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6 Benchmarks TCH Reached Before FedNow Even Launched

6 Benchmarks TCH Reached Before FedNow Even Launched
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

By now you’ve likely heard that the U.S. Federal Reserve launched its FedNow instant payments solution. Using the new tool, banks and credit unions can enable their customers to instantly transfer money at any time of day, any day of the year.

The release comes 10 years after the Fed first started talking about creating a real-time payments (RTP) solution in 2013, and five years after it began developing an RTP offering. The Fed’s instant payments solution also comes after a handful of competing companies in the private sector– including Orum, Visa Direct, and The Clearing House (TCH)— had already launched.

The latter of these– TCH– just released an update that details some of the metrics it has reached in the instant payments realm after launching its RTP network in November of 2017. Here is what the company has achieved in six years:

Increased transaction number

The number of transactions on the RTP network in Q2 2023 totaled 58 million, up from 41 million transactions during that same period last year.

Increased transaction volume

The value of transactions during Q2 2023 reached $29 billion, up from $18 billion in the same quarter last year.

Gained financial institution customers

More than 350 financial institutions are providing real-time payments on the RTP network to their customers and members.

Gained business adoption

150,000 businesses are sending payments over the RTP network. This is a 50% increase since December 2022.

Reached end consumers

3+ million consumers each month are sending account-to-account payments and Zelle payments that leverage the RTP network

Reached demand deposit accounts

The RTP network currently reaches 65% of U.S. demand deposit accounts.

These milestones signify three things. First, they are a reminder to always question claims of “industry firsts.” The launch of FedNow is buzz-worthy because it is a government-led initiative, not because its the first player in the U.S. to enable real-time payments.

Second, TCH’s milestones indicate that consumers are not only conceptually ready for the change, they are open to trusting the process behind the change. “As more banks and credit unions join the RTP network, their customers and members are experiencing the benefits of real-time payments,” said TCH Senior Vice President of RTP Product Management Rusiru Gunasena. “Surpassing 500 million RTP payments signifies the accelerating growth and demand on the RTP network.”

The last thing TCH’s stats demonstrate is that there is still room for a lot of growth in this area. FedNow may not have been the first player to enter the market with an RTP solution, but that’s not to say it won’t be successful. There are currently 57 banks and credit unions planning to participate in FedNow, and Forbes estimates that number will increase to 200 by the end of the year and will reach 500 by the end of next year.

Photo by Hasan Albari

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Shopify Launches Business Credit Card Powered by Stripe

Shopify Launches Business Credit Card Powered by Stripe
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Shopify is launching a business credit card.
  • The launch is among 100+ updates the company is making today as part of its summer release.
  • The new Visa-branded credit card is powered by partnerships with Stripe, which is powering the infrastructure behind the card, and Celtic Bank, which serves as the bank partner.

Shopify released 100 updates today. Out of the updates, the most interesting was the launch of a Visa credit card aimed at U.S. businesses. The card is fueled by partnerships with Stripe, which powers the infrastructure, and Celtic Bank, which serves as the issuing bank.

The card does not charge fees or interest– it is a pay-in-full card that offers business owners up to 56 days to pay for their purchases. After that point, Shopify will automatically debit any outstanding balances from the user’s designated account.

The new credit card offers businesses up to 3% cashback on eligible purchases, which include business expenses in the company’s monthly top spend category— marketing, fulfillment, or wholesale. For all other purchases, cardholders receive 1% cashback. Businesses can receive up to $100,000 in cashback, which is earned as a statement credit.

Eligibility for the credit card is based on a business’ sales performance, not an individual’s credit score. This allows the cardholder’s credit limit to increase as their business scales up.

Shopify has been offering businesses access to working capital with its commercial lending platform, Shopify Capital, since 2016. Underwriting for the loans works in the same way that the company’s credit card underwriting works. The credit offers are based on a business’ sales. In fact, the company uses more than 70 data points about a business applicant to underwrite the loan. Since launch, Shopify has distributed more than $4.5 billion in loans to its business users.

Other financial tools that Shopify offers its business users include Shopify Balance, which is a business financial management tool, and Shopify Bill Pay, a tool to help merchants manage and pay vendors.

