Archie, the company that’s building the financial infrastructure for the freelance economy, is publicly launching with its first product to help businesses onboard, manage and pay independent workers.
It is also announcing $4.5million in funding from B Capital Group, Mac Ventures, Worklife Ventures, Hof VC, Dash Fund, Day One Ventures, Scott Belsky (founder of Behance) and the founders of Cameo, Blank Street, Ramp, BloomTech (formerly Lambda School), Eight Sleep, and more. Since Archie launched in April 2021, it’s grown to more than $15million in payment volume run-rate, up 8 times since July 2021 alone.
The future is freelance, but there is a lack of financial tools that offer the same stability and benefits for the 1099 economy that W2 workers have had for decades. 67 million Americans currently freelance in the US, and by 2027, 86.5 million people will be freelancing, making up 51 per cent of the total US workforce. By 2028, the number will surpass 90 million to represent the workforce’s majority.
Additionally, as a result of the pandemic and the Great Resignation, remote freelancer adoption has only grown. Currently, almost half of US businesses use freelancers to support their mission, growth and revenue. 81 per cent of these companies plan to hire freelancers again.
Archie’s first product is a seamless collaboration hub that helps businesses access the freelance economy in this competitive talent environment. For decades, businesses and freelancers have relied on the same fragmented workflows including dozens of distinct online and offline systems manually strung together to source freelancers, execute contracts, approve and pay for work, transfer funds, and manage accounting and tax filings. With Archie, businesses can digitally collect the information they need from freelancers (contracts, NDAs, invoices, W-9s, etc.), keep track of project deliverables and time spent, pay freelancers with one click, and manage year-end tax filings. From onboarding and contracts to payroll and taxes, every step of the freelance hiring process is streamlined and can be accessed cross-functionally on Archie.
With combined experiences from Square, Facebook, Complex, and Milk Studios, co-founders Yunas Reguero, Cassandra Aaron and previously Dylan Hattem are building the financial layer to help freelancers achieve financial security and independence. Their SMB product will enable them to leverage its structured knowledge about freelancer payments (from PDFs, ACH/wires, etc.) to underwrite products and build better and more accessible financial services for 1099s.
“People want to join the freelance economy but are scared of all the financial obstacles,” said Yunas Reguero, co-founder of Archie. “At the same time, businesses are increasingly relying on freelancers but the tools to tap into this economy are stuck in the past. We’re building the onramp for both sides to unlock the magic of the freelance world. With all these new and decentralized ways of both working and earning, we are excited to bridge that gap and accelerate trends in freelance hiring.”
“We always look for innovative ways to change the narrative around how businesses work with freelancers. This underpins our partnership with Archie. We work with hundreds of creators and influencers every month, and the platform has helped our team handle this volume while keeping our ambassadors in the loop and in control,” said Grace Murray, VP of Strategy at Fohr, a leading ambassador marketing company. “Archie helps us save valuable time and resources so we can focus on creating the best-in-class campaigns for our clients.”
Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.
Dubai Chamber of Commerce and Industry has expanded its partnership with Mastercard to drive economic growth in the Emirate with the leveraging of its data and intelligence services.
The partnership outlines the acceleration of digital payments, the enabling of a digital economy in Dubai and support for small and mid-sized enterprises (SMEs) in the market.
The Chamber will present Mastercard’s insight into the evolving spending patterns of consumers, including their use of online channels at a series of workshops that it’s due to host.
“A key pillar of our new 2022 – 2024 strategy is growing Dubai’s digital economy and improving the business environment,” said HamadBuamim, president and CEO of Dubai Chamber of Commerce and Industry.
“By utilising Mastercard’s global-best technologies, we will ensure these goals are achieved through deliberate and precise insights that ultimately serve to benefit the government, businesses and residents.”
Last year, Dubai Chamber transitioned to a new model in a paradigm shift for business in Dubai, in order to strengthen the Emirate’s position as a digitally-driven economy and global business hub.
The newly-adopted Dubai Chambers strategy is based on four main pillars: enhancing and developing the business environment, attracting international companies to Dubai, facilitating the global expansion of local companies, and advancing the emirate’s digital economy.
“As Dubai continues to embrace the power of technology in fostering business growth and sustainability, Mastercard is supporting our government partners in this dynamic journey,” said KhalidElgibali, division president MENA, Mastercard.
“With our ability to transform big data into meaningful insights, we are geared to help accelerate the transition of the city towards a smart economy. This partnership further supports our ongoing commitment to empower SMEs so they can thrive in a digital world.”
Economic growth in the UAE is on an accelerating path in 2022. Alongside the strength in the economy comes the rise of inflation following years of deflation. The pent-up demand of domestic consumers in the UAE is another pillar of growth, and the strong recovery in travel which began in the second half of 2021 is expected to continue this year.
Consistent with the increase in travel, spending on hotels, taxis and car rentals, particularly in Dubai and Sharjah, has also increased. Online penetration in products such as electronics has remained high while the most notable upward e-commerce share shift has been for restaurants.
Pay360 by Capita has been providing secure payment services for over 20 years. Trusted by brands big and small, it helps clients to offer seamless payment experiences across all payment channels.
With the pandemic forcing a considerable portion of the UK workforce to adapt to home-working, research shows that 26 per cent will continue to work remotely in some capacity. To adapt to this permanent shift successfully, organisations need to ensure long-term solutions to maintain their PCI compliance whilst also providing a safe environment for their employees.
With this in mind, Stephen Ferry, Managing Director at Pay360, shares his thoughts how payment organisations can maintain their PCI compliance with a hybrid workforce?
What has been the traditional Pay360 response to financial technology innovations? How has this changed over the past few years?
In recent years we have seen a huge number of acquisitions of fintech companies by well-established financial services companies, aiming to ensure that they remain at the forefront of the market.
Pay360 has taken a slightly different approach. We secured investment to develop an FCA regulated payment facilitator (PayFac) platform known as Evolve, which integrates into an independent software vendor’s own software, enabling faster customer onboarding, payments process automation and a speedier and more seamless customer experience. PayFacs sit between the online merchants and the rest of the payments infrastructure – acquiring banks, card schemes and issuing banks. They provide businesses with a means of rapidly accessing and delivering payments functionality while eliminating the time, cost and risk involved in setting up a payments platform of their own.
The PayFac model is actually quite straightforward and, in practical terms, it mirrors the software as a service (SaaS) model that so many software providers operate. Just as a SaaS provider ‘leases’ its platform – enabling its clients to leverage and benefit from years of investment and expertise in a specialised area – PayFacs enable users to access sophisticated technology, expertise in payments and established relationships with acquirers, card schemes and new acceptance channels.
For software providers, using the PayFac model delivers a number of advantages. The first is that they can get their own customers – the merchants – up and running and taking payments much faster. The second is that PayFacs businesses are payments specialists, steeped in the language, technology, processes of payments and take the regulatory requirements on behalf of a merchant. This means solutions such as Evolve from Pay360 are robust and secure by design: they are born out of decades of payments experience and expertise. PayFacs deliver reliability and security, removing a huge burden and providing peace of mind, both to the merchants and the software providers who want a technology-led payments solution.
Is there anything that has created a culture of change inside Pay360?
The overarching ethos of Pay360 is “how we can create better outcomes for our customers?”The introduction of a single CRM platform, Salesforce, has enabled Pay360 to have a singular image of the different solutions and services that we deliver to the customer. This has allowed us to understand further the expectations of our customers. In addition, Pay360 carried out extensive market research that was aimed at understanding the challenges facing customers, and specifically, what the company needed to do to adapt and deliver better technologies and services to all its customers. We then took time to listen carefully to each customer to ensure the solution we proposed could meet their current and future requirements, all backed up by a strong service model to ensure continual improvements can be made as and when required.
What fintech ideas have been implemented?
With the introduction of Pay360’s Evolve product, the company now has a software payment platform that will embed a payment platform into the architecture of Independent Software Vendors’ (ISV) proprietary offerings and enable us to help them scale their businesses dramatically over time and improve the end-customer journey. In addition to this, Pay360 has implemented several simple strategies through the introduction of new and innovative digital products to ensure we increase our value proposition in the market. We have identified technologies in the market that we know customers are familiar with and wish to access. We have then introduced those to our platform to help us create a fully functioning payment ecosystem for our customers. For example, an API-first onboarding journey with straightforward automation built-in (where required) – giving further options to both ISVs and customers in how they are onboarded.
