Getsafe enters UK with app-based content insurance, plans European expansion

Getsafe enters UK with app-based content insurance, plans European expansion

Marius Blaesing, founder and CTO and Christian Wiens, founder and CEO of Getsafe.

Getsafe, a German-based insuretech, has launched its U.K., business, where it will offer app-based contents insurance through a U.K. subsidiary and partnership with Hiscox. The firm said the U.K. launch will kick off a larger plan to grow the business across Europe. 

Getsafe said the insurance, known in the U.S. as renter’s insurance, will be offered through a subsidiary firm that it has established in the U.K., meaning the business will not be hurt by the upcoming Brexit withdrawal from the EU.

“Getsafe acts as a platform with multiple carriers, including Munich Re and AXA, providing the capacity in the background,” Christian Wiens, founder and CEO of Getsafe said in a company release. “With Hiscox, we have a renowned carrier for our UK content product at our side and we are pleased to be working with them.”

The company plans to continue expanding starting in the next few months and will eventually be active in all major European markets. The firm also is expanding its range of insurance products, with plans to add the first fully digital life insurance policy in Germany later this year.

Cover image: Getsafe

Topics: Mobile Payments, Region: EMEA

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Better to be blessed first? Call for a measured approach with US regulators

As recent SEC enforcement actions make clear, years after the ICO boom, US regulators continue to pay close attention to ICOs and digital assets. Those in the blockchain and digital asset space should use caution and take heed of the many legal and regulatory obligations that may apply to their activities.

In recent months, the US Securities and Exchange Commission appears to be demonstrating an increased appetite to initiate enforcement proceedings and related actions against unregistered initial coin offerings – in one instance, halting a $1.7 billion ICO and, in another, levying against and ICO issuer a penalty equal to twice the amount of the funds raised in the offering.

Although, in mid-2017, with its 21A Report of Investigation concerning the DAO, the SEC first addressed squarely the issue that digital asset sales could constitute sales of investment contracts and, therefore, securities, the SEC’s more recent actions have addressed some of the world’s most successful ICOs and most prominent issuers. 

In our view, the SEC’s continued vigilance regarding ICOs underscores the importance for market participants contemplating a digital asset sale to cooperate with regulators and heed their warnings.  No matter the significance of a token issuer, the size of its contemplated ICO, or the jurisdiction in which the founders reside, companies must proceed cautiously and seek legal counsel to avoid violating US federal securities laws.

The Telegram offering

Restraining order

On October 11, 2019 the SEC obtained a temporary restraining order to block the Telegram Group Inc. and its wholly-owned subsidiary TON Issuer Inc. from distributing its digital tokens, “Grams”, to investors. Telegram intended to distribute approximately 2.9 billion Grams on October 31, 2019, at which time the tokens could have been sold into US markets, so the SEC moved to prevent this distribution from taking place. 

“The most hyped ICO”

Telegram is the operator of a popular mobile messenger application and had been conducting what has been called “the most hyped ICO in the history of ICOs.”  The alleged unregistered ICO of the company’s “Gram” token had already raised approximately US$1.7 billion globally and US$424.5 million from US investors to finance Telegram’s business and the development of its new blockchain platform, TON Blockchain. 

The SEC complaint

The SEC complaint alleges Telegram failed to register offers and sales of Grams (which are viewed by the SEC as securities) in violation of the registration provisions of the Securities Act of 1933 (the “Securities Act”). 

In the SEC’s opinion, Telegram failed to provide investors with sufficient information regarding Grams and Telegram’s business operations, financial condition, risk factors and management, all of which are required by securities regulation in the US. 

Securities regulation exemption did not apply

Although Telegram has stated that it believed Grams were exempt from registration, as Grams were initially available only to a limited pool of accredited investors, the SEC determined this exemption did not apply as the initial investors were entitled to onward sell the Grams in the secondary coin trading market. 

Telegram countered that the Gram itself should not to be viewed as a “security” under the Securities Act, but rather as a “currency or commodity”. However, the SEC determined that Grams are not a currency because they cannot be used to purchase any goods or services. 