Canada-based Shopify has been bringing ecommerce websites and tools to retailers since 2004. In the years since, millions of businesses in 175 countries have used the company’s technology to make over $700 billion in sales. Tobias Lütke is CEO.

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Grasshopper Bank Partners with Financial Crime Assurance and Testing Specialist Cable

Grasshopper Bank Partners with Financial Crime Assurance and Testing Specialist Cable
By David Penn Posted on
Categories: Alumni News, Cable, Daily news, Women in Fintech
  • New York-based digital bank Grasshopper announced a partnership with automated financial crime assurance and testing specialist Cable.
  • The partnership will enable the bank to enhance its own compliance and risk management capabilities.
  • Cable made its Finovate debut last September at FinovateFall.

Digital bank Grasshopper has turned to Cable for its automated financial crime assurance and testing capabilities. The bank will leverage Cable’s technology to deploy next-level automation that will enhance the advanced compliance and risk management capabilities of its own compliance program.

“Cable will help us and our fintech partners take advantage of the latest automation to gain superior visibility and comprehensive compliance insights, which will enable our clients to scale more efficiently and responsibly – back by the leading advanced compliance technology,” Grasshopper Chief Compliance Officer Chris Mastrangelo said.

Cable offers a solution that enables both banks and fintechs to automate their compliance assurance and effectiveness testing. The company’s Automated Assurance offering helps institutions discover regulatory breaches and control failures when they occur, empowering compliance teams to take immediate action. Cable’s technology streamlines a variety of manual processes including operations in quality control, stakeholder reporting, and record management. The company says that businesses have achieved nearly a 6x average return on investment in their first year using Cable. Clients using Cable’s complete suite of solutions have saved an average of $440,000 a year, according to the company. Cable demoed its technology at FinovateFall last year.

Based in New York, Grasshopper is a digital bank with total assets of more than $700 million. The institution caters to the “innovation economy,” serving small businesses, startups, venture capital and private equity, as well as fintechs. The bank’s partners include a number of Finovate alums including Visa, FIS, and Alloy. Grasshopper won Best Use of Tech in Banking at the 2023 Banking Tech Awards USA sponsored by sister publication Fintech Futures.

“As one of the most innovative BaaS providers, Grasshopper demonstrates that integrating cutting-edge compliance infrastructure and automation is mission-critical to the success of the best BaaS companies in today’s banking landscape,” Cable CEO Natasha Vernier said. Grasshopper will take advantage of Cable’s Partner Hub, which provides compliance infrastructure that is specifically designed for bank-fintech relationships. This includes automated risk assessments, automated assurance, quality assurance, management information, reporting, and more.

Vernier co-founded Cable with Chief Product Officer Katie Savitz in 2020. The company raised $11 million in Series A funding in May. Stage 2 Capital and Jump Capital provided the financing, along with existing investor CRV. This year alone, Cable has partnered with digital asset custody platform Palisade, embedded banking software platform Treasury Prime, U.K. bank Griffin, and crypto payments company Ramp.

Photo by Silas Jaeger

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Embroker Partners with Password Management Provider Dashlane, Cyber Insurer Cowbell

Embroker Partners with Password Management Provider Dashlane, Cyber Insurer Cowbell
By David Penn Posted on
Categories: Alumni News, Daily news, Dashlane
  • Business insurance platform Embroker has announced strategic partnerships with Dashlane and Cowbell.
  • The partnerships are designed to help the company improve customer security and enhance liability coverage.
  • Dashlane is a password management provider. The company won Best of Show at FinovateFall in 2012. Cowbell is a cyber insurance provider for SMEs.

Embroker is taking two giant steps toward enhancing security and liability coverage on its business insurance platform. The San Francisco-based company has forged strategic partnerships with password management provider Dashlane and cyber insurance provider for SMEs Cowbell.

“Through Cowbell and Dashlane, we are not only able to support our customers in the event of a cyber breach, but also help them avoid one altogether,” Embroker Chief Insurance Officer David Derigiotis said. “It is services like these that are shaping the next generation of insurance, making getting coverage easier and actively beneficial to those who hold policies with us.”