Do you see any other industry challenges on the horizon?
Over the past two years, we have seen a huge shift to home working. For many organisations, the ability for their homeworkers to continue to accept card payments over the phone is essential. But without putting certain measures in place, organisations can find themselves in contravention of their PCI obligations, bringing their employee’s working environment into scope and opening themselves up to potential breaches. The increase in cyber-attacks only adds weight to the need for these measures.
Can these challenges be aided by fintech?
While security procedures such as company-provided hardware with up-to-date firewalls and dual authentication measures do go some way to protect sensitive data and adhere to their PCI responsibilities, the best way to ensure that their employees can’t be compromised is to remove the information cybercriminals are after from their environment – payment card data.
Among others, such as digital payment requests by card or open banking, one solution is DTMF suppressing or masking software. DTMF stands for ‘dual-tone multi-frequency’ and represents the signals or ‘beeps’ generated when a user presses individual buttons on their telephone keypad. Whilst these tones are dual-frequency (one high, one low), a measure put in place to try and prevent voice imitation, they can be decoded with the right hacking software.
With DTMF suppressing solutions, the applicability of PCI DSS to that environment can be reduced as the agent never sees or hears card data. Customers input their card information using their telephone keypad when prompted and the information is automatically transmitted to the Payment Service Provider (PSP) for authorisation. No cardholder data is exposed to the agent or enters the organisation’s environment, meaning the scope of PCI DSS is vastly reduced.
Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.
Over the past two years, enterprise leaders around the world have had to respond to disruption, unpredictability, and unprecedented challenges. The way the world interacts and transacts has changed, and across millions of businesses using Stripe, we’ve noticed that the capacity for businesses to adapt has been a major determinant of resilience and growth.
An adaptive business initiates change; an agile business reacts to it. The next generation of industry leaders will be companies that anticipate and take action to capture emergent opportunities, using their flexibility as a competitive advantage. They execute on strategies to find new revenue streams, pursue global expansion, and partner to scale faster. According to a recent study from Forrester, adaptive businesses grow at more than three times the industry average.
Stripe worked with The Economist Impact (formerly known as The Economist Intelligence Unit) on a research study that takes a deeper look into the core characteristics that make enterprises adaptive, the strategies leaders are pursuing as online commerce expands, and how the ability to navigate change is an enduring competitive advantage.
The analysis in the report is based on a survey of 600 C-level executives, and around a third of the respondents (34%) are based in Europe, with another third (33%) in North America, and the balance in Asia-Pacific. Their companies are distributed across a wide range of industries, with the largest representation from the financial services (15%), technology (15%) and retail (11%) sectors. Just over half (53%) of the respondents work in companies earning annual revenue of over US$500m, with the rest earning between US$100m and US$500m. Most of the companies represented (83%) are no older than 20 years, and 44% have existed for fewer than ten years.
The Covid-19 pandemic brought about profound change, affecting long- standing consumer behaviours and preferences, and in some cases permanently changing competitive landscapes. Businesses had to make consequential decisions in short order—rapidly modifying business models, accelerating digital transformation, seeking out new revenue streams, moving or re-thinking supply chains, entering new product or geographic markets, and improving online customer experiences.
The past two years have created an inflection point for enterprises—one that is likely to define business success for the next decade. Risks to business are considerable, yet organizations that are able to successfully navigate disruption while positioning themselves for growth can be a competitive advantage in today’s global economy. The findings in this report detail characteristics of an adaptive enterprise.
Key findings from the study
Adaptability is decisive. Businesses able to maintain or grow revenue under the difficult conditions of the pandemic appear to have made proactive choices in adapting to widespread change. When asked about chief factors enabling success, CxOs point to their firms’ ability to change or adopt new business models, serve customers online, and scale in short order to shifts in customer behavior and demand. Companies suffering revenue declines, by contrast, highlighted struggles with some of these same areas.
Going for growth. The pandemic has not slowed, but instead seemingly accelerated businesses’ pursuit of growth or new revenue streams. Survey respondents indicate a strong intention to boost investment in technology and show little support for cost-cutting. Rather than contract their businesses, a majority of CxO respondents—80%—believe global expansion is central to their business viability. Over half—52%—plan to increase the number of countries they trade in over the next year. Only 13% said they would decrease.
Digital is integral. The flight of consumers to digital channels was dramatic in 2020, and CxOs in the survey expect the consumer trends that accelerated during the crisis to gain additional momentum. Among the surveyed companies, 28% say half or more of their company sales came via online channels before the pandemic, 46% indicate the same was true during the pandemic (as at October 2020), while 54% anticipated half of their revenue to come from online channels by the end of 2021. A majority—82%—believe that their customer’s shift to online purchasing during the crisis will continue, even after the pandemic is over.
Anticipation is key. Far from all companies were ready for a digital acceleration: 69% of CxOs say their firms under-invested in online strategies before the pandemic. A majority—53%—say they now plan to boost investment in digital transformation over the next 12 months, aiming to improve processes or operations, innovation and customer experiences. The maintained or increasing digital budgets imply a CxO outlook that it’s never too late to adapt.
Stripe is a financial infrastructure platform for businesses. Millions of companies—including financial organisations like Hargreaves Lansdown, Klarna, and AJ Bell—use Stripe to accept payments, grow their revenue, and accelerate new business opportunities. Headquartered in San Francisco and Dublin, the company aims to increase the GDP of the internet. Check out Stripe’s website to learn more, and contact sales when you’re ready to have a conversation.
As the World’s Fair, the first in the Middle East, Asia and South Asia (MEASA) region comes to an end, host city Dubai showcased various initiatives around its wider theme of opportunity, mobility and sustainability.
Expo 2020 Dubai overview
Having had the opportunity to attend the Expo myself and visiting the various pavilions and other initiatives – both primarily from a professional aspect and also personal, the Expo grounds were short of impressive is an understatement.
The first-ever World’s Fair at the MEASA region, awarded by the Bureau International des Expositions (BIE) in Paris back in 2013, truly delivered on its promise by gathering everyone from across the world to celebrate the beauty of humanity and the theme for this year around opportunity, mobility and sustainability.
Despite the challenges of the pandemic, visitor numbers were impressive and showed the world why Dubai is a leader in tourism, and in times like now, one that can provide a space for that in a safe yet fun environment.
Being billed as the first Expo ever to have every country participate, Expo 2020 Dubai showcased the best that the world had to offer as well as the host country, the UAE, as well. I had the opportunity to visit several of them on a personal level.
In terms of the series with The Fintech Times, various countries were spotlighted in terms of their general Expo 2020 Dubai presence and, in particular with this publication, specific to their wider fintech initiatives.
Key aspects in the fintech and wider digital and financial services space
First, there were various events and conferences that occurred. This included the Global Business Forum (GBF) Africa 2021 that happened which was organised by the Dubai Chamber of Commerce and Industry.
Africa’s emerging contactless economy is growing rapidly in the Covid-19 era; creating new growth opportunities that African and foreign companies and investors can capitalise on was highlighted at the GBF Africa 2021, which happened at the Dubai Exhibition Centre at Expo 2020 Dubai.
The African continent’s growth rate of contactless adoption comes in tandem with a range of various initiatives that are currently underway across the region.
For example, Emirate NBD has recently run their ‘Get Together. Go Contactless’ campaign, which in parallel saw the rate of contactless transactions soar by 67 per cent. In addition, the International Trade Centre (ITC) recently cited the development of a comprehensive digital infrastructure as one of the main drivers of growth within Africa.
Second, delegations from across the world visited Dubai around Expo and this included some of the world’s leading fintech hubs. For example, London and fintech played a role in the wider ecosystem. As part of the Mayor of London’s International Business Programme, the business growth and destination agency London & Partners sent its recent cohort of UK fintech talent on a trade mission to the UAE, of which I was pleased to be a part of.
During the four-day visit in February this year, London-based fintech delegates are due to meet with an array of pioneers who are currently leading the cultivation of Middle East and North Africa (MENA)’s fintech industry. This included a reception at the UK Pavilion at Expo 2020 Dubai.
