Expensify Tackles Wage Gap with New Initiative

https://finovate.com/expensify-tackles-wage-gap-with-new-initiative/

Pre-accounting platform Expensify is commemorating Martin Luther King Jr. Day with a creative way to fight injustice. The company will donate 25 cents for every dollar it pays its white male employees to its volunteer-led campaigns. The company estimates that this initiative – the product of “numerous internal conversations” among Expensify employees – will raise $3 million in 2021.

Dude fee? Bro tax? As Expensfy CEO and founder David Barrett explained, the calculation was made based on national gender pay gap data. “As part of our broader commitment to creating a world free of injustice, we’re using external data sources to determine our direct donations so it meaningfully reflects the types of fundamental and generational issues we’re trying to help solve.”

In the company’s announcement, Expensify Director Puneet Lath – a nine-year veteran of the firm- elaborated on the thinking behind the decision. Pointing out that members of some minority groups can earn as low as 75 cents on the dollar compared to white men doing the same work, Lath said this gap has contributed to systemic inequality and “unequal treatment in the workforce.” To this end, he said this specific funding approach “furthers our commitment to unwind systemic injustice throughout society.”

The engine of Expensify’s program is Expensify.org, which was launched last year to help facilitate charitable giving and volunteering. The onset of the COVID-19 crisis caused the organization to focus its efforts on hunger relief efforts, resulting in assistance to 5,000 low-income families by the end of 2020.

A Finovate alum for more than a decade, Expensify also participated in our developer’s conference, FinDEVr Silicon Valley. Founded in 2008 and headquartered in San Francisco, California, the receipt tracking and expense management app has more than 10 million users around the world.


Photo by fauxels from Pexels

https://finovate.com/expensify-tackles-wage-gap-with-new-initiative/

Grab Secures $300 Million Investment; A Look at Fintech in Latin America

https://finovate.com/grab-secures-300-million-investment-a-look-at-fintech-in-latin-america/

One of the greatest “How It Started” vs “How It Going” stories in international fintech these days continues to be the rise of Grab Financial, the spin-off from ride-hailing and food delivery company Grab. The Singapore-based company announced this week that it has secured more than $300 million in a round led by Hanwha Asset Management of South Korea. The investment, which also featured participation from K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures, gives the company an estimated valuation of $3 billion.

“We are at an inflection point in Southeast Asia,” Grab Financial Group senior managing director Reuben Lai said, “as the pandemic has accelerated the need for digital financial services that help us grow and protect our incomes.” The company reported that the new capital will help support the hiring of additional talent, as well as fuel expansion and the introduction of new products.

Among the recent accomplishments of Grab’s fintech division are a 40% gain in 2020 revenues, a 4x increase in users of its insurance distribution offering, and the launch of its first wealth management solution. Grab – as part of its consortium with Singtel – was also among the fortunate few to earn approval from the Monetary Authority of Singapore to launch a digital bank.


This week’s Finovate Global Reports features a fresh look at fintech in Latin America courtesy of EBANX annual Beyond Borders 2020/2021 study. The report looks at the impact of COVID-19 on cross-border e-commerce and payments trends in Latin America.

Among the key insights include the centrality of mobile in driving digital consumption of services as 4G becomes more widespread throughout the region. The report also suggests that Latin America has the potential to rival southeast Asia in terms of the growth of its e-commerce sector.


For our international Finovate Global Alumni Profile this week, here’s a look at ModularBank, a digital banking solution provider based in Estonia that raised €4 million in new funding this week. The company, which demoed its technology at FinovateEurope 2019 in London, offers a modern, API-based, banking-as-a-service solution to help businesses leverage new business models and gain competitive advantage.

“Increasingly, people are demanding more flexible and convenient services that fit around the way they work and live and in response, there is a wave of digitalization and embedded finance on the horizon, beginning to build,” explained Modularbank CEO Vilve Vene upon announcement of the company’s recent funding.

“To harness this momentum there is a real need for lean, yet sophisticated core banking technology … Modularbank was set up to enable banks and other customer-facing businesses to devise and roll out personalized banking services quickly and easily.”


Here is our look at fintech around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe


Photo by Artem Beliaikin from Pexels

https://finovate.com/grab-secures-300-million-investment-a-look-at-fintech-in-latin-america/

DriveWealth Acquires Institutional Broker Dealer

https://finovate.com/drivewealth-acquires-institutional-broker-dealer/

Brokerage infrastructure API provider DriveWealth announced this week it acquired Cuttone & Company, a New York-based institutional broker dealer. Terms of the deal were not disclosed.

DriveWealth has purchased Cuttone & Company specifically for its market and regulatory expertise and network of institutional trading partners. The New Jersey-based company will leverage this expertise to offer its own partners access to price discovery on its scalable, configurable, and redundant electronic trading infrastructure.

Ultimately, the acquisition will offer retail investors who trade fractional shares of U.S. equities via DriveWealth’s partners direct access to the point of sale for NYSE securities.

“These added resources, unprecedented transparency, and the ability to trade directly on the NYSE or across all U.S. equity destinations will open up greater opportunities for the retail investors we serve on our platform,” said DriveWealth Founder and CEO Bob Cortright. “Having notional trading technology connected to a flexible brokerage infrastructure allows investors to start small by investing in brands they know and care about. We’re proud to bring this new combination of Cuttone & Company’s institutional knowledge with our retail trading technology to become the most complete brokerage stack available to retail investors today.”

DriveWealth was founded in 2012 by Cortright and his co-founder Julie Coin. The company has raised a total of $100.8 million, including a $56.7 million DriveWealth closed last October.


Photo by Savvas Stavrinos from Pexels

https://finovate.com/drivewealth-acquires-institutional-broker-dealer/

Goldman Sachs Taps Marqeta to Power Checking Accounts for Marcus

https://finovate.com/goldman-sachs-taps-marqeta-to-power-checking-accounts-for-marcus/

Global card issuing platform Marqeta unveiled today that it has been tapped by Goldman Sachs to power checking accounts for its Marcus brand.