Courtesy of the partnership, Embroker policyholders will be able to access Dashlane’s enterprise password management technology. Dashlane’s solution leverages zero-knowledge encryption, which stores passwords and other sensitive data in vaults that are private – even to Dashlane. The company also offers dark web monitoring to alert Embroker customers when their information may have been exposed. Dashlane CEO John Bennett called the partnership “a natural pair” due to the potential impact of breaches on policy premiums. “By aligning with a partner like Embroker, we’re helping to create safer business environments from start to finish for the startup community, holistically protecting businesses from the increasing cyber threats they face,” Bennett said.

Embroker’s partnership with Cowbell will combine the company’s Cyber Liability Product with Embroker’s own LPL solution via API. The addition gives Embroker customers broader options when it comes to bespoke coverage. Embroker announced that the combination with Cowbell has completed the company’s law bundle offering.

Founded in 2009 and headquartered in New York, Dashlane made its Finovate debut in 2012. At the conference, the company won Best of Show for its technology that enables instant checkouts and universal logins while maintaining privacy and security. In the years since, Dashlane has grown into a credential management leader that has secured more than 2.5 billion credentials and safeguarded passwords and passkeys for more than 20,000+ companies.

Dashlane’s John Bennett joined the company as CEO in February of this year. In April, the company became a board member of the FIDO Alliance. The following month, Dashlane announced a partnership with Network Communications Industries (NCI) to provide password management support to companies in Australia and New Zealand.

Photo by BOOM 💥

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American Express Introduces Commercial Partner Program

American Express Introduces Commercial Partner Program
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, American Express, Daily news
  • Credit card giant American Express launched its Sync Commercial Partner Program this week.
  • The program offers a suite of APIs that fintechs can embed into their existing B2B apps and services, including spend management, procurement, and other B2B software solutions.
  • As a result, businesses can access Amex tools and services within the fintech apps they already use.

American Express unveiled its Sync Commercial Partner Program today. The new program includes a suite of APIs that fintechs can embed into their own B2B apps, reaching business customers on the platforms they already use.

Using the Sync Commercial Partner Program, fintechs and software providers can embed Amex virtual cards into their own spend management, procurement, and other software solutions aimed at U.S. businesses. The Sync Commercial Partner Program is scalable to suit a range of fintechs’ needs; it offers robust developer tools, and comes with a dedicated Amex support contact. In a future iteration, Amex will enable fintechs to integrate virtual cards that can be added to several mobile wallets.

The card company said that it will add more B2B payment and data capabilities in the coming months.

“American Express Sync will put more B2B capabilities in the hands of fintechs and ultimately enable their customers to get more value from the platforms they use to run their businesses,” said American Express Vice President on the Global Commercial Services team Todd Manning. “Today’s announcement means that our broad base of American Express U.S. Business and Corporate customers will have more ways to pay their suppliers digitally.”

The use of embedded B2B payments has been expanding over the past few years. In 2021, the transaction value reached $700 billion in the U.S. By 2026, the value is expected to nearly quadruple to $2.6 trillion.

At launch, the Sync Commercial Partner Program has six early adopters– Centime, Eved, HQ, Melio, and PayEm. “Together, American Express and PayEm are providing customers with an intuitive way to manage payments, expenses, and cash flow by leveraging on-demand virtual Cards,” said PayEm CEO and Cofounder Itamar Jobani. “Our customers can now generate unique virtual Card numbers for specific employee requests or vendor transactions, giving them greater control, enhanced security, and streamlined reconciliation.”

Amex’s launch of its Sync Commercial Partner Program is the company’s latest move to boost its digital finance offerings. Last month, Amex partnered with Plaid to allow its customers to connect with Plaid’s 8,000+ connected apps without having to share their password with the third-party provider. And last spring, the card company launched American Express Global Pay, a cross-border payments tool for U.S. small businesses.

Listed on the New York Stock Exchange under the ticker AXP, American Express has a market capitalization of $124 billion. Stephen Squeri is CEO.