Third, there were not only delegations, but they also made significant announcements. For example, the first and only fintech-focused Africa Fund has been launched by The Kigali International Financial Centre (KIFC) at an announcement in Dubai. Valued at $50million and backed by MyGrowthFundVenture Partners, the fund hopes to facilitate homeland investment.
The fund domiciled in KIFC will create proximity on the continent between investments and fintech investment opportunities and is set to increase investment in African fintech by African firms; especially when considering how less than 10 per cent of private equity investment came from the continent last year.
The fund’s objective is to grow by 140 per cent. The delegation that was a part of this kicked it their mission at Rwanda National Day on 1 February at Expo 2020 Dubai.
Fourth, there were specific fintech events that happened during Expo 2020 Dubai. For instance, Bahrain’s The National Bank of Bahrain (NBB) launched its Digital Banking Challenge in partnership with Bahrain FinTech Bay; one of MENA’s largest fintech hubs.
NBB also took part in a flagship event sponsored by the Bahrain Economic Development Board (EDB) in partnership with The Economist, entitled ‘Looking Ahead: The Middle East’s Path to a Digital Economy.’
Fifth, there is also sheer volume in terms of wider digital and tech visitors. India is an example of this, whereby India Innovation Hub, which is a project of the India Pavilion at Expo 2020 Dubai where over 500 Indian startups will be showcased.
This included recently where Dubai Silicon Oasis (DSO) and India Innovation Hub announced a partnership with Indian online travel company EaseMyTrip and HSBC to facilitate 200 Indian startups to showcase their business ideas and innovations to global investors at Expo; fintech, artificial intelligence (AI) and cybersecurity are key sector focuses.
Finally, there is of course the sponsors of Expo 2020 Dubai. One key one in the sector is Mastercard, which has done various initiatives during the World’s Fair. First, there is the Mastercard Cube, whereby Mastercard immersed visitors in a range of multi-sensory experiences as they embark on Priceless journeys tailored to their passion, including sport, food, and music, plus being a ‘force for good’.
At the Cube, visitors saw reality content that brought to life the next era of innovation, as Mastercard demonstrated how the power of payment technology will be harnessed to make life safer, easier, and more connected for all.
Also, Mastercard revealed an installation dedicated to its Priceless Planet Coalition, aiming to plant 100 million trees worldwide over five years. The innovative concept invited visitors to understand more about Mastercard’s efforts in bringing together governments, businesses, and consumers in combatting the effects of climate change; it offered them an opportunity to become part of the network and contribute towards a greener future.
Expo visitors had a chance to contribute to a greener future by donating to Mastercard’s Priceless Planet Coalition upon checkout as an add-on feature while buying their tickets to the World’s Fair.
Mastercard also supported Expo 2020 Dubai’s commitment to creating a more equitable future, whereby the company harnessed the platform to advance its efforts to drive gender equality around the world. The company and Expo hosted a range of activities at the Women’s Pavilion to celebrate the successes of women leaders by providing a platform for female voices that will culminate in a legacy project.
To note, another key partner, UAE-headquartered band Emirates NBD, also was active at Expo 2020 Dubai. A Premier Partner and the Official Banking Partner (Emirates NBD) and the Official Islamic Banking Partner (Emirates Islamic) of Expo 2020 Dubai, unveiled its pioneering vision for the future of global banking at Expo 2020 Dubai.
Spanning 3,000 square foot in the Al Wasl Avenue, the Future Banking space comprised of five distinct pods each housing deeply immersive, interactive and engaging exhibits that shine light on the role that banks will play in fulfilling customers’ future needs, aspirations and goals.
The innovative and futuristic concept-driven exhibits enabled visitors to experience different virtual personas, to learn about cutting-edge banking initiatives that aim to address future challenges. This was led by Emirates NBD and Emirates Islamic’s customer-centric philosophy, and developed in partnership with leading global players.
Each of the exhibits were designed to deliver meaningful and sustainable impact, leveraging emerging technologies, data, the power of ecosystems, and new business models and opportunities.
As the world looks to Osaka 2025 for the next World’s Fair, Expo 2020 Dubai nonetheless left a foundation and legacy for the rest to follow.
The scenario is not a new one. Established financial institutions are slow to embrace new technologies. Their reticence is costing them dearly as they lose customer confidence and market share to a bold, tech-savvy generation of challengers. The seemingly simple solution – to seize on innovation – isn’t quite so simple in a sector that’s necessarily risk-averse.
Gary Bond is CEO of TISAtech. He has held numerous roles across fintech and financial services, including as CIO and Head of European Change for Fidelity International, as well as senior positions in Venture Capital firms. As TISAtech, Gary works to accelerate the adoption of fintech innovation in financial services by benchmarking, improving, and connecting fintechs with the financial institutions that most need their solutions.
Here he shares his thoughts on how to ‘de-risk the high-risk’ innovation in financial services.
There’s no going back as technological change accelerates and transforms financial services forever. As theFCA reports, “…there are signs large banks’ historic advantages are starting to weaken, driven by digital innovation and changing consumer behaviour.”
If institutions and innovators can’t come together more effectively, we risk the future of whole businesses – and even financial innovation itself.
A blockbuster future
It’s a Catch-22 situation. The big institutions need innovation to survive, yet they are inherently innovation averse. Innovation, by definition, means something new, unproven and disruptive. Established finance sees anything that’s new, unproven and disruptive as an existential threat.
Challenger financial services are completely free of the legacy mindsets that hold their competitors back. Everything is new, nothing is set in stone. Risk – or more accurately, an unencumbered desire to make things better – is the adrenalin that pumps a challenger’s heart.
Why have inconvenient branches, endless forms and infuriating checks when a smartphone and the latest fintech solutions will do it all better? Customers are providing the answer, with the number of Brits owning a digital-only bank accounttrebling from just 9 per cent in pre-pandemic 2019 to 27 per cent in 2022.
All things remaining equal, traditional finance is doomed: destined to go the same way as the high street video rental shop. Institutions that have graced Threadneedle Street for centuries will vanish, to be replaced by web properties and apps with no vowels in their names. It might seem far-fetched, but tell that to the shareholders of Blockbuster.
The contagion may spread. In failing to run with the extraordinary wealth of innovation coming from emerging fintechs, the danger is that it will be denied a market. Risk aversion may not only kill off the big banks, but it could also starve fintechs of the oxygen of investment. It really is a case of ‘innovate or die’.
Bridging the confidence gap
Institutions are effectively being asked to gamble their reputations and potentially vast sums on tiny, grass green, micro-funded companies that could go belly up in a week. The innovation itself might be a game-changer, but the company could be badly run, not have the staffing or finance to deliver, or a host of other unknowns that haunt a big bank risk assessor’s dreams.
The fact is, though, that many of these technologies obviously work because they’re transforming the sector – the secret sauce that’s driving the meteoric growth of new players.
The missing piece here is confidence. What we need is to find a way to bridge the gap between ‘risky’ innovation and ‘de-risked’ adoption. As you’d expect, action is needed from both established institutions and fintech innovators.
The innovation mindset
Let’s start with the financial institutions. Given the plethora of regulations that surround them, wariness is understandable, admirable and essential. They do not, however, have to charge headlong into organisation-wide innovation to benefit from it – but they will have to change mindsets, from CEO level down.
Untested innovation in core services – where risk is most pronounced – is likely to be avoided. This still leaves scope for widespread innovation in non-core services that provide customers with the fintech enabled services they so clearly like. We can already see this taking hold in some – but certainly not all – of the big retail banks. The reality is, there’s plenty more room for calculated risk-taking in non-core services.
Innovations within core services aren’t off the books either. Financial institutions benefit from a free-of-charge testbed that they can tap at will: the challenger banks themselves. Keeping a watching brief will help the big banks to evaluate fintech solutions in real-time – adopting and adapting rapidly maturing solutions once they have proven themselves.
Time for fintech to prove itself
Speak to any fintech innovator and they’ll almost certainly tell you that their greatest frustration is trying to sell to a tier-one financial institution. They jump through all the hoops and then hit the risk assessment brick wall. All that time, money and energy is wasted.