The new digital checking accounts will launch for Goldman’s Marcus clients later this year, though there is no word on the exact timing.

Goldman selected Marqeta for its open APIs and webhooks and its developer experience, which was designed to power future-proofed banking experiences. The two also have a prior relationship, as Goldman Sachs is one of Marqeta’s previous investors.

“We’re incredibly proud to work with Marcus by Goldman Sachs to help power this work, which we think is a true validation of the power of our technology,” said Marqeta Founder and CEO Jason Gardner. “Our modern card issuing platform helps digital innovators build the sorts of customer experiences that can be industry game changers, and we’re looking forward to working alongside Marcus to bring a powerful new digital banking experience to life.”

Marcus currently offers limited consumer banking tools, including savings, certificates of deposits, and loans. The bank also partnered with Apple in 2019 to serve as the banking partner behind the Apple credit card. Expanding into checking accounts will help Goldman Sachs diversify from its traditional investment banking offerings and move further into the everyday financial lives of consumers.

Goldman’s expansion into checking accounts comes as no surprise. The bank announced its intentions in February of last year. And the partnership with Marqeta is a logical one. The California-based company offers a tech-forward approach and counts fintechs such as Square and Klarna among its clients.

Should other banks– challenger banks and traditional banks alike– be worried? Jim Marous answers that question in his piece Marcus: A Digital Bank That Should Keep Rivals Up At Night. “In the future, the Marcus brand will only grow,” said Marous. “With the addition of wealth management and eventually checking accounts that are 100% supported by a mobile app, financial institutions of all sizes should take note of the potential for Goldman Sachs to be a major player in the marketplace. If banks and credit unions are not paying attention today (when there is time to react), there is a good chance Marcus will be the source of nightmares going forward.”

https://finovate.com/goldman-sachs-taps-marqeta-to-power-checking-accounts-for-marcus/

Neobank News: Upgrade Checks In; Revolut in the UK; Koho Hires New CTO

https://finovate.com/neobank-news-upgrade-checks-in-revolut-in-the-uk-koho-hires-new-cto/

Upgrade, the neobank launched by LendingClub founder Renaud Laplanche is celebrating the one-year anniversary of its flagship Upgrade Card – and a $5 million fundraising – with a new mobile checking account. Upgrade’s Unique Reward Checking Accounts offer 2% cash back on everyday and recurring expenses and 1% cash back on all other debit charges. Qualifying accountholders are eligible for up to 20% discounts on Upgrade loans.

“We asked our customers what would cause them to switch their primary checking account,” Laplanche said. “The overwhelming answer was attractive rewards on debit card purchases. While credit cards often provide decent rewards, it has been nearly impossible for consumers to earn a broad 2% cash back on debit charges.”

Upgrade’s Rewards Checking account, as well as all of the neobank’s banking services, are backed by Cross River Bank, chartered in New Jersey. Cross River founder, CEO, and chairman called the new accounts “everything mainstream consumers expect from a modern checking account with no fees, generous rewards, and access to affordable credit.”

The new offering comes as Upgrade enjoys strong adoption of its Upgrade Card, which offers access to installment financing online and at millions of points of sale via the Visa network. The company reported an annual rate of $1 billion in new credit lines already made available to consumers who are applying for Upgrade Cards or loans at a rate of more than one million a month.


Meanwhile in the wake of Brexit, European challenger bank Revolut is back in the market for a banking license in its home country. Revolut opted to secure its first banking license from the European Central Bank rather than pursue banking in the U.K. when anxieties over the future of a post-Brexit United Kingdom were at their peak. But now, with Brexit moving closer toward resolution, Revolut has returned with a bid to bring its digital banking services to the U.K.

“We want to be the best in class for customer experience, value and capabilities, and offering full bank accounts allows us to do just that,” Revolut founder and CEO Nik Storonsky said. “In the future, we want to offer many more innovative products to our UK customers and we are excited to continue driving innovation and competition in the banking industry. Becoming a fully licensed bank in the U.K. is a central pillar of that ambition.”


Toronto, Ontario-based challenger bank Koho announced this week that it has hired former Wayfair Director of Engineering Jonathan Klein as its new Chief Technology Officer. Klein takes over the CTO spot from Kris Hansen, who left the position back in August.

Founded in 2014 as the country’s first neobank, Koho has more than 120,000 accounts and reports $500 million in annualized transactions. The neobank offers full-service individual and joint bank accounts, along with a prepaid Visa card issued by People Trust Company. Koho has raised a total of $57.7 million in funding, most recently securing a $18.8 million Series B in the fall of 2019. Last year, Koho picked up an award for Best Prepaid Credit Card in Canada for 2021 from CreditCardGenius.


And for more from the neobank beat, check out our eulogy for Simple, the in-house challenger bank which was shuttered by BBVA after six years in operation.


Photo by Suzy Hazelwood from Pexels

https://finovate.com/neobank-news-upgrade-checks-in-revolut-in-the-uk-koho-hires-new-cto/

How Businesses Can Leverage Resilience to Thrive in the COVID-19 Era

https://finovate.com/how-businesses-can-leverage-resilience-to-thrive-in-the-covid-19-era/

How are businesses in financial services applying technologies like machine learning and AI? What obstacles and challenges remain for companies looking to deploy these technologies and how can these roadblocks be overcome? What does it mean for businesses to be “resilient” and why is “resilience” as important for businesses in today’s dynamic and uncertain times as “agility”?

We caught up with Jeff Fried, Director of Product Management for InterSystems, last week to address these and other critical questions for financial services companies in the COVID – and post-COVID – era. Fried was featured during our FinovateWest Digital conference last month, where he led a keynote address titled, “The 7 Steps to Using Machine Learning to Improve Your Business.”

For more insights from Jeff Fried into how businesses can make the most out of the current crisis, check out our feature Giving AI and Machine Learning the Business.


