Sumsub have experienced 2.4x return on investment (ROI), $3.2+ million in net present value (NPV), and a payback period of less than six months.
So far in 2024, Sumsub has forged partnerships with B2B Gaming Services and embedded finance integrator AAZZUR. The company began the year teaming up with digital banking technology firm Plumery. In February, Sumsub launched its deepfake detection solution for video identification, an industry-first, and made its non-doc verification solution available in the U.S.
Headquartered in London, Sumsub – which stands for “Sum & Substance” – was founded in 2015. Co-founder Andrew Sever is CEO.
The EU Parliament approved the Artificial Intelligence (AI) Act today. Member states agreed upon the regulation in December 2023. Today, members of the European Parliament endorsed the act, with 523 voting in favor, 46 voting against, and 49 abstaining from the vote.
It’s no secret that AI is a double-edged sword. For every positive use case, there are multiple ways humans can use the technology for nefarious purposes. Regulation is generally effective in creating safeguards for the adoption of new technologies. However, delineating the boundaries of AI’s applications and capabilities is challenging. The technology’s vast potential makes it difficult to eliminate negative uses while accommodating positive ones.
Because of this, the European Union’s new Artificial Intelligence Act will have both positive and negative impacts on banks and fintechs. Organizations that learn to adapt and innovate within the boundaries will see the most success when it comes to leveraging AI.
That said here are four major implications the new law will have on banks:
Prohibited AI applications
The new law prohibits the use of AI for emotion recognition in the workplace and schools, social scoring, and predictive policing based solely on profiling. This will impact how banks and fintechs use AI for customer interactions, underwriting, and fraud detection.
Compliance and oversight
The ruling specifically calls out banking as an “essential private and public service” and categorizes it as a high-risk use of AI. Therefore, banks using AI systems must assess and reduce risks, maintain use logs, be transparent and accurate, and ensure human oversight. The law states that citizens have two major rights when it comes to the use of AI in their banking platforms. First, they must have the ability to submit complaints, and second, they have the right to receive explanations about decisions made using AI. This will require banks and fintechs to enhance their risk management and update their compliance processes to accommodate for AI-driven services.
Transparency
Banks using AI systems and models for general purposes must meet transparency requirements. This includes complying with EU copyright law and publishing detailed summaries of training content. The transparency reporting will not be one-size-fits-all. According to the European Parliament’s explanation, “The more powerful general purpose AI models that could pose systemic risks will face additional requirements, including performing model evaluations, assessing and mitigating systemic risks, and reporting on incidents.”
Innovation support
The law stipulates that regulatory sandboxes and real-world testing will be available at the national level to help businesses develop and train AI use before it goes live. This could benefit both fintechs and banks for support in testing and launching their new AI use cases.
Overall, the EU AI Act isn’t requiring anything outside of banks’ existing capabilities. Financial institutions already have processes, documentation procedures, and controls in place to comply with existing regulations. The act will, however, require banks and fintechs to either establish or reassess their AI strategies, ensure compliance with new regulations, and adapt to a more transparent and accountable AI ecosystem.
The Harbor Bank of Maryland has partnered with digital account onboarding specialist Prelim.
Courtesy of the partnership, the Baltimore, Maryland-based financial institution will leverage Prelim’s technology and expertise to enhance its account opening services.
Headquartered in San Francisco, California, Prelim made its Finovate debut at FinovateSpring 2022.
Digital account onboarding specialist Prelim and the Harbor Bank of Maryland have teamed up to bring digital account opening services to the customers of the Baltimore, Maryland-based financial institution.
Founded in 1982 with $2.1 million in assets, Harbor Bank of Maryland serves the Baltimore, Maryland metropolitan area with seven branch locations and a loan office in Silver Spring, Maryland. The bank offers a wide variety of banking services, including checking, savings, time deposits, credit and debit cards, and commercial real estate, as well as personal, home improvement, and other installment and term loans. With total assets of $377 million, Harbor Bank of Maryland is a designated Minority Depository Institution (MDI) and the first community bank in the U.S. to have an investment subsidiary, Harbor Financial Services.
San Francisco, California-based Prelim made its Finovate debut at FinovateSpring in 2022 and returned again the following year for FinovateSpring 2023. Co-founded in 2017 by Heang Chan (CEO) and Chris Blaser (CTO), Prelim offers a white-label platform that empowers banks to digitize their business banking operations. Via API, Prelim enables financial institutions to automate their business account onboarding, as well as connect to third party providers to meet AML, BSA, and CIP requirements. The platform also helps FIs launch other financial services and banking products from lending to merchant services.
In addition to its partnership with the Harbor Bank of Maryland, Prelim last month announced a collaboration with Movement Bank. Headquartered in Danville, Virginia, Movement Bank was launched in 1919 by a team of African American doctors, teachers, farmers, and preachers. From humble origins in a church basement and $6,500 in capital, the financial institution has grown into a major community resource. The bank was among the first to reopen during the Great Depression after banks were forced to close. The institution was also one of the first banks in Virginia to issue Federal Housing Administration (FHA) loans back in 1934. Movement Bank currently has $150 million in total assets.
