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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Have you listened to the latest episodes of the Finovate Podcast?
Over the past few weeks, Greg Palmer and the Finovate Podcast have hosted some of the most interesting innovators in fintech. Alan Bekker of eSelf on the future of AI in financial services, The Clearing House’s Jim Colassano on real-time payments, financial inclusion and wealth-building with Rodney Williams of SoLo Funds … these are just a handful of the interviews Greg Palmer and the Finovate Podcast have featured in recent weeks.
Don’t miss another conversation! Join Greg Palmer and his guests on the Finovate Podcast today!
Greg Palmer interviews Alan Bekker, co-founder and CEO of customer engagement innovator, eSelf. The two discuss the role of AI in fintech and financial services, and the future of face to “face” interactions. eSelf won Best of Show in its Finovate debut at FinovateFall 2023. Episode 208.
The rise of real-time payments, especially in the U.S., is creating opportunities and challenges for fintechs and financial services companies alike. Greg Palmer sits down with Jim Colassano, SVP of Product Development and Strategy with The Clearing House, to discuss what institutions need to do in order to take advantage of one of the latest innovations in payments. Episode 207.
Greg Palmer catches up with Jack Spiers, Sales Director at Tink, to discuss the findings of a new report from the Best of Show winning company that details how to enhance affordability assessments with enriched data. Episode 206.
Dr. Adam Lowe, Chief Product & Innovation Officer with CompoSecure, talks with Finovate Podcast host Greg Palmer on how to think about fraud prevention as an asset, and the importance of balancing security and customer experience. Episode 205.
As part of the Finovate Podcast’s commemoration of Black History Month, Greg Palmer and Rodney Williams, co-founder, chairman, and President of SoLo Funds, talked about the challenges of creating wealth-building products for underserved communities. Episode 204.
Last month at FinovateEurope, I had the pleasure of conducting interviews with 14 professionals, entrepreneurs, and authors from the world of fintech and financial services. A few days ago, I shared videos of my conversations with Moneyhub’s Samantha Seaton and Finthropology’s Anette Broløs.
Today, I’m unveiling another pair of interviews from FinovateEurope. First, I sit down with Edwin Van Bommel, Head of Strategy and Innovation with ABN AMRO Bank. In his role with the bank, van Bommel is responsible for introducing new products and services to clients in the areas of artificial intelligence and distributed ledger technology.
In our conversation, van Bommel and I talk about the different ways ABN AMRO Bank is leveraging enabling technologies like embedded banking, generative AI, and distributed ledger. We also talk about the challenge of legacy systems and why they will still “play an important role in the future” of financial services.
In our second video interview, Indrek Vainu, Head of Conversational AI at Zurich Insurance Group, and I talk about the challenge and opportunity of artificial intelligence in financial services. We discussed ways that generative AI, for example, is bringing innovation to both the front and back office. Vainu also shared what he believes are the next steps in AI adoption in fintech and financial services.
In his role as Head of Conversational AI at Zurich Insurance Company, Vainu leads activities globally that are related to Generative AI and chatbots. He co-founded AlphaChat, a chatbot startup that was acquired by Zurich Insurance Group in 2021.
Digital identity solutions provider Signicat has acquired fraud prevention firm SmartWorks. Terms of the transaction were not disclosed.
The acquisition expands Signicat’s presence and reach in Iceland, where SmartWorks is headquartered.
Signicat made its Finovate debut in 2017 at FinovateEurope.
Digital identity solutions provider Signicat announced its sixth strategic acquisition since 2019 this week. The Norway-based company has acquired fraud prevention innovator SmartWorks. Terms of the transaction were not disclosed.
Headquartered in Iceland, SmartWorks is the largest provider of e-signatures and anti-fraud solutions in the country. The company’s customers include Íslandsbanki, Brimborg, and the City of Reykjavik – where SmartWorks was founded in 2016.
“Electronic signatures are widely adopted and already a business standard in Iceland. However, trust services extend far beyond signatures with authentications, identity proofing, validations, trust orchestration and many other related services,” SmartWorks CEO and founder Olafur Pall Einarsson said. “This union puts us in the position to shape the future of digital identity in Iceland and to partner with all key stakeholders to define how the market will evolve.”