Photo by Jayden Burdick from Pexels

https://finovate.com/how-businesses-can-leverage-resilience-to-thrive-in-the-covid-19-era/

Five Things You Need to Know about Walmart’s Foray into Fintech

https://finovate.com/five-things-you-need-to-know-about-walmarts-foray-into-fintech/

The news that retail giant Walmart is turning its attention to fintech is an impressive reminder of how the industry has grown. What began as a land of incumbents defending itself from a siege of digitally-savvy disruptors has become more of an Age of Exploration, in which companies large and small compete for slices of an increasingly valuable and growing market for digital financial services.

What is Walmart doing?

Walmart announced on Monday that it is building a fintech startup that will “develop unique and affordable financial products for Walmart employees and customers.”

“For years, millions of customers have put their trust in Walmart to not only save them money when they shop with us but help them manage their financial needs. And they’ve made it clear they want more from us in the financial services arena,” Walmart U.S. president and CEO John Furner said. “We’re thrilled to work with Ribbit Capital in a new venture to help us deliver innovative and needed options to our customers and associates – with speed and at scale.”

The new entity will be majority-owned by Walmart, and the company has previewed a handful of future board members: Furner and Walmart CFO Brett Biggs.

Why are they doing it?

Walmart already offers financial services to its customers in the form of products like its prepaid debit solution, the Walmart MoneyCard, as well as its Walmart Credit Card, check cashing, and money transfer services. The big box retailer also offers consumer financing alternatives like buy now pay later, courtesy of its partnership with Affirm (which went public this week).

Creating a fintech arm or subsidiary would enable the retail giant potentially to offer a wide variety of additional services ranging from investment and wealth management, to insurance, lending, and banking.

Who is helping them?

Collaborating with Walmart in this new venture is Ribbit Capital, the venture capital firm behind Robinhood, Affirm, and Credit Karma. Walmart, in its statement, described the new company as a “strategic partnership” with the Palo Alto, California-based venture capital firm. Founded in 2012 by Meyer Malka, Ribbit Capital focuses on investments in early-stage companies and has an extensive portfolio of investments in fintechs, in particular. These ranks include – in addition to the companies noted above – such innovative fintechs as Revolut, Gusto, Coinbase, and Wealthfront (all Finovate alums, by the way).

“Walmart has a relationship with millions of customers and associates built on trust, security and integrity,” Malka said. “When we combine our deep knowledge of technology-driven financial businesses and our ability to move with speed with Walmart’s mission and reach, we can create and deliver financial offerings that are second to none.”

What’s the upside?

Given the current climate, the tougher challenge may lie in making the argument against Walmart’s flirtation with fintech. Given Walmart’s size and popularity – the company serves more than 265 million customers in 11,400 stores around the world every week – the company is in as good a position as any other retailer – short of Amazon perhaps – to make an impact on fintech wherever it decides to land.

That said, consumer financing and payments both appear on the surface to be the easiest ways for a Walmart fintech arm to make the biggest difference fastest. With regard to payments, as Barron’s observed, Walmart could leverage its ownership of India-based Flipkart. In the review, Barron’s quoted Bank of America analyst Robert Ohmes highlighted the monetization opportunities in financial services as a potential way for Walmart to secure “long-term profitability.”

What are the risks?

On the other hand, Walmart will need to be wary of “diversifying away its edge.” John Zolidis, president of Quo Vadis Capital warns of a potential loss of focus should Walmart aggressively pursue business opportunities away from its “core competency.” Zolidis noted further that the company’s primary customers may not be the earliest adopters of digital financial services, pointing out that nearly 25% of Walmart’s customers do not have a bank account, and 50% lack access to credit.

Then again, these may be exactly the sort of problems for which Walmart’s new fintech venture is a kind of solution.

https://finovate.com/five-things-you-need-to-know-about-walmarts-foray-into-fintech/

Blend Raises $300 Million for Mortgage and Consumer Banking Services

https://finovate.com/blend-raises-300-million-for-mortgage-and-consumer-banking-services/

Shortly after expanding its offerings to include consumer banking tools, fintech innovator Blend announced it has landed $300 million in new funding.

The series G financing round was led by Coatue and Tiger Global, and brings Blend’s total funding to $665 million. With the investment, Blend is also seeing its valuation nearly double to $3.3 billion, up from $1.7 billion just five months earlier.

In a blog post, company CEO Nima Ghamsari said that Blend will use the funds to fuel “aggressive plans” for this year. “We want to build the banking software infrastructure for the future,” said the CEO, “with an end-to-end digital experience for any consumer banking product and a complete homebuying and financing journey from start to close.”

Blend offers banks no-code, drag-and-drop workflows to help them customize the end user experience and launch new products quickly in response to consumer demand.

The company launched in 2012 with a focus on helping banks revamp the mortgage application process for consumers. Last September, Blend introduced a consumer banking suite, a set of tools to help banks focus on more than just the lending process. The suite includes modules to help banks launch their own deposit accounts, credit cards, personal loans, vehicle loans, and home equity line of credit offerings.

Last year, Blend facilitated $1.4 trillion in loans, more than double what it did in 2019. The company counts 285+ lender partners, which together are responsible for around 30% of all mortgage volume in the U.S. Partners include BMO Harris Bank, Navy Federal Credit Union, and Wells Fargo, which sees more than 75% of its mortgage applications submitted via its Blend-powered application tool.

In addition to growing its loan volume and client portfolio, Blend also grew its team. The company added more than 200 employees last year remotely via Zoom, a move that increased its team by more than 60%.

“Today’s news is just another step in Blend’s journey; we’re in it for the long haul, and we look forward to continuing to build the best lending and banking experiences for all,” said Ghamsari.


Photo by Jack Ward on Unsplash

https://finovate.com/blend-raises-300-million-for-mortgage-and-consumer-banking-services/

MX Raises $300 Million in Series C Funding; Becomes Fintech’s Latest Unicorn

https://finovate.com/mx-raises-300-million-in-series-c-funding-becomes-fintechs-latest-unicorn/

Some fintech observers may have gotten an inadvertent peek at the news yesterday. But today the big funding rumor has been confirmed: Less than a week after announcing its strategic partnership with fellow Finovate alum Hydrogen, money experience innovator MX is back in the fintech headlines with word of a $300 million fundraising.