Photo by CardMapr.nl on Unsplash

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Embedded Finance Platform ASA Secures Partnership, Investment from Quansight Initiate

Embedded Finance Platform ASA Secures Partnership, Investment from Quansight Initiate
By David Penn Posted on
Categories: Alumni News, Alumni profile, ASA

Travis Oliphant, CEO of OpenTeams and venture partner with Quansight Initiate, has announced a strategic partnership with and investment in embedded finance platform ASA. The partnership will connect ASA with the open source community, enabling the company to build solutions and provide expertise in machine learning, and AI strategy and architecture.

“We are impressed with ASA’s commitment to helping fintech entrepreneurs engage more easily with existing banking technology, all while empowering account holders with greater control of their data,” Oliphant said in a statement. “We see strong potential for financial institutions to unleash the power of innovation that can bubble up from open-source communities into fintech solutions. ASA is transforming the industry, and I look forward to collaborating with the team as they grow.”

Terms of the investment were not disclosed. Oliphant and Quansight join former JP Morgan Chase CIO Austin Adams and former BECU CEO Benson Porter among ASA’s roster of investors. The funding adds to the $1.8 million in seed capital ASA raised in 2021.

Data scientist and entrepreneur Travis Oliphant is the creator of Python program language library NumPy, and founding contributor of Python’s SciPy library. Oliphant is also founder of Anaconda (previously Continuum Analytics), open source non-profit NumFOCUS, OpenTeams, and OpenTeams Incubator. Launched in 2019, OpenTeams is an open source solution provider that supports more than 680+ open source technologies.

Founded in 2020, ASA helps financial institutions and fintechs forge productive partnerships. The Utah-based company connects banks and credit unions with fintechs, providing a secure and compliant marketplace that makes it easy for FIs to implement the digital solutions their customers want. Via a strategy it calls collaborative banking, ASA has pioneered a new approach open banking that allows financial institutions to enter these partnerships while at the same time maintaining ownership and control over customer data. This helps remove regulatory risk and liability from the partnership, facilitating collaboration. ASA counts more than 25 community financial institutions, including Pyramid FCU and University Credit Union, and fintechs among its partners.

“We firmly believe that, if approached the right way, embedded fintech has the power to redefine bank and fintech partnerships, and the backing of industry powerhouses such as Travis reinforces the value of our technology,” ASA co-founder and CEO Landon Glenn explained. “Our team is already benefitting from Quansight Initiate’s deep expertise and insights, and we are confidence that we can accelerate the collaborative banking movement together.”

ASA most recently demoed its technology at FinovateFall last September. At the conference, the company showed how its trusted, closed ecosystem offers community banks and credit unions a way to collaborate and deliver the latest fintech innovations to their customers.

We spoke with ASA Head of Fintech Relationships Ryan Ruff at the company’s first Finovate appearance in 2021. In our conversation, Ruff explained the company’s unique approach to open banking. He also discussed how collaborative banking enables FI/fintech partnerships at scale.

Photo by Joshua T

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Dutch Neobank Bunq Earns $1.8 Billion Valuation with Latest Fundraising

Dutch Neobank Bunq Earns $1.8 Billion Valuation with Latest Fundraising
By David Penn Posted on
Categories: Daily news, Funding
  • Dutch neobank bunq raised an additional $49.3 million (€44.5 million) in growth capital.
  • The investment takes the firm’s total capital raised this year to $111 million (€100 million). bunq’s valuation stands at $1.8 billion (€1.65 billion).
  • Founded in 2012, bunq has nine million customers and $5 billion (€4.5 billion) in customer deposits

Netherlands-based bunq, the second-largest neobank in the European Union, has earned a valuation of $1.8 billion (€1.65 billion). The new valuation comes as the firm locked in an additional $49.3 million (€44.5 million) in growth capital. Current investors Pollen Street Capital, bunq Chief Information Officer Raymond Kasiman, and bunq founder and CEO Ali Niknam participated in the round. bunq has secured a total of $111 million (€100 million) funding this year alone.