SEC sanctions

The SEC has sought a temporary restraining order, a preliminary injunction, disgorgement with prejudgment interest, and civil penalties against Telegram. Hearings on the case have been scheduled for February 18 – 19, 2020. In the meantime, Telegram has agreed not to offer, sell or deliver any Grams until the conclusion of the hearings and have suspended their formal launch of TON Blockchain until April 2020. 

Investors have also approved the delay and even refused the offer of a partial refund from Telegram, signalling the appetite in the market to not be deterred. This case promises to address directly many of the key issues surrounding the application of US securities laws to offerings of digital assets.

The Nebulous offering

The unregistered ICO of convertible Sianotes

Nebulous is the developer of the decentralized cloud data storage network “Sia” and funded the storage network through an ICO in 2014. The company raised approximately US$120,000 through the sale of a digital asset notes called “Sianotes”, which were convertible into shares in Sia, called “Siastock” upon Sia’s launch. 

Nebulous did not register these sales with the SEC and the SEC’s cease-and-desist order found that they were held not to qualify for any exemption. 

Settlement with the SEC

After the company consented to the SEC order, Nebulous entered into a settlement with the SEC costing nearly twice the amount of the funds raised in the ICO – on September 30, 2019 the SEC announced settled charges against Nebulous, who were required to pay disgorgement of US$120,000, prejudgment interest of US$24,602, and a civil money penalty of US$80,000.

Key takeaways
  1. Token issuers need to stay on top of regulatory developments

    Both these actions highlight the need for token issuers to keep abreast of developments in the evolving US ICO regulatory landscape. For example, while SEC orders against Airfox and Paragon cited the DAO Report, their ICOs in 2017 were launched shortly following the publication of the report.

    Nebulous diverged significantly as the entire ICO process took place in 2014, years before the SEC’s publication of the report. The charges against Nebulous, resulting in a fine significantly in excess of the funds raised in the ICO, underline the importance for firms contemplating a sale of digital assets to seek well-informed legal counsel and stay updated with ongoing regulatory changes.

  2. Engagement with the SEC is prudent

    These developments also indicate open communication to negotiate a deal with the SEC is a more commercially prudent and cooperative way of remediating concerns with the agency as opposed to the more contentious, costly cases like the Kik offering. Nebulous has communicated and cooperated with the SEC in conducting future sales of Siastock. In contrast, the Telegram case has involved more discord with the SEC and is unlikely to be resolved without a protracted legal fight.
  3. Inventive structures do not avoid scrutiny

    Finally, both the Nebulous settlement and the Telegram case indicate that the use of inventive structures, such as the Simple Agreement for Future Tokens (a “SAFT”), is not a fail-safe method for avoiding the scrutiny of US securities laws.

    The SEC complaint filed against Telegram indicates that use of a SAFT may not cure a registration issue if the token otherwise satisfies the definition of an “investment contract” under US securities laws.

    Additionally, the Nebulous settlement warns that ineffective dual-token structures may heighten compliance risk since the token conversion as well as the initial offering may constitute regulated securities transactions.

What’s happening next?

Digital assets have been receiving increased attention from US regulators, contributing to the ongoing debate concerning emerging frameworks like SAFT. The SEC’s references to the relationship between Gram and the Telegram messenger network may also hold significant implications for other tokens issued by social media and messaging companies like Kik or the Facebook-led Libra project. 

Further developments in the Telegram litigation or future agency actions against other ICOs may add further clarity to ICO regulatory guidelines.

2020 Predictions for US Financial Services

Sam Maule

by Sam Maule, Head of North America, 11FS

The more things change, the more they say the same. Mergers, incumbent dominance, and hesitancy over market conditions are all going to continue this year. So does 2020 have anything new in store for US finserv? Let’s take a look…

Prediction 1: more mergers are on the way

Quick: name a banking core provider off the top of your head. Chances are they’ve gone through an acquisition or a merger in 2019. 