TPG Growth led the round with a $150 million commitment. Also participating were existing investors CapitalG, Geodesic Capital, Greycroft, Canapi Ventures, Digital Garage, Point72 Ventures, Pelion Venture Partners, and Regions Financial Corporation. The Series C round takes MX’s total capital to $505 million and increases the firm’s valuation to $1.9 billion – making MX fintech’s latest unicorn.

In a statement, company CEO Ryan Caldwell said that in addition to hiring more talent, MX will use the capital to boost its platform’s data collection and enhancement capabilities. He specifically mentioned the importance of “scaling and finding additional ways to market” which underscores MX’s recent forays into embedded finance and its just-announced partnership with Hydrogen.

“The financial industry is at an inflection point as organizations look to become not only intermediaries, but true advocates for their customers by offering personalized insights and data-driven money experiences,” Caldwell explained. “Along with incredible partners, we are helping financial institutions and technology companies accelerate their digital roadmaps and launch next generation services and apps that will fundamentally transform how people interact with their money.”

MX helps businesses turn raw, unstructured data into valuable, insight-rich assets. This empowers them to build new solutions and services for their customers, drive growth, and boost brand loyalty. In addition to cleaning and categorizing data, MX’s technology adds key metadata that enables companies to better fight fraud, make faster loan approvals, and help their customers make better financial decisions.

In the funding announcement, Derek Zanutto of CapitalG praised MX’s ability to “leverage data strategically” and favorably compared MX’s potential impact on the financial industry to that of Netflix in the streaming content space and to Amazon in the e-commerce space. TPG Growth’s Mike Zappert noted that his firm was committed to investing in the digital transformation that is sweeping through financial services and sees MX as a big part of it. He called MX’s technology “a clear differentiator” that has delivered “tremendous growth for the Company over the last 12 months.”

MX currently works with more than 2,000 banks, credit unions, fintechs, and other companies, and includes 85% of digital banking providers among its partners. This has given the Lehi, Utah-based company a combined reach of more than 200 million consumers. A multiple Finovate Best of Show winner, MX last demonstrated its technology at FinovateFall 2019.

https://finovate.com/mx-raises-300-million-in-series-c-funding-becomes-fintechs-latest-unicorn/

SoFi, SPACs, and the Power of Social Capital

https://finovate.com/sofi-spac-and-the-power-of-social-capital/

First things first: congratulations to SoFi. The financial services platform has earned a $8.65 billion post-money valuation after agreeing to a merger with Social Capital Hedosophia Holdings, a publicly traded special purpose acquisition company or SPAC that specializes in consumer-focused fintech businesses.

Now, what in the world is a SPAC? And why would merging with one be a sound route to the public markets?

A SPAC is pretty much as described. It is a corporation that is built specifically to buy other corporations. A SPAC, which has no other business operations, works by raising money via an initial public offering, and then using that capital to acquire other companies. These entities are taking advantage of the contemporary interest in the IPO market, leveraging demand for new companies – mostly in technology – into demand for firms betting on the ability to know which among these companies are longer-term winners.

The decision to merge with Social Capital – and to pursue this new route to going public – says a lot about the company initially known as “Social Finance” when it was founded almost ten years ago.

“SoFi is on a mission to help people achieve financial independence to realize their ambitions,” company CEO Anthony Noto said. “Our ecosystem of products, rewards, and membership benefits all work together to help our members get their money right.”

By giving its members a one-stop-digital-shop for financial services such as consumer financing, investments, and insurance, SoFi is well-positioned to take advantage of what Noto called “the secular acceleration in digital first financial services offerings.”

This momentum is in evidence within SoFi’s own ecosystem, as well. Social Capital founder and CEO Chamath Palihapitiya noted the “acceleration of cross-buying by existing SoFi members” as creating “a virtual cycle of compounding growth, diversified revenue, and high profitability.”

Speaking on CNBC, Palihapitiya compared SoFi favorably to Amazon and said that the company best represented the kind of banking solutions people want most. From its origins as a student loan refinancing company to its current incarnation as a diversified financial services platform, SoFi reported more than $200 million in total net revenue in Q3 2020 and is on pace generate $1 billion of estimated adjusted net revenue this year. Noto will continue as CEO of SoFi post-merger.

The deal comes just months after SoFi earned “preliminary, conditional approval” from the U.S. Comptroller of the Currency for a national bank charter. A bank charter, the company noted in the merger announcement, would lower the cost of funds and “further support SoFi’s growth.” In an interview with Yahoo! Finance, Noto explained that this was key to having the ability to provide lower interest rates to consumers and would drive innovations like SoFi Money, the company’s cash management account.

Another plum in the purchase is Galileo, a leading provider of customer-facing and backend technology infrastructure services for financial services providers that SoFi acquired last April. There are 50 million accounts on the platform.

From SoFi’s perspective, “deal certainty” was one of the reasons why the company took advantage of the SPAC route to the public markets rather than a traditional IPO. Palihapitiya is a veteran of the nascent SPAC craze, having taken a number of companies, including Virgin Galactic Holdings in 2019, public in this fashion.

Founded in 2011, the San Francisco, California-based company participated in our developers conference, FinDEVr New York 2017. At the event, SoFi teamed up with data platform Quovo to demonstrate their innovations in providing secure authentication for bank accounts. SoFi currently has more than 1.8 million members and has raised $2.5 billion in funding to date.

https://finovate.com/sofi-spac-and-the-power-of-social-capital/

A Helpful Guide for Nonprofit and Fintech Partnerships

https://finovate.com/a-helpful-guide-for-nonprofit-and-fintech-partnerships/

This is a guest post written by Shannon Flynn, managing editor at ReHack.com.

Financial tech and nonprofits have an opportunity to build partnerships and make the world a better place. If fintech companies want to work with nonprofits, they must establish trust and clearly outline the benefits of collaborating for the greater good.