That is unlikely to ever change, so the answer is to avoid tier one and focus on tier two.
Successful implementation in tier two, as we’ve already seen, is the real tier-one testbed. Prove themselves here and the risk assessment wall might not seem so impregnable.
Big banks are wary of the unknown, so fintechs need to be more transparent. While a six-month-old start-up can’t show three years of accounts, it can demonstrate its financial responsibility. While it can’t provide multiple case studies, it can demonstrate real-world user experiences from beta testing. The list goes on: the more a financial institution understands, and is reassured by what it sees, the less likely it will say no.
Setting new standards
Add the requirements of financial institutions and fintechs together and we can see that there’s a need for a new set of standards.
Agreed benchmarks mean fintechs understand current capabilities, their relative maturity when compared to others and the actions and tools they need to make the grade. Above all else, a fintech can prove to potential customers and investors that they and their solutions are business-worthy and market-ready.
Similarly, financial institutions can use standards to quantify the risks of partnership. It gives them access to a database of companies that have reached a minimum (though high) requirement, allowing them to: make informed decisions; introduce innovation earlier, and better meet customer expectations.
The only way to square the circle – and de-risk high-risk fintech – is to adopt agreed new standards – building the confidence that unites institutions with innovation.
Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.
Temenos (SIX: TEMN), the cloud banking platform, is collaborating with Mastercard, a global technology company in the payments industry, to help banks accelerate their introduction of Request to Pay services in the UK. This initiative combines pre-composed solutions on the Temenos Banking Cloud with market-certified Mastercard services, making it faster and cheaper for financial institutions to introduce Request to Pay services.
Request to Pay enables billers to request and manage the payment for a bill rather than simply sending an invoice. The payer receives a curated digital request on their internet or mobile device through a banking or third-party fintech application. The payer can either partially or fully approve, defer, or even reject the request, enabling them to manage their bill payments better. However, if approved, a payment order will be submitted for execution within the bank via a preferred route, including through the Faster Payments system, allowing the biller to receive funds in real-time.
Request to Pay is still at an early phase of its rollout and reach. With this collaboration, Temenos and Mastercard aim to accelerate market adoption, enabling complete end-to-end, real-time processing and secure and successful communication between buyers and payers.
Request to Pay positions financial institutions at the centre of the bill pay experience, helping to improve customer engagement and achieve competitive differentiation. For their biller clients, it helps them engage with payers more securely and effect the faster receipt of the payment, improve payment reconciliation and reduce arrears and associated costs. Furthermore, for both Financial Institutions and Payers, Request to Pay can also help reduce instances of authorised push payment (APP) fraud due to the strict anti-money laundering and know your customer processes in place across the ecosystem.
Mastercard’s State of Pay report found one in 10 people in the UK often forget to pay their bills resulting in late payments, and nearly one in five say they do not feel in control of the outgoings from their accounts. Request to Pay provides individuals with more options and flexibility to settle bills, whether for significant purchases, utility and telecoms bills, or items such as council tax payments.
The UK recurring bill payments market is estimated at more than six billion transactions, amounting to hundreds of billions of pounds in value. There are also a large number of ad-hoc bills for non-recurring items like car repairs and decorating services, which present an additional significant potential market for Request to Pay. UK Finance estimates these ad-hoc bills total approximately 30 billion bills annually. Increased digital services and subscriptions have stimulated the growth of non-traditional recurring bills – further increasing the expectation of volume growth in the upcoming years.
MickFennell, business line director, Temenos Payments, said: “The race is now on to take advantage of Request to Pay driven market opportunities, where both billers and payers demand easy to use solutions embedded into the service offerings from their banks. Working with Mastercard, the Temenos Request to Pay solution will enable banks to quickly seize and develop these opportunities, building a competitive edge in fulfilling market demand for efficient, reliable, and cost-effective execution of the service.”
FrodeAsheim, EVP, Bill Pay, Mastercard, added: *“When paying bills, people value choice, control and flexibility with the added convenience of having all their bills in one place for a smooth day-to-day money management experience. Our innovative Request to Pay solution addresses these needs from consumers while at the same time providing additional benefits for billers and financial institutions. The participation of banks and other FI’s is essential to the success of Request to Pay, and by working with partners like Temenos, we can accelerate adoption in the market.”
The UK Independent Anti-Slavery Commissioner, Dame Sara Thornton, the UK National Modern Slavery Training Delivery Group, and Themis, with further support from other companies, have launched an anti-slavery digital learning service for financial actors across 10 of the industry’s sub sectors including retail banking, corporate banking, investment, insurance, accountancy, and crypto. It is accredited by the London Institute of Banking and Finance.
The training draws on extensive consultation and engagement with civil society, government, law enforcement and the private sector, and includes insights and video clips from experts Karen Bradley MP, Caroline Haughey QC, HSBC, Nationwide, Fidelis, Anti-Slavery International, and Transparency International, amongst others. It is free to use and accessible to all organisations, large and small across the financial sector and beyond.
Last month the UK government released figures for the number of potential victims of modern slavery referred to the Home Office in 2021. It shows a 20 per cent increase compared to the preceding year. Meanwhile, hundreds of thousands of vulnerable women and children fleeing the war in Ukraine are falling prey to traffickers, ready to lure them into exploitation. The business of modern slavery and human trafficking is thriving in the UK and beyond. It is not only a lucrative business; it is also a financial crime.
UK Independent Anti-Slavery Commissioner, Dame Sara Thornton said, “Slavery and trafficking are economic crimes, where the commodity is a person who is exploited to make money. The responsibility to tackle modern slavery lies with us all; no single entity can address this alone. It demands a collective collaborative response.”
Far from having a backseat role, the financial sector is at the front line. Sadly, it is highly likely that we are all connected in some way to slavery, through no fault or intention of our own. This could be a direct link, because traffickers are using our services to move money through the system, or an indirect link, perhaps through a downstream client, investment or supply chain risk, through a lending or investment activity, or even the third parties we are using to help run our businesses.
OSCE special representative and co-ordinator for combating trafficking of human beings, Valiant Richey noted, “There is no other crime that exists that is so large, so expansive and so profitable, where human beings are the product as occurs with modern slavery and human trafficking.”
Themis CEO, Dickon Johnstone said, “Modern Slavery is a multi-million-pound business that’s all about the money. Traffickers are preying on the most vulnerable – men, women and children – and using them as a commodity, in the same way they might profit from drugs, arms and counterfeit goods. In fact, in many cases, there is a strong convergence with other serious and organised crimes all played out as part of a larger criminal enterprise.”
Kim Ann Williamson MBE, chair of the UK Modern Slavery Training Delivery Group said, “I am delighted to be launching this new training and I urge financial institutions to lead the way by embedding this modern slavery training within their organisations to influence raising awareness and protecting their customers from exploitation.”
Hope Sherwin, head of social impact for Themis said, “It is critical that all institutions screen their clients, investments, suppliers and 3rd parties against dedicated lists of convicted traffickers to make sure that there are no direct or indirect links to slavery within your business operations.”
Johnathan Bell, partner at RedCompassLabs said, “There are only two types of payments – good and bad. We all need to play a part in detecting and disrupting the bad payments.”
At its meeting on 30 March 2022, the Federal Council initiated the consultation on the implementing ordinance on climate reporting for large Swiss companies. The ordinance fleshes out existing legal provisions on reporting on non-financial matters in the Swiss Code of Obligations. The consultation will run until 7 July 2022.
The draft ordinance is calling for companies to report about the climate domain in an “internationally recognised machine readable format”, which the explanatory report specifies as XBRL. This may well be the first time the famous four letters print in a Swiss legislative document – we certainly support!
The Financial Reporting Council (FRC) of Nigeria says the development of its ongoing extensible Business Reporting Language (XBRL) will be ready by 2023, hoping that the language will lift the gridlock that has been hovering over the financial sector for years.
Looks like Africa’s largest economy will soon join the XBRL bandwagon, joining Mauritius and South Africa.
The complexity and cost of global efforts to improve the data quality of derivatives regulatory reporting create a variety of challenges for market participants and policy-makers. These concerns – and the opportunity to mitigate them as major changes to reporting rules are implemented over the next two years – have become a powerful impetus behind digital regulatory reporting (DRR) initiatives.