“It’s been a truly magical year for bunq; we’re rapidly expanding and have seen massive deposit growth,” Niknam said. “With more and more people entrusting their money to us, we’re convinced that we should double down on our momentum and cement the way forward for future growth.”

bunq was founded in 2012, and offers banking, savings, payments, cards, and other financial services. The neobank specializes in serving “digital nomads”: individuals who live and work in more than one country. This strategy has helped bunq reach nine million customers and $5 billion (€4.5 billion) in customer deposits. Compare this with 5.4 million customers and €1 billion in customer deposits just two years ago. bunq primarily serves banking customers in Europe. Nevertheless, the company has begun the process of securing a banking license in the U.S.

In 2021, bunq received an investment of $213 million (€193 million). At the time, the fundraising was the largest Series A round raised by a European fintech. In the final quarter of 2022, bunq announced its first net profit. The company expects to achieve a full year of profitability this year.

“I’m incredibly proud that, just a decade since our inception, bunq’s service-oriented business model has proven to be profitable,” Niknam said in February. “Truly aligning our user-centered philosophy with financial success, we were able to build a business that’s only successful as long as our users are happy.”

bunq also announced a set of new enhancements this month. The company now gives customers up to 2% back on card spending on public transportation. Cardholders can also take advantage of 1% cashback for purchases at restaurants and bars. Bunq now enables users to save in multiple currencies, with interest paid out weekly. And with climate change top of mind for many of its customers, bunq has added carbon footprint tracking.

Check out our conversation with bunq Chief of Staff to the CEO Bianca Zwart from earlier this year at FinovateEurope. Zwart explained the company’s origins and its unique business model. She also discussed bunq’s goal of becoming the “global neobank for digital nomads and international people and businesses.”

Photo by Marko Zirdum

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Finovate Global: Capitalise.ai in Dubai, Cashless in Egypt, Accelerating Women in Tech

Finovate Global: Capitalise.ai in Dubai, Cashless in Egypt, Accelerating Women in Tech
By David Penn Posted on
Categories: Capitalise, Finovate Global, Marqeta, Nubank

Standard Chartered has teamed up with Dubai International Financial Center (DIFC) to launch the fifth cohort of Women in Tech accelerator program. The program is designed to empower female entrepreneurs in the UAE’s technology sector, and encourage innovation, diversity, and economic development. Participants in the program receive training, workshops, mentorship, and access to seed capital. Applications to join the accelerator can be submitted up until the end of July. Ten startups will be chosen to participate. The program ends with a demo day in October, giving each of the startups the opportunity to present their business model to a panel of industry thought leaders and experts, as well as potential investors. The top three startups in the program will be awarded a total of $100,000 in non-equity seed capital.

“By joining forces with DIFC Innovation Hub, we are also taking significant strides toward building a more inclusive and thriving tech ecosystem that supports women-led startups and harnesses the diverse talents and perspectives of women, ultimately shaping a brighter future for all,” Standard Chartered UAE CEO Rola Abu Manneh said.

Eligible companies must have a gender-diverse team. This includes a minimum of one female co-founder. Companies must demonstrate an innovative and scalable solution, as well as the technology’s sustainable impact. The program is for UAE-based startups only.

CFI Financial Group has partnered with Finovate Best of Show winner Capitalise.ai to bring AI-enabled, automated trading to clients in the Middle East. Capitalise.ai leverages code-free automation to enable traders and investors to implement their trading strategies more accurately and reduce human error. Capitalise.ai’s platform enables traders to plan trades in advance as well as take advantage of preset trading strategies. The platform then automatically executes trading decisions based on parameters decided in advance by the trader. This helps ensure that the trades taken are both timely and accurate.

In addition to executing trades, the Capitalise.ai platform also monitors the market for potential trading opportunities based on pre-set parameters. The platform notifies users when specific market conditions line up with their trading strategies, alerting them to potential opportunities in the market.

Capitalise.ai co-founders Shahar Rabin (Chief Product Officer) and Amir Shiovich (Chief Executive Officer) at FinovateSpring 2017.

“We are excited to introduce Capitalise.ai as a game-changer in the MENA trading landscape,” CFI Financial Group co-founder and MD Hisham Mansour said. “By offering this code-free AI trading technology, we are empowering our clients with the ability to automate their trading strategies effortlessly.”