Households in the United States are generous. According to National Philanthropic Trust, Americans gave $449.64 billion to various charities in 2019. However, people are increasingly demanding that the giving be easy and intuitive, which brings fintech into play. Even the way nonprofits manage the funds donated to them is changing.

Examples of fintech companies include Lending Club, Kabbage and Stripe. Meshing fintech and charity isn’t always an obvious choice. However, nonprofit technology is on the rise, and organizations benefit greatly from some of the advantages these brands bring to the table. Here are some of the benefits of fintech charity partnerships.

How Fintech and Charity Work Together

There is a growing move toward non-cash payments in charitable giving. Forbes reports in countries such as Sweden, cash-based payments make up 13% of transactions. This can impact traditional fundraising efforts, such as in-person collection baskets.

Fintech advances in the last decade have made it much easier for people to participate in charitable giving. There are numerous ways nonprofit technology helps organizations raise money. Rather than an in-person fundraising push, organizations raise money via social media and email campaigns. Not to mention philanthropies saw an increase in virtual fundraising campaigns in 2020, boosting the need for online financial services and resources at an unprecedented rate.

Nonprofits can only thrive because of the generosity of patrons and local businesses. A fintech business can team up with a charity, and both can develop stronger community relationships as a result. Individuals who support the organization will look to partner companies for their own fintech solutions. The charity benefits from gaining access to the business’s software for easier donations and tracking funds.

Nonprofit Technology Advances

The M + R Online Giving Benchmark Study found that online revenue grew about 10% in 2019. Facebook alone made up around 3.5% of online giving, with much of it occurring on Giving Tuesday.

In addition to ramping up the ways people give to nonprofits, financial management has gone into the cloud. Rather than keeping a paper book, nearly every organization uses some type of accounting software and big data to track giving and donors and figure out ways to increase revenue from year to year.

Benefits of Teaming Up

There are numerous benefits to fintech and charity partnerships. While some are quite obvious, others are more subtle.

More Exposure

When two companies team up, they both gain access to one another’s customer lists. For example, if a business offers an online payment gateway and it teams up with a local charity, it might send out a press release. Simply gaining exposure may bring in more donations for the nonprofit.

They also will let their members know they are using a partner’s payment system. If the software is donated, the nonprofit will offer a thank you. Some of its patrons are likely business owners who may need services. By working together, the charity and company both expand their reach.

In a study by Omnicom Group’s Cone Communications, researchers found 83% of millennials felt loyal to companies helping them contribute to causes. A partnership helps both the fintech firm and the non-profit organization.

Financial Help

Some fintech companies throw their financial support behind an organization. They offer technology advantages and also come alongside them to raise money for the cause. Businesses should care about the purpose of the charity it supports. It should tie into the company’s philosophy and help advance its own goals. Any donations can likely be written off on taxes while helping a local group.

Testing Systems

Offering software at no cost allows businesses to try out new features and work through bugs. Part of the agreement can be that it provides the nonprofit with updates first, and they’ll report issues so the company can fix them. They get the program for free, and the business receives instant feedback on what works and what needs tweaking.

Better Tracking

Most fintech companies offer better tracking features for all types of businesses. Charities will be on top of where donor funds go and if they’re being used wisely. When people give to an organization, they expect them to be good stewards of that generosity. With the right programs, the nonprofit can run reports and know in an instant how money gets spent and if they are actually making the difference they promised.

Fintech Charity Partnerships Can Improve Performance

When it comes to making a difference in the world, improved performance enhances productivity and allows volunteers to do more than they ever thought possible. Technology allows people to stay on top of tasks and ensure cash flow is never an issue. By working together, fintech and nonprofits can make a huge difference in the lives of those they serve.

Shannon Flynn is a technology and culture writer with two plus years of experience writing about consumer trends and tech news.

https://finovate.com/a-helpful-guide-for-nonprofit-and-fintech-partnerships/

The OCC OKs Stablecoins: What Does that Mean for Banks?

https://finovate.com/the-occ-oks-stablecoins-what-does-that-mean-for-banks/

You’ve finally perfected your digital transformation strategy
that was accelerated because of 2020’s global pandemic. What
should you focus on now? Here’s an idea: stablecoin
transactions.

The U.S. Office of the Comptroller of the Currency (OCC) last
week published
Interpretive Letter 1174
detailing that banks may use
stablecoins and independent node verification networks (INVNs) to
facilitate payments for customers. That is to say, banks can
transfer stablecoins to other banks.

To catch you up to speed, INVS are distributed ledgers. And
stablecoins are a type of cryptocurrency that minimize volatility
by pegging their value to an external factor.

There are a few key things this means for traditional financial
institutions.

Transactions become decentralized

Stablecoin transactions are essentially decentralized
cryptocurrency transactions. Because of this, they enable banks to
send and receive money without a government intermediary.

Faster payments

Stablecoin transactions do not rely on traditional payments
rails, rather, they utilize public blockchains. Because of this,
stablecoins, just like other cryptocurrencies can be transferred in
near-real time from one party to the next.

On 24/7

Once again citing freedom from traditional payment rails,
because stablecoin transactions occur outside of the traditional
payments infrastructure– and because they occur instantly– they
can essentially be made at any time, including on the weekends and
holidays.

Compliance is still on the table

According to the letter, stablecoin transactions, “should have
the capability to obtain and verify the identity of all transacting
parties, including those using unhosted wallets.” So banks are
still responsible to adhere to KYC guidelines.

Additionally, banks using stablecoin transactions are
responsible for managing the multiple risks associated with
cryptocurrency transactions. Per the letter, “The stablecoin
arrangement should have appropriate systems, controls, and
practices in place to manage these risks, including to safeguard
reserve assets. Strong reserve management practices include
ensuring a 1:1 reserve ratio and adequate financial resources to
absorb losses and meet liquidity needs.”

This is positive news not only because it offers banks more
options, but also because it serves as a signal that the OCC and
the Acting Comptroller of the Currency Brian Brooks are bullish on
cryptocurrencies.