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.
A pair of Canada-based Finovate alums – Coconut Software and PayTic – have earned spots in the first cohort of the UK Fintech CTA program. The program runs for eight-weeks, much of it conducted online, and includes a needs assessment and company analysis, participation in the Innovate Finance Global Summit, virtual market briefings, mentor-matching and coaching, as well as strategic business-to-business introductions.
In addition to the digital sessions, participants in the program will be invited to attend local events in the U.K. that will help the firms build and grow their in-market presence and their network. This will enable them to introduce their value proposition to key market participants, investors, as well as potential customers.
Joining Coconut Software and PayTic are a number of other Canadian startups including Symend, OneVest, VoPay, Four Eyes Financial, Octav, and Sibli.
“We are so excited to be selected for the first cohort of the UK Fintech CTA, proudly representing our country’s growing payments landscape as we expand our efforts in the U.K.,” PayTic noted on LinkedIn last week. “Thank you Canadian Technology Accelerators | Accélerateurs technologiques canadiens for this recognition and opportunity to scale!”
Headquartered in Charlottetown, Prince Edward Island, PayTic made its Finovate debut last year at FinovateSpring. The company offers a SaaS solution that manages all of the significant aspects of program management for card issuers and BIN sponsors in a single interface. PayTic’s technology serves as a central hub within the payments ecosystem, enabling users to automate reconciliation, network report generation, dispute submission, fraud detection, network fee analysis, and robust business intelligence.
At FinovateSpring, PayTic founder and CEO Imad Boumahdi and Director of Product Kate Firuz demoed how PayTic’s platform can help banks, card issuers, BIN sponsors, and fintechs save significant amounts of money by analyzing and optimizing network fees against program activity. The technology enables users to instantly reconcile data across the payments ecosystem from the program and account level to the transaction level. This empowers users to identify exceptions in real-time, generate accurate reports, and remain compliant.
Founded in 2020, PayTic has raised $4 million in funding. Visa Accelerator and Outlierz Ventures are among the firm’s investors.
More than 4,000 kilometers to the west via the Trans-Canada Highway (44 hours if you’re driving), Saskatoon, Saskatchewan-based Coconut Software is the other Finovate alum that will be joining PayTic as part of the UK Fintech CTA program. Founded in 2007, Coconut Software offers a customer engagement platform to help financial institutions better schedule, manage, and measure customer, prospect, and employee interactions.
Coconut Software made its Finovate debut as part of our special all-digital FinovateSpring conference in 2021. At the event, Senior Solutions Engineer Andre Doucette demoed enhancements to the firm’s appointment scheduling and lobby management technology. These upgrades improved the platform’s online queuing and lobby management capabilities.
Named to the 2023 Technology Fast 50, Coconut Software counts a number of North American financial institutions among its customers, including RBC, Arvest Bank, Vancity, and Rogue Credit Union. The company has raised more than $35 million in funding from investors including Klass Capital and Information Venture Partners. Katherine Regnier is founder and CEO.
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.
U.K.-based business banking platform Tide is expanding into Germany.
Tide didn’t release an exact timeline, but said that customers on its waitlist will be able to begin using a limited release of the company’s business banking tools “in the coming months.”
Germany is Tide’s second international market. The company launched in India in 2022.
Business banking platform Tide is expanding across international borders for the second time. The U.K.-based fintech announced today it will soon begin serving clients in Germany.
Tide did not offer an exact timeline for its expansion into Germany, but the wait list is currently open and the app will be available “in the coming months.” After Tide’s launch in Germany later this year, the company’s members will initially be limited to the app’s business account and card products. Access to Tide’s other features, including cash flow forecasting, will be rolled out in phases.
Among the reasons why Tide selected Germany as its next market is because large, traditional banks provide the bulk of services to small businesses in the region. Tide wanted to offer business owners a more simple, innovative platform to help them manage their business.
“Looking at what is on offer for SMEs in Germany, we believe there is a huge opportunity for Tide,” explained company CEO Oliver Prill. “Across all our markets, we continue to add to the services and products we offer to our members, as part of our mission to be the leading international financial platform for small businesses.”
Tide launched in 2015 to help small businesses save time and money on banking and administrative tasks. The business bank accounts offer accounting tools, expense cards, invoicing, payment collection capabilities, business loan comparisons, and cashflow insights. In 2022, Tide acquired lending marketplace Funding Options for an undisclosed amount. Tide currently counts more than 775,000 sole traders, freelancers, and limited companies as clients.
“Our success in the U.K. has been built on having a deep understanding of the pain points of small businesses, the self-employed and freelancers. Our goal is to help reduce the financial and administrative management burdens with our advanced business financial platform,” added Prill.