Founded in 2014 and headquartered in Tel Aviv, Israel, Capitalise.ai demoed its trading automation technology at FinovateSpring 2017, winning Best of Show. In the years since then, Capitalise.ai has forged partnerships with crypto spot and regulated futures market ErisX, accounting software company Clear Books, U.S. spot FX trading platform Forex.com, and CFD/Forex broker AvaTrade. Capitalise.ai has raised $10 million in funding, and includes Poalim Equity and Binance among its investors. Amir Shiovich is co-founder and CEO.

Egyptian cashless payments app Flash secured $6 million in seed funding. The round was led by Addition, and featured participation from Flourish Ventures as well as other angel investors. The company will use the capital to accelerate product development, as well as customer and business acquisition in Egypt. Additionally, Flash has secured approval from the Central Bank of Egypt – in partnership with Banque Misr – to serve as a technical payment aggregator.

Flash gives consumers and businesses a cashless payment option via a scan-and-pay service. By adding their existing bank card or digital wallet to the Flash app, consumers can make purchases using their phones simply by scanning the QR code provided by the business. Flash enables businesses to accept payments from consumers directly without requiring point-of-sale (POS) systems or complex technical integrations.

Uber alumni Erik Gordon and Sherine Kabesh founded Flash in 2021. “Our mobile application removes transactional challenges for businesses looking for an easier solution than the POS,” Gordon said. “Our goal is to make payments easier, safer, and faster for everyone. We are also excited to be releasing new features to help consumers make better spending decisions.”

Here is our look at fintech innovation around the world.

Asia-Pacific

  • Stag, a financial education-related startup based in Vietnam, raised $600,000 in seed funding from Viet Capital Ventures, NH Securities Vietnam, and Singapore-based Resolution Ventures.
  • Hong Kong-based fintech Eddid Financial signed an agreement with Malaysian fintech MPAY establishing a joint venture to boost fintech expansion in Malaysia.
  • South Korean fintech U Fintech Hub secured $4 million in funding in a round led by Forest Partners.

Sub-Saharan Africa

  • Ten Southern African fintech startups received grant funding from the World Bank as part of the Fintech Challenge initiative of the Southern Africa Innovation Bridge Portal.
  • African paytech Flutterwave launched a new payment solution, Tuition, to enable users to pay for educational fees using local currencies.
  • Global Brands Magazine recognizes Access Bank Mozambique as “Best Banking Brand” based on customer service, satisfaction, and digital innovation.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

  • Marqeta announced an expansion to Brazil.
  • International remittance company Viamericas Corporation launched new program with Guatemala-based financial organization Banco GyT to promote financial inclusion for people with severe disabilities.
  • Brazilian fintech EBANX partnered with Nubank to help the company launch a new alternative payment service, NuPay.

Photo by Nextvoyage

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Best of Show: The Finovate Podcast’s Greg Palmer Chats with the Faves of FinovateSpring

Best of Show: The Finovate Podcast’s Greg Palmer Chats with the Faves of FinovateSpring
By David Penn Posted on
Categories: 1Kosmos, 9Spokes, Flybits, Podcasting, QuickFi, SAVVI AI, Wink

Check out Finovate VP and host of the Finovate Podcast Greg Palmer (@GregPalmer47) as he interviews the innovators that won Best of Show awards at FinovateSpring in May.

From digital transformation and payments to customer experience and the future of finance, the Finovate Podcast is a great way to hear from some of the most innovative talents in fintech.

Finovate VP Greg Palmer talks with Nate Gibbons of QuickFi on reimagining business financing and successfully managing rapid growth. Demo video.

Greg Palmer sits down with Tom Baran of 9Spokes on open banking and personalization in the SMB space. Demo video.

Greg Palmer interviews Jens Hinrichson and Robert MacDonald of 1Kosmos on the future of password-optional authentication. Demo video.

Greg Palmer talks with Deepak Jain of Wink on the future of biometric payments. Demo video.

Greg Palmer chats with Maya Mikhailov of SAVVI AI on on no-code AI solutions you can implement right now. Demo video.