Pay attention to the cryptocurrency/stablecoin sector this year.
We’re expecting to see significant developments in the
decentralized finance area, and banks’ involvement in initial
cryptocurrency efforts will be crucial. There will be little-to-no
room for laggards in this space.

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https://finovate.com/the-occ-oks-stablecoins-what-does-that-mean-for-banks/

Equifax to Buy Digital Identity Player Kount

https://finovate.com/equifax-to-buy-digital-identity-player-kount/

Data and analytics company Equifax announced its acquisition of digital identity player Kount this week. The deal, which is pending regulatory approval, is set to close for $640 million in the first quarter of this year.

Kount was founded in 2007 and offers a range of products and solutions, including chargeback protection, account takeover and bot protection, ecommerce fraud protection, and friendly fraud prevention. The company’s identity network, the Kount Identity Trust Global Network, leverages AI to link trust and fraud data from 32 billion digital interactions, 17 billion devices, and five billion annual transactions across 200 countries and territories. 

All of Kount’s products will be integrated into Equifax’s Luminate Platform, a fraud platform that combines the company’s solutions with machine learning to give clients the information they need to make better decisions about fraud.

Kount has more than 9,000 clients across the globe, including Barclays, Staples, PetSmart, and Chase. Equifax anticipates the purchase will expand its global prevalence in digital identity and fraud prevention solutions.

“The acquisition of Kount will expand Equifax’s differentiated data assets to bring global businesses the information and solutions they need to establish identity trust online,” said Equifax CEO Mark W. Begor. “Equifax is taking advantage of our strong 2020 outperformance and cash generation to make this strategic acquisition. Our data and technology cloud investments allow us to quickly and aggressively integrate new data and analytics assets like Kount into our global capabilities and bring new market leading products and solutions to our customers.”

Kount employees will continue to work from the company’s headquarters location in Boise, Idaho, and will join Equifax’s U.S. workforce.


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https://finovate.com/equifax-to-buy-digital-identity-player-kount/

Modularbank Secures €4 Million in New Funding

https://finovate.com/modularbank-secures-4-million-in-new-funding/

Digital banking platform Modularbank has secured a $4.8 million (€4 million) investment in a round led by Karma Ventures and Blackfit Capital Partners. The company, founded in 2018 and headquartered in Estonia, said that the seed funding will help it establish operations in the U.K., as well as add engineering and product development talent to meet its expansion goals.

Modularbank’s banking-as-a-service technology leverages APIs and microservice architecture to offer a core banking solution to serve both retail and business banking customers. And because Modularbank is, in fact, modular, companies can select the specific services they want – core banking, deposits and savings accounts, assets and collateral, lending, financial accounting, and payments – to build the solution that best fits their needs.

“Increasingly, people are demanding more flexible and convenient services that fit around the way they work and live and in response, there is a wave of digitalization and embedded finance on the horizon, beginning to build,” Modularbank CEO Vilve Vene explained. “To harness this momentum there is a real need for lean, yet sophisticated core banking technology and that’s where Modularbank comes in, as we do exactly that. Modularbank was set up to enable banks and other customer-facing businesses to devise and roll out personalized banking services quickly and easily.”

Also participating in the round were Plug and Play Ventures, Siena Capital, and Ott Kaukver, angel investor and former CTO of Twilio and Skype.

Modularbank made its Finovate debut at FinovateEurope in 2019. Since then, the company has collaborated with Germany’s Senacor Technologies and announced a strategic partnership with payments processor NETS Estonia. In December, Vene was named one of the most impressive women in fintech in 2020 by Fintech Futures.


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https://finovate.com/modularbank-secures-4-million-in-new-funding/

A Simple Eulogy

https://finovate.com/a-simple-eulogy/

You’ve likely heard that BBVA has decided to shutter Simple, its in-house challenger bank. Yesterday, the company sent an email to accountholders stating, “BBVA USA has made the strategic decision to close Simple.”

The reactions across fintech are mixed– some say they’re not surprised, and others have expressed more nostalgia than anything.

Those who aren’t surprised cite PNC’s recent acquisition agreement with BBVA. The two may have been trying to streamline their businesses in order to minimize duplication of market coverage and services. There’s also the fact that competition in the challenger bank space is hotter than ever, and it doesn’t make sense for BBVA (or PNC, for that matter) to try to keep up with the marketing spend that others such as Chime have shelled out to acquire customers.

Since this is a eulogy, however, I’ll focus on the nostalgia. Simple was founded in 2009 as BankSimple and quickly became one of the top pioneers in the challenger banking space. I like to think of Simple as the grandfather of challenger banks (perhaps the grandmother is Moven, which closed its B2C model last year).

Simple was ahead of its time in focusing on the millennial client base that is untrusting of banks and prefers a straightforward, transparent approach. The bank also offered features that were unique at the time, such as geolocation via an integration with Google maps for every transaction, instant purchase notifications, and a “safe to spend” balance that indicated the user’s discretionary spending balance.

The bank’s young, Portland, Oregon-based staff were consistently quirky and upbeat on customer service phone calls. Simple maintained this culture even after BBVA acquired it in 2014.

Does anyone remember Simple’s catchphrase when it launched? “We don’t suck.” Hopefully the new generation of challenger banks will keep this mantra in mind as they work on creating the new wave of consumer-first banking technology.

As for what’s next, Simple’s email to clients went on to detail what to expect, stating, “In the future, your Simple account will become exclusively serviced by BBVA USA, but until then you can continue to access your account and your money through the Simple app or online at simple.com. You will receive additional information in the near future about the transition of your account servicing to BBVA USA.”

So long, Simple, you will be missed.

https://finovate.com/a-simple-eulogy/

India’s CRED Raises $81 Million; Germany’s N26 Expands to Brazil

https://finovate.com/indias-cred-raises-81-million-germanys-n26-expands-to-brazil/

CRED, a credit card repayment company based in Bangalore, India, has scored $81 million in funding courtesy of a Series C round announced earlier this week. Led by existing investor DST Global, the investment featured the participation of Sequoia Capital, Ribbit Capital, Tiger Global, and General Catalyst, and gives the company a valuation of $806 million.