ISDA, the Internationals Swaps and Derivatives Association, is the global trade body standardising everything financial derivatives. Hence this paper presenting an overview of DRR offers a useful institutional perspective.
Christian Dreyer CFA is well known in Swiss Fintech circles as an expert in XBRL and financial reporting for investors.
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While open banking is still a relatively new concept, it is well on its way to driving business innovation and supporting tech-powered collaboration across all industries, and offering new service-oriented products. Open banking is incredibly flexible, having the ability to enrich any industry, helping streamline payments, facilitating necessary financial data sharing, as well as simplifying and automating accounting processes. The insurance sector is no exception.
Rolands Mesters is co-founder and CEO of Nordigen, the first free European open banking API that provides regulated connections to major European banks. Here discusses how open banking drives insurtech towards greater transparency and personalisation.
The need for digital innovation within the insurance industry is strongly felt by insurers themselves, with 86 per cent of experts surveyed by Accenture in 2020 claiming a need for rapid digitalisation to maintain a competitive advantage.
There are numerous ways in which open banking can help the industry to become more transparent and more personalised in its approach. Open banking enhances the user experience, speeds up automated insurance calculation, and reaches a wider audience of customers by providing them with products and services that are uniquely tailored to them.
Enhanced automation and a more data-driven approach
The focus of open banking is on secure financial data sharing, sourced from bank accounts and consensually communicated through a third party to improve services. Bank account information gathered through open banking is a treasure trove of invaluable data, that when placed in the right hands can be utilised to revolutionise the industry and provide the opportunity to create the ultimate customer-centric experience.
Data gathered through open banking provides deep insights into consumer and corporate behaviour and spending habits, which otherwise would be impossible for insurance companies to obtain. Data on proper car maintenance and property protection are just a couple of examples of data points that could be monitored by insurance firms when onboarding new clients and calculating pricing and creating personalised insurance policies. Detailed data analysis will improve decision-making and enable insurance experts to approach each situation on a case-by-case basis to be able to provide the most relevant service and create flexible solutions.
Data analytics can also allow companies to develop automated tools based on machine learning technology to help forecast clients’ future behaviour, automate workflows, streamline corporate processes, and decrease costs. It also creates a system that is boosted not only by data but also AI-powered data analysis rather than manual input and analytics, which enables the system to work continuously without needing consistent supervision, as long as in-built governance is implemented, additionally helping minimise the potential for human error and speeding up internal processes.
New business models for fairer conditions and lower risks
Approaching each insurance customer based on analysis of their financial data through open banking will lead to more accurate risk assessments, protecting the company, and creating insurance policies that more accurately represent risks posed by specific clients based on their individual data. Using open banking helps to evaluate customer validity, highlight red flags in their financial transactions and spot fraudulent activity. Risk assessments will no longer be focused on general guidelines based on demographic analysis but on specific individuals and their habits, behaviours, and financial data.
Established examples of insurance providers that operate on personalised approaches are already emerging. ByMiles is aimed at occasional and low-mileage drivers, deeming the more traditional approach to car insurance to be unfair to vehicle owners who seldom find themselves behind the wheel. Instead, ByMiles chose a pay-per-mile approach, with drivers only paying for the amount they’ve driven.
The company was actually the first insurtech provider in the UK to obtain an open banking licence and they have since started to experiment in using it for customer verification and scoring, as well as payments. Their CEO, James Blackham, has spoken out about open banking and has backed the notion of using open banking within insurance as a more transparent and flexible approach.
Lemonade is another great example of when insurance meets open banking. The insurer has taken a truly novel approach to its service, offering a fast and easy-to-use digital product that can be accessed 100 per cent digitally in seconds. The firm offers a wide range of different insurance services, including homeowners’ and pet insurance, and utilises open banking to create more personalised packages and integrations for their customers.
A look ahead
In February 2022, open banking reached 5 million users in the UK. There is no doubt that we are at a point where the practice will continue to establish itself as the must-have financial tech for businesses across all industries.
New business models and the enhanced level of automation and digitisation brought forth by open banking will benefit the insurance sector, speeding up processes and risk assessments. The change within the industry will bring long-lasting benefits to customers, who will have access to better and more diverse services and products, contributing to a more sustainable economy on the whole.
Klarna has unveiled a new branded business unit targeting financial services businesses. Klarna Kosma will harness the rapid growth of its open banking platform, which connects more than 15,000 banks across Europe and the US.
According to Klarna, Kosma provides simple access to more banks than any other open banking provider, cutting the time it takes new fintech services to reach global scale. It has more doubled the number of connected banks in the past year with Kosma processing close to a billion information requests to bank accounts each year.
Wilko Klaassen, VP at Klarna Kosma, said: “Over the past year, the demand for open banking services from financial institutions and fintech startups, has reached a tipping point, which is why we have built a dedicated business unit which brings together engineering, product management, sales and marketing all together in the same team to focus on this $15billion, fast-growing market.”
Kosma provides financial institutions, fintechs and merchants with the connecivity to build fintech apps and services by providing simple and secure access to 15,000 banks in 24 countries around the world through a single API.
Amsterdam-based startup FINOM has integrated with Klarna to create digital invoices that include a ‘Pay Now’ button which allows the payment directly from the invoice. Meanwhile, digital identity firm ZealiD uses Kosma to identify and validate consumer’s identity using an app.
“With Kosma we are opening up the power of our proprietary open banking platform and technology to banks, merchants and fintechs who share our dream of a world where consumers own their data and banks compete for customers by delivering value, not by locking in data,” said Yaron Shaer, CTO at Klarna.
Following the acquisition of direct bank-to-bank payment service SOFORT in 2014, Klarna has developed its open banking service, expanding it into 24 markets, and also begun to use open banking to power additional in-house services.
For example, Klarna now uses open banking to power Account Insight Services (AIS) which provide spending insights to millions of shoppers directly in the Klarna shopping app.
Special purpose acquisition company (SPAC) Spinnaker Acquisitions completed a reverse merger with LeakBot, UK based B2B Insurtech, to create Ondo InsurTech. This new entity will be the first Insurtech to go public in Britain. Ondo brought in about $4.5 million from investors, grossing a market capitalization of about $10.8 million. It will use the fresh capital for partner development, onboarding and improving its delivery and IT systems.
Home insurance is a large market with $107 billion of Gross Written Premium (GWP) in the markets where Ondo is operational. With little product differentiation, loss ratios (LR) tend to be high e.g. in the UK, average home insurance LR in 2020 was 52.4%. Of £4.8 billion of GWP, £2.5 billion in 2020 was paid in claims. Escape of water claims are among the top sources of claims in home insurance, costing insurers in Ondo’s existing markets over $17 billion annually.
The Internet of Things (IoT) device maker has a patented water security system that prevents small leaks from turning into insurance claims. The company claims the system is capable of delivering nearly 5% improvement in a typical LR. Its successes paved the way for international rollouts, motivated by the large market opportunities in UK, US and select Nordic countries.
Consequently, it has witnessed accelerating market traction with approximately 39,000 registered devices, +63% growth vs a year ago. Revenue at end-September 2021 was £0.94m with the last 6 months annualized revenue run-rate of £1.2m.
Ondo provides a cost-effective means for homeowners to detect small water leaks within a home, without the need for multiple sensors or complex, plumber-installed products. The patented technology is sensitive enough to detect water leaks as small as 3 ml per minute anywhere on a home’s water supply, by simply clipping the wireless device on the main water pipe. Its Thermi-Q technology works by detecting a slight drop in expected pipe temperature generated when a leak is present.
The intelligent algorithm is constantly running and protects homes by escalating damage and sending alerts in the event of unusual water flow, allowing homeowners to act swiftly. The technology is mostly provided free of charge to householders by home insurance companies and commands strong customer satisfaction, with a Trustpilot score of 4.8. By finding and fixing leaks, the device curtails insurance costs, saves water and prevents excessive waste of building materials.
The solution connects to the home wireless network and, if it detects a leak, alerts the customer via a mobile app. It provides access to a team of expert engineers to ‘find and fix’ the problem.