Greg Palmer catches up with Hossein Rahnama of Flybits. Demo video.

Photo by CoWomen

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FedNow is Live: New System Brings Instant Payments to the U.S.

FedNow is Live: New System Brings Instant Payments to the U.S.
By David Penn Posted on
Categories: Daily news
  • The Federal Reserve launched its instant payments service, FedNow, today.
  • The new service enables businesses and consumers to send and receive money in real-time, 24/7/365.
  • FedNow puts the U.S. on par with countries like the U.K., Brazil, and India, as well as the EU, which have offered real-time payments for years.

The long-awaited launch of instant payments in the U.S. is here. The Federal Reserve introduced its FedNow instant payments service today. The new system enables businesses and consumers to send and receive money in seconds. FedNow is also available 24/7/365 and recipients get full access to sent funds immediately.

Funds can be transferred from person to person, from consumers to businesses, and from businesses to each other. There are currently 35 banks and credit unions participating in the program. A growing number of fintechs have also expressed their readiness to participate in the service. These companies include Finovate alums ACI Worldwide, Aptys Solutions, Finastra, Finzly, FIS, Fiserv, Jack Henry, and Temenos.

Federal Reserve Chair Jerome Powell praised the launch of the new offering. “The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient. Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.”

The potential impact of FedNow on businesses and consumers is significant. Not only will the everyday business of payments become faster and more streamlined, but also the rise of just-in-time access to paychecks and invoices will benefit both workers and small businesses. The service also helps smaller banks and financial institutions, enabling them to access and offer real-time payments without having to partner with larger, competing FIs for the service.

Check out our conversation from last fall with Bernadette Ksepka. Ksepka is Assistant Vice President and Deputy Head of Product Development with the FedNow Service.

Photo by Phil

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Five Reasons to Look for a Fintech Funding Rebound in the Second Half of 2023

Five Reasons to Look for a Fintech Funding Rebound in the Second Half of 2023
By David Penn Posted on
Categories: Funding, List series

Stocks might be soaring over the summer. But the headlines of late have been filled with dour reflections over fintech investment in the first half of 2023. The first half of the year – and the second quarter in particular – have been tough on fintechs seeking funding. But here are five reasons why fintech funding in the second half of 2023 – and beyond – is likely to be better than the first half.

The first half was pretty bad

One of the reasons why the second half of the year might see higher levels of fundraising in fintech is because the first half has set a fairly low bar. In its analysis of H1 fintech investment this year, S&P Global Market Intelligence noted that Q2 2023 was the “slowest quarter on record over the past two and a half years” in terms of deal count. In the U.S., H1 funding was down 28% from the previous year. Declines in the U.K. were even more severe, with H1 2023 trailing H1 2022 by a whopping 83%.

S&P Global Market Intelligence was careful to add that while the slowdown in investment impacted the first half significantly, the declines began late last year rather than at the beginning of this year. And while the report writers expressed anxiety over the continued low deal count, the report did note approvingly overall deal value growth, the potential for a stabilization in interest rates, and the underlying robustness of digital trends in financial services as factors that support a recovery in the second half of 2023.

About that recession

Despite layoffs in the tech sector and high-profile tremors in the banking industry like the collapse of Silicon Valley Bank, the widely anticipated recession – and its accompanying 5%+ unemployment rates – has yet to occur in the U.S. or Europe. As economic confidence grows, and the date for a potential economic slowdown gets pushed further into the future by economists, investors are likely to feel more comfortable putting capital at risk.

In addition to the potential for moderation on the interest rate front mentioned above, S&P Global Market Intelligence also highlighted the fact that many venture capitalists remain “flush with cash.” According to Pitchbook, the money available for investment by venture capital is at an all-time high of more than $279 billion for U.S.-based funds alone. That capital will only remain on the sidelines for so long.

Curbed enthusiasm

The popular embrace of emergent GenerativeAI solutions helped give the technology industry writ large a boost at a time when the focus was on shrinking workforces and a sense of stagnation in terms of post-smartphone innovation. At the same time, the strong but relatively muted response to Apple’s metaverse-manifesting VisionPro suggests that market for innovation is still strong, but it may be a little more sober than it’s been in awhile.