The company’s founder Kunal Shah said in a statement that the funds would help support CRED’s growth and added that CRED is committed to providing wealth-creation opportunities for its employees, as well. Shah said that the company has allocated 10% of its cap table for ESOPs (employee stock ownership plans).

CRED processes a fifth of all credit card bill payments in India. The membership-based company rewards those who pay via CRED with CRED coins that can be used to win exclusive rewards or to earn access to curated products and services. More than 35% of premium credit card holders in the country use CRED, which has seen its overall user base climb to more than 5.9 million users. The company also benefits from creditworthy borrowers – the median credit core for CRED users is 830. CRED members reportedly spend on average 2x the amount of the average CRED user.


For some, news that German digital bank N26 was entering the increasingly competitive challenger banking market in Brazil was met with a loud “it’s about time!” The neobank, which previewed its intentions to launch operations in Brazil back in 2019, may have been temporarily wrong-footed by the twin complications of Brexit and COVID-19. But the news this week suggests that the firm is back on track with its Latin American expansion plans – and a showdown with Nubank.

Not only is Nubank the home team when it comes to neobanking in Brazil, the institution is also the biggest challenger bank in the world in terms of customers and valuation (25 million of the former, $10 billion of the latter). This compares favorably with N26’s five million customers and valuation of approximately $3.5 billion. That said, the Berlin-based challenger bank has significant wind at its back, having just celebrated the one-year anniversary of its arrival in the U.S. back in August and, more recently, locking in $100 million in one of the largest funding rounds of 2020.


Here is our look at fintech around the world.

Central and Eastern Europe

  • Berlin, Germany-based Mambu raises $135 million in new funding.
  • Russian bank Tinkoff announces that its voice assistant is now available as both Oleg (male) and Olya (female).
  • PYMNTS.com features Toms Niparts, CEO of Jeff, an app-based lending platform headquartered in Latvia.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

  • Bank of Jamaica announces plan to regulate electronic retail PSPs as part of strategy to boost the country’s $4 billion e-payments business.
  • German digital bank N26 picks up banking license from the Brazilian central bank.
  • Critics have called a new regulation in Mexico that bars third-parties from using platforms or APIs to offer financial services directly “a death sentence” for the fintech-as-a-service model in the country.

Asia-Pacific

Sub-Saharan Africa


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https://finovate.com/indias-cred-raises-81-million-germanys-n26-expands-to-brazil/

Glia Lands $78 Million in Series C Funding

https://finovate.com/glia-lands-78-million-in-series-c-funding/

In a round led by existing investor Insight Partners, multi-channel digital customer experience specialist Glia has raised $78 million in capital. The Series C round takes the company’s total funding to $107 million, and will be used to help scale the company’s digital customer service offerings with an emphasis on product development and an eye toward potential strategic acquisitions.

“Just as Zoom has transformed the way consumers communicate with colleagues, family and friends, Digital Customer Service is changing the way businesses support and engage with customers,” Glia co-founder and CEO Dan Michaeli explained. “This is an area that has gone mainstream, as evidenced by Facebooks’s recent billion-dollar acquisition of Kustomer.”

Glia’s fundraising comes as the company reports growth of more than 150% in 2020. This is due in part to the impact of COVID-19 related lockdowns and Work From Home policies that drove consumers and employees alike toward digital channels for commerce and work. Glia’s platform enables customers to communicate with businesses using any channel – voice, text, video – and to seamlessly transition between those channels during the interaction. The technology allows customer service representatives to guide customer journeys, increasing personalization and efficiency and boosting customer satisfaction and retention rates.

Insight Partners Lonne Jaffe praised Glia’s platform for providing the tools required for businesses to engage customers digitally and “communicate through the customer’s channel of choice.” Dan Brown, founder and CEO of Interactive Intelligence, who also participated in this week’s investment, added that Glia represents a solution for companies that are “still focused on moving antiquated, on-premises telephony systems to cloud contact centers that essentially offer the same functionality.” Brown added that if he were to build his company again today, “I would take Glia’s approach.”

Founded in 2012 and headquartered in New York, Glia last demonstrated its digital customer service technology at FinovateWest Digital 2020, earning Best of Show honors. Formerly known as SaleMove, Glia has teamed up with more than 150 financial institutions, insurance companies, and fintechs, most recently partnering with intelligent virtual assistant company Interface, and fellow Finovate alum and AI-powered chatbot developer, Finn AI.


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https://finovate.com/glia-lands-78-million-in-series-c-funding/

Fintech’s Challenge: Enabling Technology to Empower Humanity

https://finovate.com/fintechs-challenge-enabling-technology-to-empower-humanity/

Our keynote speaker series has been a major feature in the transformation of Finovate from a demo-only showcase to its current incarnation as a digital-friendly, intellectual marketplace for fintech insight and thought leadership, as well.

With a new set of digital and in-person events planned for 2021, we wanted to take a quick look back at some of the speakers who have provided some of the most unique insights into the nexus of finance, technology, and society over the past year. Stay tuned for big announcements this month on what we’ve got in store!


Steven Van Belleghem, author of Customers The Day After Tomorrow

Providing a special address at FinovateEurope just over a year ago, Belleghem took attendees on a fun and insightful journey that looked at how enabling technologies – from 4G and social media – have forced businesses to reconsider the nature of customer service. And with even more powerful enabling technologies like quantum computing and AI right around the corner, he suggested further disruptions to and opportunities in the relationship between customers, businesses, and the products and services they provide are almost assured.

Interestingly, Belleghem points to a new relationship – B2A or business-to-assistant – that will actually make it easier for all parties to negotiate this new, more personalized, but more complex and challenging e-commerce experience. But even as he sees the consumer taking a less active role in everyday financial decision-making, Belleghem still sees human nature behind the wheel. “It’s not going to just be technology that drives new customer expectations,” he said, “it is also going to be personal dreams and wishes, and also the challenges the world will be facing.”