In February 2020, Hiscox became the first UK insurer to offer a free LeakBot device as standard to all new and existing home insurance customers. In the US, domestic water leaks account for more than a trillion gallons of wasted water every year. The damage caused by these leaks accounts for around 30% of the underwriting cost of a typical home insurance policy in the US and UK. Ondo now has several live partnerships with insurers such as Hiscox, TopDanmark, and Direct Line, across the UK, US, and Scandinavia. The solution is also available in Sweden with Länsförsäkringar, in Denmark via TopDanmark, and in the United States with SageSure and Mapfre.
IoT is one among fundamental trends underpinning digital transformations. It is at the forefront of bridging the digital and physical worlds, with benefits ranging from improving operations to the management of physical assets, and health and well-being.
The potential economic value that the IoT is expected to unlock is large, estimated to be $5.5-$12.6 trillion globally by 2030. Though IoT’s economic-value potential is concentrated in B2B settings (e.g. factories) with around 65 percent of the estimated IoT value potential by 2030, the value of B2C applications shows healthy growth with multiple ramifications for the insurtech industry.
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Have you ever played a game called Fintech Hot or Not? There are no right or wrong answers, you just yell out, “hot” or “not” in response to a fintech trend. The game works best when played with a captive, diverse audience, so I used the participants in my recent FinovateEurope Future of Fintech panel to gather their thoughts on a range of fintech trends.
Included in the panel were Radboud Vlaar, Founder and managing Partner at Finch Capital; Oliwia Berdak, VP & Research Director of Financial Services at Forrester; and Sam Kilmer, Managing Director of Fintech Advisory at Cornerstone Advisors. Ronit Ghose, Global Head of Banking, Fintech, and Digital Assets at Citi Global Insights was also in the panel discussion, but was not able to participate in the game for legal reasons.
In this version of the game, I asked the panel members if a trend was hot (or not) and I also asked if they would invest (or not) in a startup specializing in that trend. That’s because not only are some of the hottest trends not worth backing, but also some of the least popular themes in fintech may turn out to be the most profitable.
Below is the summary of the panel’s thoughts on what’s hot, what’s not, and what’s worth investing in.
Hot or not
Wholesale Central Bank Digital Currencies (CBDCs)
Buy now, pay later (BNPL)
Special purpose acquisition companies (SPACs)
Retail Central Bank Digital Currencies (CBDCs)
QR code payments
I expected more mixed reactions on BNPL, simply because there are so many companies leveraging this technology, and many are facing scrutiny for evading laws and encouraging consumers to take on too much debt.
Additionally, I was surprised at the very clear split between retail and wholesale CBDCs. Retail CBDCs, those designed to be available to the general public, were very clearly “not hot.” Instead, panelists were in favor of wholesale CBDCs, which are designed to be used among financial intermediaries.
As for trends in the “mixed” category, I would have expected both the metaverse and super apps to be labeled as “hot.”
Invest or not
QR Code payments
To be clear, the panelists were not putting down any money, but they were still cautious when deciding whether or not a trend was worth investing in. Each panelist was decisively not interested in the metaverse, web3, or super apps. They did, however, choose edge computing over quantum computing. And to my surprise, they were mixed on whether or not DeFi was worth the investment.
If you attended FinovateEurope, you can watch the full panel discussion in the on demand content section of the FinovateEurope ConnectMe platform for a limited time.
Discover announced today that IT consultancy IBM will shift the card provider’s core processes onto a hybrid cloud. IBM will help Discover automate and scale its digital financial solutions, Amir Arooni, chief information officer at Discover, said in the announcement. “As we accelerate our digital transition journey as a leading direct bank and payments company, […]
Canada’s fintech scene, which includes the thriving hubs of Toronto, Montreal, Calgary and Vancouver, is looking rosy after a strong 2021 that saw the highest-ever levels of fintech investment in the country. In round two of our two-part focus on ‘fintech in Canada’, we hear from 10 more fintechs making waves in the industry.
Canada’s role in the global fintech ecosystem is on the rise with 2021 a record year for fintech investment in the country. According to KPMG, fintech investment in Canada soared to almost $5billion in the first half of 2021, surpassing the previous annual record set in 2017. While data from one of Canada’s largest law firms, Fasken, revealed further funding successes in the second half of 2021 with a total of 77 venture capital-backed deals over 72 companies.
Canada has more than 1,200 fintech companies with Toronto its largest commercial hub. The innovation ecosystem in Toronto is supported by the region being the second largest financial centre, and having the highest concentration of financial services employment, in all of North America. Canada is also home to some of the largest banks, insurance firms, and asset managers in the world.
In addition, Toronto is North America’s fastest-growing tech market, adding more than 80,000 tech jobs in the past five years. Technology talent now comprises 10.2 per cent of total employment in Toronto, the third highest concentration in North America.
Canada is also globally recognised for its thriving artificial intelligence (AI) business environment, ranking fourth in the Global AI Index for its global competitiveness in AI implementation, innovation and investment.
“Fintech investment in Canada skyrocketed to almost $5billion in the first half of 2021, surpassing the previous annual record set in 2017.”
As well as rising investment, a growing number of strong ecosystem collaborations are expected to boost fintech growth, according to Accenture’s Canada Fintech Report 2021.
Canadian fintechs that picked up the status of ‘fintech unicorn’ in 2021 included multiplatform banking firm Wealthsimple, cloud banking company FreshBooks, regtech Trulioo, NFT firm Dapper Labs, Bitcoin miner Blockstream and e-commerce investor Clearco. Toronto-based fintech Koho is close to joining their $1billion unicorn ranks after bagging a $210million Series D financing in February this year.
Top fintechs from across Canada are part of a business mission to Frankfurt and Berlin, organised by Toronto Finance International, a public-private partnership which drives the growth and competitiveness of the financial services sector, and is also the lead voice for the promotion of the Toronto Financial Centre around the world. The delegation represents the diversity of Canadian fintechs marching towards global growth and rapid expansion across Europe.
Let’s meet 10 innovative Canadian fintechs and hear their plans for the year ahead.
Boss Insights is an award-winning open banking specialist, providing access to business customers’ financial data. It’s a single connection to accounting, commerce, payroll, tax and more, used by fintechs, private lenders and financial institutions to gain 36 per cent faster funding, five times faster monitoring & 60 per cent cost savings. Boss Insights has 1000+ APIs to gather SMBs’ financial data and a platform to originate, decision and monitor requests.
Boss Insights says: “Forbes highlighted Boss Insights for solving one of the hottest banking technologies trends: digital loan origination. With our platform and real-time financial data, fintechs and financial institutions have accelerated services to business clients and lower costs. We will build on this to show greater accuracy for business products including loans, funding, payments, credit cards and business insights.”
BlueRush is an emerging personalised video creation software as a service company that provides financial institution customers with personalised video marketing and sales capabilities. The IndiVideo platform lets customers add personalisation, calls to action and other dynamic elements to video assets hosted anywhere. BlueRush’s proprietary advanced templated system integrates easily with any video hosts, distributes videos to a wide audience cost-effectively and at scale, and also meets strict compliance, governance and data protection regulations.
BlueRush says: “We have recently partnered with Brightcove, a large video hosting and publishing platform and we are offering our IndiVideo for sales and marketing platform to Brightcove’s thousands of customers. With our recent raise, we will grow more partnerships and further enhance our IndiVideo for Sales features to close the gap in sales enablement for large financial institutions.”
impak Finance is an impact assessment and rating agency based in Europe and Canada whose mission is to help investors and lenders make more sustainable decisions by providing them with assessments that go beyond ESG and include both the negative and positive impacts of their assets. It combines technology and human expertise to provide the first 360 impact assessment which offers investors qualitative and quantitative standardised data.
Impak Finance says: “Ramping up our impak Analytics platform and integrated business intelligence (BI) software will allow for easy benchmarking of any piece of data against peers and across portfolios in addition to customisable thematic modules providing environmental and social data contextualisation.”
Peloton’s mission is simple: to make all payments simple and efficient. The Peloton Platform brings together card payments, domestic transfers, international transfers & FX into a single unified portal. Combine that with an e-commerce store, integration to QuickBooks and Xero and the ability to handle in-store and online transactions in the same portal and the unified payments solution gives users an all-in-one tool to handle their payments needs.