This could be a particular benefit for fintech companies where the solutions and services are geared toward clear human challenges in a way that some other areas of technology are not (more on this later). As investors return to the market in search of promising startups, those companies in industries with proven ways of using enabling technologies like automation and machine learning could see early interest.

More tech layoffs, More tech companies

It can be a delicate point. But in the same way that companies like Facebook and YouTube emerged from the wreckage of the dot.com bust, and Airbnb and Uber (and Finovate!) were born out of the ashes of the Great Financial Crisis, one door closing in the economy often signifies the opening of another. The talent that is leaving some of the biggest and most successful technology companies in history is likely to go on to launch and staff the next round of big, successful technology companies. Savvy investors know this, and will be watching to see who ends up where, and what they are up to.

Work the problem, people

One thing that I appreciate about Finovate conferences – and all similar events, to be honest – is that they are a live, in-person reminder that there are people – many of them younger than you and me – who are enthusiastically pursuing solutions to problems in their lives, the lives of their friends and loved ones, as well as the communities they belong to and care about. They tend to not have a lot of time for fear, doubt, or lamentations about what can’t be done. Instead they are more likely to embrace the old motto: lead, follow, or get out of the way.

As long as there individuals who need help sending money to relatives overseas, families struggling to save for the future, businesses looking for ways to make their services both more profitable and available to more customers, there will be fintech innovators building solutions for them. And few people know that better than the investors whose vision and commitment has help make and will continue to help make those solutions possible.

Photo by The Lazy Artist Gallery

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CRIF and Know Your Customer Team Up with Ping An OneConnect Bank to Boost Digital Onboarding for SMEs

CRIF and Know Your Customer Team Up with Ping An OneConnect Bank to Boost Digital Onboarding for SMEs
By David Penn Posted on
Categories: Alumni News, CRIF, Daily news
  • CRIF and Know Your Customer will help Ping An OneConnect (Hong Kong) Limited enhance digital onboarding for its SME customers.
  • CRIF and Know Your Customer have collaborated since forging a global commercial partnership in 2021.
  • Headquartered in Bologna, Italy, CRIF made its Finovate debut at FinovateEurope in 2014.

Banking credit information provider CRIF and regtech Know Your Customer have partnered to help Ping An OneConnect Bank (Hong Kong) Limited (“PAOB”) improve the digital onboarding process for its SME customers.

CRIF and Know Your Customer have developed a new system that uses real-time registry connections to automatically retrieve documents and map shareholders. The solution provides a centralized place to integrate data from multiple official sources which enables PAOB to streamline the onboarding process for its clients. In addition to leveraging automation to lower costs and reduce the amount of manual labor involved, the new offering supports on-going monitoring requirements, as well. Both CRIF and Know Your Customer offer a wide range of compliance solutions: CRIF provides a portfolio of business data and intelligence, including credit and ESG data. Know Your Customer provides real-time registry connections, Ultimate Beneficial Owner mapping across borders, and modular workflow capabilities.

Ivan Chow, Head of Strategy & Partnerships at PAOB highlighted the challenges facing regional SMEs in the immediate, post-COVID economic environment. Chow noted that the re-opening of places like Hong Kong is not only likely to feature increased business activity, but also increased demand for operating capital financing. “The partnership with CRIF and Know Your Customer will further enhance our customer-centric experience to the SME customers,” Chow said.

The partnership between CRIF and Know Your Customer extends back to 2021. The two companies announced a global commercial partnership in August of that year to help financial institutions pursue their digital transformation objectives. The alliance will combine CRIF’s KYC data offering with Know Your Customer’s platform to facilitate digital corporate onboarding for financial institutions. The agreement also featured a strategic financial investment in Know Your Customer. The amount of the investment was not disclosed. The company said the capital will help it further develop the AI and automation features of its technology.

Founded in 1988, CRIF is headquartered in Bologna, Italy. The company operates in more than 40 countries and includes more than 10,000 financial institutions and 600+ insurance companies among its customers. CRIF made its Finovate debut at FinovateEurope in 2014.

Photo by Jimmy Chan

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