Today’s launch isn’t Tide’s first foray into international markets. The company expanded into India in 2022 and has since added more than 200,000 members in the region. Tide now employs 1,600 people in offices across India, Bulgaria, as well as its headquarters in London.
March 10th marked the one-year anniversary of the collapse of Silicon Valley Bank (SVB). While the event isn’t necessarily something to celebrate, it is a great time to reflect on what the industry has learned and how things have change.
Looking back on the aftermath of SVB’s liquidity crisis, we have seen shifts in behavior and strategy that are starting to reshape the landscape for both banks and fintechs. I had the privilege to speak with Law Helie, General Manager of Consumer Banking at nCino, to gain insights into these changes and how institutions are adapting to meet evolving consumer expectations and regulatory demands.
Finovate: We’re approaching the one-year anniversary of SVB’s liquidity crisis. In the past 12 months, how has the industry responded? Have you seen any changes in behavior from banks or fintechs?
Law Helie: Regardless of size, a consistent banking trend is the re-emphasis on building up deposits. After the liquidity crisis last year, banks became more risk-averse and leaned on their deposits as a shield against volatility.
Another trend is the shift to relationship banking via technology. Banks are leveraging cloud-based tools to unlock more data within their organization to better inform and tailor their services to customers for core offerings, including loans, CDs, high-yield savings and more. We expect intense competition around these services as banks prioritize opening multiple service streams with customers to deepen the relationship and hold onto deposits.
Finovate: How will banks approach their spend on fintech following the SVB crisis?
Helie: Expect banks’ spending on fintech tools to grow exponentially. This isn’t a new phenomenon, but the pace of acceleration since SVB is significant as banks seek ways to better compete in a crowded market.
Banks are deploying technology to help understand their cost of funds base, attract deposits, drive internal efficiencies and, most importantly, to help create a sense of stability. As we await more certainty from the Fed around economic forecasting, we expect to see an increase in tech spending, especially at a time when banks’ appetite for increasing efficiency continues to grow at a rapid pace.
Finovate: How about end consumers—both retail and commercial bank customers—have they changed their attitudes and behavior?
Helie: Post-SVB, end consumers in all lines of business are more aware and educated on deposit limit risks that come with over-exposure. Our FIs have told us that their customers are searching for ways to have more security, including wanting to know how they can limit their risk of exposure and how to structure their accounts for FDIC limits. In addition, some of our customers have incorporated the use of CDARS, a Certificate of Deposit Account Registry Service, that can help customers disperse funds into multiple accounts.
The overall attitude and behavior of end consumers is now that they need to pay attention to FDIC limits, disburse their deposits, and have an increased focus on their wealth management. This shift underscores a proactive approach among consumers toward safeguarding their financial assets.
Finovate: Given these behavioral and attitude shifts, how can banks and fintechs adapt to these changes?
Helie: Most banks have siloed systems, meaning there is no singular source of truth for their data. Yet customers don’t think this way – they look at their needs holistically. Serving these customers requires a client-centric model that is efficient and driven toward self-service.
And the more products a customer has with a bank, the stickier they are. In order to retain existing and new depository relationships, banks can best position themselves by providing a wide suite of banking offerings and services, in particular digital offerings.
Banks also have an opportunity to leverage fintechs to gather a 360-degree view of the customer, allowing them to understand what is going on across all accounts. With that information, banks can leverage relationship banking techniques to provide customers with the tailored products and services that they want and need.
Finovate: What impact has SVB’s liquidity crisis had on regulations so far and how are banks and fintechs responding?
Helie: Regulations have been put in place to try and mitigate the risk of another SVB collapse. Despite NYCB’s recent issues, we are not seeing the same level of concern spread to other financial institutions as it seems the public has a better understanding of the underlying reason for the issues NYCB is currently having.
Financial institutions are actively pursuing ways to strengthen their deposits bases by reviewing FDIC limits. Notably, some FIs have taken measures to impose restrictions on the maximum amount of cash that can be held in an account, aligning with the FDIC limit. Fintechs are helping FIs by not only providing the framework for streamlined experiences that help meet customer needs, but also allowing them to responsively acquire new funds for those customers looking to diversify their deposit base.
Finovate: Looking ahead, what advice do you have for banks and fintechs navigating the ever-competitive game of increasing deposits?
Helie: The market expects the Fed to reduce interest rates one-to-three times this year. Americans are waiting on the sidelines for better rates so that they can shop for refinancing or fresh loan opportunities.
Banks that are well-prepared have a tremendous opportunity to help people get a better handle on their finances and position themselves as a partner for life. Those that struggle to quickly evaluate inquiries or match competing offers could frustrate customers that want to take advantage of the improving environment.
Cloud-based tools that utilize data and AI to help banks evaluate a fresh loan or refinancing request quickly are at a tremendous advantage. Institutions that maintain the sleepier pace of the past year will be rapidly outpaced by their peers and they will have few opportunities to make up the gap.