Peloton says: “We recently completed an equity crowdfunding campaign raising over $435,000. We’ll be using the funds to expand our team and continue to deliver innovative solutions to our partners. We’ll be working with neobanks and resellers to launch the platform internationally as well as help replace legacy systems within North America.”
Quantolio is a data-oriented software company that specialises in delivering data solutions to various customers in the financial services industry. Amine El Kaouachi founded the company in 2017 with a mission to transform the data to decision processes. Employing several specialists in the field of finance and computer science, Quantolio works with customers to write custom software to integrate into their workflow to assist in their decision process and specialises in leveraging cutting edge machine learning techniques.
Quantolio says: “We are currently expanding to make AI more accessible to more businesses around the world. In the coming months, Quantolio will be launching a data platform that will allow portfolio managers to make better rebalancing decisions. We are going through an expansion to bring more talent to the team in order to develop a series of products that encompasses their product catalog as of now.”
INETCO Systems Ltd
INETCO provides the payment industry with next generation solutions for real-time detection and blocking of payment fraud, insider fraud and advanced persistent threats; real-time detection and blocking of sophisticated DDoS and cyber threats existing solutions can’t detect; real-time analytics and data streaming; payment network operational monitoring. Sophisticated DDoS, BIN, terminal and other high velocity attacks are automatically detected and blocked without blocking or adding latency to legitimate transactions.
INETCO says: “After completing our growth equity round in Q2-2022, we are planning on doubling headcount to support the growth in INETCO BullzAI customers, working towards setting up additional satellite sales offices and continuing to develop our fraud and DDoS prevention capabilities including solutions to reduce a variety of fraud attacks in the growing crypto and NFT space.”
Blockchain Intelligence Group
Blockchain Intelligence Group – a subsidiary of BIGG Digital Assets – is a cryptocurrency investigation and compliance company. Banks, crypto companies, fintechs, and governments rely on its technology to investigate and risk-score crypto transactions. Blockchain Intelligence Group was the first company to provide crypto investigations and expert testimony in a court case. Since founded, its priority has been 100 per cent confidence in the data and insights it helps create.
Blockchain Intelligence Group says: “We launched the first Crypto Compliance Playbook for the US to support financial institutions and crypto startups. Similar guides are slated for other markets in Q2 2022. New capabilities and strategic partnerships are slated in Q2 and Q3 to help bolster client satisfaction, leadership, and differentiation.”
nanopay is a global payments technology company based in Toronto. It provides a platform for innovation that empowers banks and businesses to deliver new payment experiences for their clients. Built on next generation centralised ledger technology, the platform delivers a high level of performance and resilience. The technology was created by bringing together the most valuable characteristics of blockchain – security, tamper resistance and immutability, without giving up the low cost, scalability and ease of use of conventional databases.
nanopay says: “In the coming 12 months, we will continue to expand globally, signing new partnership deals with banks, neobanks, fintechs, and software companies delivering next generation solutions for their clients. Our customers can choose between a white label solution which requires little technical investment or API integration that provides a fully-integrated custom solution for their clients.”
MinervaAI is a modern deep-learning platform that automates real-time client risk assessment for KYC/onboarding and ongoing monitoring for AML/CFT. By instantly leveraging billions of pieces of open-source data, the MinervaAI solution delivers deeper, more effective risk assessment results. In less than 30 seconds, the solution performs in-depth screening and risk assessment, contemplating over 4.5 billion data points in 55 languages. Information is automatically processed, collapsed into a manageable list of high-confidence consensus clusters, and assembled into a single audit-proof investigation report.
MinervaAI says: “We constantly invest in our data, cultivating from global sources to make sure our customers have what they need and set the right thresholds for risk. We are also implementing an integrated identification verification capability in Q2 2022, which will allow our customers to automate onboarding and the ongoing sanctions screening and periodic review of their existing customers.”
Remitbee is one of Canada’s leading providers in online international money transfers and currency exchange with more than 100,000 users. As a fintech, Remitbee leverages advanced technology to improve its customers’ experience, putting its clients at the centre of everything project. It has developed a mobile and web platform that supports customers and is user-friendly to ensure customers always have a positive experience, allowing them to send money quickly, securely and at a low cost.
Remitbee says: “Our primary goal is to reduce the high fees of sending money by simplifying the traditional process with our mobile and web applications. We are also investing in research and development to capture the expected $10trillion market in the digital banking space. Our leadership has cultivated experience and in-depth industry knowledge to acquire the talents to make this happen.”
Driveway.com will be the first online auto dealer to offer real-time payments (RTP) to sellers, the result of a new partnership with U.S. Bank announced last week that leverages The Clearing House’s RTP Network. A pilot is currently underway with Driveway customers in the Portland area and will roll out to all customers after the […]
Goldman Sachs Asset Management is buying retirement planning and digital advice company NextCapital.
Goldman Sachs will integrate NextCapital’s platform into its Multi-Asset Solutions business, a group that offers custom, multi-asset portfolios.
Terms of the deal, which is expected to close in the latter half of this year, were not disclosed.
Goldman Sachs Asset Management has agreed to acquire retirement planning and digital advice company NextCapital in a transaction that is expected to close in the second half of this year.
Terms of the deal, which ranks among the top five asset management deals Goldman Sachs has ever done, were not disclosed.
Chicago-based NextCapital offers automated, digital retirement advice to help banks deliver personalized, customizable retirement planning and managed accounts through their clients’ workplace retirement plans and IRAs. Goldman Sachs, which already leverages NextCapital’s managed account platform to power its retirement program for SMBs, anticipates the purchase will expand its services by adding personalized, managed accounts, and digital advice.
By combining the two companies, Goldman Sachs will be able to provide services to large retirement plans while working with platform clients. As Goldman Sachs CEO David Solomon explained, “This acquisition furthers our strategic objective of building compelling client solutions in asset management and accelerating our investment in technology to serve the growing defined contribution market.”
After the deal closes, Goldman Sachs will integrate NextCapital’s platform into its Multi-Asset Solutions business, a group with approximately $220 billion in assets under supervision that offers custom, multi-asset portfolios. The NextCapital team will continue to operate from offices in Chicago.
Founded in 2014, NextCapital has raised $82 million. “Our vision for the future of the retirement savings market is aligned with the team at Goldman Sachs: technology that can create a differentiated experience combined with a strong culture and focus on clients forms a powerful offering for our clients and the individuals they serve,” said NextCapital CEO John Patterson. “We can leverage the resources of a global financial services firm to continue to scale our platform and offer it to new third party institutional clients and Goldman Sachs’ broader wealth management organization.”
Two Finovate alums, Backbase and Envestnet | Yodlee are teaming up to help financial institutions better serve their customers.
The collaboration will offer pre-built integrations with Envestnet | Yodlee’s Data Aggregation, Account Verification, and Transaction Data Enrichment solutions.
Both Backbase and Envestnet | Yodlee made their most recent Finovate appearances at FinovateFall in New York in September.
A newly announced partnership between Backbase and Envestnet | Yodlee will enable financial institutions to offer their customers a holistic view of their finances, as well as an improved customer experience. Specifically, the partnership will bring account data aggregation, account verification, and transaction data enrichment from Envestnet | Yodlee to the Backbase Engagement Banking platform. The move enhances Backbase’s financial wellness capabilities and intuitive customer journeys, and supports the company’s goal of becoming a category leader in the engagement banking platform space.
Backbase CPO Karan Oberoi called the collaboration a “major milestone” in the company’s efforts to “bring value to every step of the full customer lifecycle on a single, unified platform.” Oberoi highlighted the ability of the Backbase Engagement Banking platform to help financial institutions leverage technologies from innovative fintechs like Envestnet | Yodlee “while limiting implementation, procurement, and risk assessment time.”
Adding Account Data Aggregation to the platform will enable customers to combine and maintain all of their financial accounts in a single application. In addition to making it easier for customers to better understand their financial status, the feature also increases stickiness – as well as the potential for cross-selling opportunities – as customers spend more time on the bank’s app. Account Verification allows customers to add and verify their financial accounts in a single app without requiring the use of micro-deposits. Both KYC and AML compliance are also enhanced by the addition of the account verification capability. Lastly, by providing transaction data enrichment, the platform will lower the cost- of-serve for financial institutions and improve customer engagement.