Pablos Holman, Futurist, Founder of Turing AI

“Please crawl out your window,” folk singer Bob Dylan once crooned. “Use your arms and legs, they won’t ruin you.” A similar sentiment was at the center of the keynote address by futurist and founder of Turing AI, Pablos Holman. Speaking at our first all-digital fintech conference, FinovateFall Digital, back in September, Holman urged his audience to focus on solutions to real problems and to avoid the comfort zone of the tried and true. “Nobody has ever invented a new technology by reading the directions,” Holman noted.

For fintechs specifically, Holman – who is also an Inventor with the Intellectual Ventures Lab – urges two strategies. First he encourages startups to see bank partnerships as a way to understand more clearly the needs of financial institutions and their customers. Second, Holman bluntly recommends “running a lot of experiments” to ensure that you remain open to often-overlooked solutions that might actually work best.


Nancy Giordano, strategic futurist and TEDx curator

In her keynote opening address at FinovateWest Digital, Navigating the Big Shift – How Exponential Technologies are Changing … Everything, Nancy Giordano highlighted the fact that as we are struggling to keep up with rapid technological change, we must be vigilant to the pitfalls of becoming paralyzed in the face of it.

For businesses, the strategic futurist cautions against the temptation to “not make decisions,” encouraging them instead to be readier to “act dynamically” in the face of uncertainty. A little over a generation ago, it was the political that became personal. Increasingly, Giordano observed, it is the professional that is becoming personal. And technology is playing a major part in making this happen.


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https://finovate.com/fintechs-challenge-enabling-technology-to-empower-humanity/

Mambu’s Valuation Soars to Over $2 Billion After $135 Million Investment

https://finovate.com/mambus-valuation-soars-to-over-2-billion-after-135-million-investment/

SaaS banking platform Mambu is even more prepared to support the banking-as-a service trend that’s sweeping the fintech industry. That’s because the Germany-based company received $135 million (€110 million) in new funding this week.

The investment was led by TCV, followed by new contributors Tiger Global and Arena Holdings and existing investors Bessemer Venture Partners, Runa Capital, and Acton Capital Partners. TCV General Partner, John Doran, will join Mambu’s board of directors.

The company also disclosed a new valuation of more than $2 billion (€1.7 billion), which places it in the fintech unicorn club (two-times over!).

Mambu will use the funds to accelerate growth and boost its presence across the globe. Specifically, the company announced intentions to deepen its footprint in Brazil, Japan, and the U.S.

“As an increasing number of challenger and established banks sign on to prepare themselves to thrive in the fintech era, we have, and will continue to provide them with a world-class platform on which to build modern, agile customer-centric businesses,” said Mambu CEO and Co-founder Eugene Danilkis. “This latest funding round allows us to accelerate our mission to make banking better for a billion people around the world and address one of the largest, most complex global market opportunities that’s still in the infancy of cloud.”

Mambu was founded in 2011 and emerged as one of the pioneering players to move banking software to the cloud. Since then, the company has seen success from its concept of composable banking that allows clients to build a banking experience to suit their needs without being tied to a specific vendor, product, or technology. This shift away from legacy core banking platforms, along with plug-and-play integrations, helps banks future-proof their systems to better serve their customers. Among Mambu’s customers are ABN AMRO, N26, OakNorth, Orange, and Santander.

Today’s news comes after a strong period of growth for Mambu. The company has seen around 100% YoY growth and is planning to support it by doubling its team to more than 1,000 by next year.


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https://finovate.com/mambus-valuation-soars-to-over-2-billion-after-135-million-investment/

CSI Helps Black-Owned Citizens Savings Bank and Trust Go Digital

https://finovate.com/csi-helps-black-owned-citizens-savings-bank-and-trust-go-digital/

Citizens Savings Bank and Trust, the oldest African-American-owned bank in the U.S., is the latest regional FI to partner with Computer Services Inc. (CSI) in order to offer its customers a range of digital banking services.

“We always want to honor and cherish the history and legacy we have, but we must also lead our team and our organization toward the future,” Citizens Bank president and CEO Sergio Ora said. “We can be very committed and passionate about our vision and mission, but in order for us to help people develop financial independence and wealth equality, we must have the resources and technology. CSI will play (an) integral role in giving us that.”

Founded in 1904 by a trio of African-Americans in Nashville, Tennessee, the originally-named One-Cent Savings Bank and Trust Company was dedicated to serving black Americans in the wake of the Civil War and, more directly, the collapse of Reconstruction. Still serving the community over 100 years later as the oldest, continuously operating African-American-owned bank in the U.S., the firm changed its name to Citizens Savings Bank & Trust in 1920. By 1946, the bank had reached $1 million in capital and deposits and, by 2014 arrived at its goal of $100 million in assets.

“For more than 100 years, Citizens Bank has never faltered in its mission to provide financial opportunity to individuals and communities who have been overlooked and underserved,” David Culbertson, president and COO of CSI, said. “We are honored that this important and vibrant institution chose CSI to deliver innovative solutions that will help its customers grow wealth, solidify their businesses and make their dreams come true.”

Citizens Bank will deploy Computer Services’ core banking platform NuPoint. The solution was cited last year in Aite Group’s core vendor report and praised for its “excellence in user experience” and ability to improve internal reporting. “CSI’s newly redesigned core banking platform … stands out from its competition as a result of its modern look and feel, graphics, and innovative way of displaying banking relationships,” Aite Group senior analyst David Albertazzi said last spring.

Headquartered in neighboring Kentucky and founded in 1965, Computer Services Inc. provides digital banking, cybersecurity and IT, and regulatory compliance solutions to financial institutions and corporations around the world. Last month, CSI teamed up with Finovate alum Featurespace to launch a new anti-money laundering solution, WatchDOG AML. Also in December, the company announced a partnership with Iowa-based Premier Bank – who will also deploy CSI’s NuPoint solution.


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https://finovate.com/csi-helps-black-owned-citizens-savings-bank-and-trust-go-digital/