Signicat plans to leverage the acquisition to expand its presence in Iceland. The company is particularly eager to market its Dokobit by Signicat solution in the country. Secured via an acquisition in 2021, Dokobit provided cross-border signing capabilities and gave Signicat the ability to expand into the Baltic markets, including Lithuania where Dokobit was founded in 2008.
As part of this week’s acquisition, the entire SmartWorks team will join Signicat. SmartWorks’ Einarsson will continue on as Signicat Country Manager Iceland.
“We are highly enthusiastic about this acquisition as SmartWorks is the market leader in Iceland when it comes to fraud and digital identity,” Signicat CEO Asger Hattel said. “We can now further leverage SmartWorks’ expertise and resources to sell our portfolio of digital identity solutions across the Icelandic market.”
Norway-based Signicat has more than 13,000 customers in 44 countries, representing organizations in payments, digital wallets, and insurance, as well as in government entities. The company’s technology supports more than 130 data verification sources – including national eIDs – to identity both businesses and individuals. Signicat also enables companies to securely scan international identity documents using video-based verification for AML, KYC checks, and more.
Signicat finished 2023 topping the NOK 1 billion ($93 million) mark in revenue and more than one billion transactions. The transactions number represented a gain of more than 25% over 2022.
We’re starting off the week with a major acquisition in the U.K. lending space, as well as fintech funding news in payments, wealth management, and financial education.
Digital banking
Missouri-based Central Bank leveragesPersonetics’ AI-driven engagement platform to enhance financial wellness.
SaaS core modernization and transformation solution provider for banks Zafinunveils new tools – Dynamic Cohorts and Signals – to enhance customer personalization and engagement.
Digital banking experience platform Plumeryannounces availability on Google Cloud Marketplace.
Emporia State Federal Credit Union launches new app courtesy of a partnership with digital banking solution provider Bankjoy.
Bank integration provider AccessPaysecures $24 million in equity and debt financing.
Integrated payments company Bluefinadds 23 new devices, 6 new applications, and three new key injection facilities (KIFs) to its Encryption Management Services P2PE Component listing.
Germany payment management platform NX Technologiesraises $23.8 million (EUR 22 million) in Series B funding.
Stripeteams up with Amazon to power payments for Just Walk Out technology in Australia and Canada.
Desjardins partners with cloud banking firm nCino to leverage its Automated Spreading Solution to enhance lending.
Open banking
Dwollaexpands its partnership with MX to power account aggregation and verification.
Open banking platform Link Moneyforges partnership with Silicon Valley Bank to enhance ACH processing and money movement for merchants.
Wealth management
Online trading and investing platform Robinhoodlaunches rewards credit card for its Robinhood Gold subscribers.
Wealth-building platform Belongsecures $3.7 million (£2.95 million) in pre-seed funding.
Multi-asset class investment accounting platform FundGuardraises $100 million in Series C funding.
Financial education
Wealth building and financial education platform Goalsetterclosed a $9.6 million Series A extension round.
Cash management
Cash-flow management platform SettlelaunchesAutomatic 3-Way Matching for Purchase Orders.
Fraud prevention
Plaidforges partnerships with Sandbox Banking and RealPage to help fight fraud in the customer experience.
AI-powered fraud and risk platform DataVisorlaunches its end-to-end anti-money laundering (AML) solution.
Financial crime compliance company Napier AI reports that its customer Banco do Brasil has won the Celent Model Risk Manager 2024 Award for combatting financial crime.
Visaadds three new AI-powered risk and fraud prevention solutions.
Cryptocurrencies / Blockchain
Revolut and Layer 1 blockchain Sui team up to boost blockchain education and adoption.
Trading and investing platform eToroadds 12 new altcoins to its cryptocurrency offerings.
Identity management / verification
ID verification company AU10TIXunveils expanded Digital ID solution.
Insurtech
Rewards credit card company Yonder to offer its members a new travel insurance experience courtesy of a partnership with embedded insurance orchestration firm Qover.
New Jersey’s largest credit union, Affinity Federal Credit Union, partners with Insuritas to launch Affinity Insurance Agency.
PayPal Ventures and MassMutual Ventures lead $47 million Series C funding round for Indonesian insurtech Qoala.
Mortgagetech
Equifax UKteams up with Homely to help first-time homebuyers become “mortgage-ready.”
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 Solarissecured $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.
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.
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.
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.
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.
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.”
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 Reportunderscored 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.
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 Galileoannounced 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.
Payment, banking, and investment systems provider FISannounced 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.
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.