“Entering into this strategic partnership with Backbase is another proof point on how industry leaders are relying on quality data, comprehensive coverage, and intelligent insights from Envestnet | Yodlee to meet fast-growing banking demands,” Envestnet Data and Analytics Group Head Farouk Ferchichi said.
Both multiple-time Finovate Best of Show winners, Backbase and Envestnet | Yodlee made their most recent appearances on the Finovate stage at FinovateFall in New York last September. Backbase demoed a customer onboarding solution that consolidates customer finances via direct deposit, billpay auto linking, and debit card account opening. Envestnet | Yodlee showed how Conversational AI technology can be deployed to deliver hyper-personalized financial insights and goals-based micro-savings applications.
The Partnership Fund for NYC and Accenture announced the 10 companies selected for the FinTech Innovation Lab New York, a preeminent accelerator program that connects startups with financial service firms like Goldman Sachs and BlackRock in a 12-week program.
The selected startups are going to accelerate product and business development through in-depth engagement with top financial services and venture capital executives. In addition, they will explore key topics – including ESG, security and cryptocurrencies – through the application of AI, cloud, blockchain and advanced data analytics.
The companies selected for the 2022 FinTech Innovation Lab are:
Coverforce (New York) – which partners with national property and casualty carriers to standardise their distribution application programming interfaces (APIs) and build customised platforms for independent agency networks, strengthening the carrier/agency relationship.
Draivn (Den Haag, Netherlands) – whose platform collects data from any telematics or internet of things devices that transportation fleets are equipped with and converts it into real-time analytics for fleet insurers and brokers.
Evercity (Berlin) – whose blockchain-based sustainability measurement and investment platform automates issuance, management and monitoring of sustainable finance.
Ion Channel (Alexandria, Virginia, USA) – whose software supply chain management platform identifies and monitors third-party security risk from software suppliers (vendors, outsourced app developers, contractors, and open source).
LeapXpert (New York) – whose platform creates an accessible digital record of all business interactions carried out over mobile messaging applications, giving organisations peace of mind that their data will be secure and meet compliance requirements.
Mark Labs (New York) – whose AI/ML stewardship platform helps asset managers define impact metrics, engage with investors and portfolio companies, and link their capital allocations to the pursuit of real-world ESG outcomes alongside targeted financial returns.
Messari (New York) – whose market intelligence platform provides in-depth crypto market research, analysis, data, diligence tools, and more for crypto business professionals.
Railz (Toronto) – whose API provides financial institutions and fintechs with instant, real-time access to their business customers’ financial data from different sources (accounting, banking, tax, eCommerce) to make better data-driven decisions.
SoLo Funds (Los Angeles) – whose on-demand marketplace allows members to request and fund loans for emergency needs, providing an equitable, community-driven lending alternative.
Straylight Systems (New York) – whose AI solution automatically creates secure software code that is trustworthy and reliable.
The Lab has helped position New York City as a hub for fintechs and financial innovation, and the solutions from this year’s participants can help the city emerge stronger as it looks to address the societal impacts of the covid-19 pandemic and be a leader in new tech industries.
“We are excited to see how this competitive class of fintechs and insurtechs will contribute to our city’s recovery and create a more inclusive and innovative economy,” said MariaGotsch, president and CEO of the Partnership Fund for New York City and co-founder of the FinTech Innovation Lab New York. “Over the past 12 years, the Lab’s alumni have enabled our financial institutions to improve the digital experience for customers, create products that support sustainability, enhance fraud detection tools and diversify the industry’s talent base. We thank our corporate and venture partners for their continued support to establish New York as the premiere city to set up and grow a startup.”
DavidTreat, a senior managing director at Accenture and co-chair of the FinTech Innovation Lab New York, said, “Fintechs continue to lead the way in transforming financial services, using innovative technologies to help reimagine the customer experience, harnessing data for enhanced decision-making and helping the industry address key societal issues, including improving ESG performance. We look forward to working with this year’s class to refine their solutions and unlock additional industry value.”
The Lab will conclude with the 10 companies delivering in-person presentations on their progress to executives across the banking, insurance, capital markets and venture capital sectors on June 23.
“The class of 2022 brings the best and brightest fintech ideas yet. We are looking forward to learning more about these founders, their teams and missions as we work together to bring innovative initiatives to the global financial sector,” said JeromeItty, chief operating officer at AXA XL–Americas.
“The insurance industry is on an essential journey to reshape the customer experience and prepare us for an increasingly digital world,” said ShekarPannala, vice president, Chubb Group and global chief information officer. “That journey requires continuous innovation from insurers, insurtechs and fintechs. Our partnership with the FinTech Innovation Lab supports startup companies that will accelerate future-proof technologies and help make our industry relevant, vibrant and competitive.”
“In these rapidly changing times, CreditSuissevalues more than ever the entrepreneurial ecosystem that the FinTech Innovation Lab nurtures for promising startups—startups that are creating the next generation of innovative solutions that will help address the complex and emerging needs of financial institutions,” said AdrianneKadzinski, group head of innovation at Credit Suisse.
“Innovation is essential to drive business growth, and strong partnerships in the fintech community play an important role,” said SeanManahan, head of technology business development at MorganStanley. “To that end, we are excited to continue our participation in the FinTech Innovation Lab program and help nurture and grow the next generation of New York’s fintech community.”
“As Prudential strives to solve the financial challenges of our changing world, we see innovation and technology as a key enabler,” said KjerstenMoody, chief data officer at Prudential Financial and FinTech Innovation Lab executive co-sponsor. “Many of this year’s FinTech Innovation Lab participants have potential to expand access to financial and insurance products which is inspiring to see. We look forward to supporting their work which will raise the bar across our industry.”
India’s government is considering a proposal from Russia to use a system developed by the Russian central bank for bilateral payments, according to people with knowledge of the matter, as the Asian nation seeks to buy oil and weapons from the sanctions-hit country.
The plan involves rupee-ruble-denominated payments using Russia’s messaging system SPFS, the people said, asking not to be identified discussing confidential deliberations. No final decision has been taken and the matter will probably be discussed when Russian Foreign Minister Sergei Lavrov arrives in India for a two-day visit Thursday.
Russian central bank officials are likely to visit India next week to discuss the details, the people said. The Reserve Bank of India regularly meets with executives from its banking system to discuss matters including exposure to Russia and the risk of sanctions, another person said.
A finance ministry spokesman wasn’t immediately available for comment. An email to the RBI wasn’t immediately answered.
India is keen to continue bilateral trade due to its dependency on Russian weapons and the prospect of buying cheaper oil as global prices surge. Prime Minister Narendra Modi’s government has been pushing back against pressure from Western nations by arguing that arms purchases from Russia are needed to counter China’s growing military assertiveness.
Under the proposal, rubles will be deposited into an Indian bank and converted into rupees and the same system will work in reverse, one of the people said. Undecided elements include whether the exchange rate will be fixed or floating.
“Prima facie this is a bilateral agreement for payments against goods and services movement between two countries,” said Indranil Pan, chief economist at Yes Bank Ltd. in Mumbai. “Therefore, there shouldn’t be any risk imperative in this deal.”
Russia also wants India to link its Unified Payments Interface with their MIR payments system for seamless use of cards issued by Indian and Russian banks after Visa Inc. and Mastercard Inc. suspended operations, one of the people said.
The U.S., along with the European Union, cut off seven Russian banks from SWIFT — the Belgium-based cross-border payment system operator — including state-controlled VTB, Bank Rossiya and Bank Otkritie. Following the sweeping sanctions, Russia has been looking for alternate mechanisms to continue its trade hit by its war in Ukraine.
India has not outright condemned Moscow’s attack on its neighbor, saying only that Russia and Ukraine should end hostilities and seek a diplomatic solution through dialog. However, New Delhi is under pressure from fellow members of the Quad grouping, which includes the U.S., Australia and Japan, to take a stronger stand against Russia as the U.S. and its allies try to isolate Moscow.
–By Shruti Srivastava and Vrishti Beniwal with assistance from Suvashree Ghosh (Bloomberg Mercury)