FIS, Fiserv, Global Payments – all of them either absorbed processors or joined up with other firms. Expect that trend to continue this year.

And core providers aren’t the only ones bulking up. Last year saw the largest bank merger since the 2008 financial crisis, and more institutions will follow suit in 2020. 

For super regionals to compete with the top four, they’ll need to consolidate. US Bank, PNC, Regions and maybe even Citizens: don’t be surprised if at least one of these banks makes the move.

One thing that probably won’t happen is Goldman’s rumoured acquisition of US Bank. The former has been diving into the retail space, but their acquisitions have mostly focused on the tech side. I’m not convinced that a New York capital markets bank would buy a company that does car loans and mortgages.

Prediction 2: banks will be cautious, reassess in light of the election

Already, we’ve seen companies cutting back ahead of 2020, and there are a few reasons why. Obviously there’s a major election on the horizon, but bankers are also still wary of a potential slowdown or recession. 

Granted, a few developments have calmed their worries. Detentes in the trade war with China and a clearer direction on Brexit have led some economists to believe that 2020 won’t be as dark as we initially thought. But they’ll wait and see before they take definitive action.

Banks will probably still face reorganisations. Wells Fargo has already hired a permanent CEO, and Citi recently brought on Jane Fraser to be its new head of consumer business. New leadership at other organisations seems likely at this point.

Prediction 3: challengers will still face challenges

If anyone at a US challenger bank is reading this, I wish you good luck. You’re going to need it.

Everyone keeps repeating the narrative that Chime’s going to change banking in this country. But until it gets its own core and its own charter, it isn’t really a bank: it’s a deposit gathering tool for Bancorp. 

Chime claims it’s going to quadruple its revenue this year, but it’s still making money predominantly from interchange fees. Eventually, it’s going to have to get into lending and credit cards. 

Then there’s the issue of scale, which is essential for any new company but critical in the wake of the recent Galileo outage

Don’t get me wrong: it’s remarkable that Chime has raised as much as it has. It’s grown really well so far, and that won’t stop in 2020. 

But it’s not a full-service digital bank yet. As a customer, I could care less about that fact; as an investor, it’s key to the money question.

Plenty of challengers are getting stacks of cash thrown their way, but it all still comes down to being revenue positive. The only sexy fintech company is one that makes money. There’s no way any upstart is going to pose a legitimate threat to even the top 20 banks in 2020, let alone the big four.

Prediction 4: Apple and Google will lead tech companies entering finance

Of all the tech companies entering the finserv space, Apple has probably the most distinct advantage: its loyal user base. 

Already, it’s leveraged their popularity to get consumers onboard with the Apple Card. It’s not just the branding – offers on other Apple products are valuable in getting evangelists onboard its financial offerings. Add to that its dominance over hardware and ecosystem and you have a formidable entrant with a pre-established market.

Google doesn’t own the ecosystem in the same way, but it’s made some promising moves. Hiring PayPal COO Bill Ready as its President of Commerce is just one of them. Android devices also offer it a foothold that other tech companies aside from Apple lack. Ultimately, they’re my picks for the two tech companies most likely to make a splash in 2020.

Prediction 5: unless they partner up, UK fintechs will struggle to enter the market

I’d love to see UK fintechs do well here in the US. But right now, I can’t see how they’re differentiating themselves. 

In an environment where cross-border payments mean jack – remember that 40% of Americans have never left the country – Revolut’s foreign currency exchange won’t carry much weight. Monzo and N26 have great budgeting and financial literacy features, but those features won’t be popular enough to lure customers away from Chase or Capital One. 

There’s a key difference between the US and the UK: here, products from big banks are meeting customers’ needs. 

Americans are loyalty driven and love cashback: Target’s RedCard and Starbucks’s mobile system are closed loop systems that offer great rewards and make shopping as easy and intuitive as possible. Right now, the UK challengers don’t provide these incentives.

Ultimately, partnerships will make or break the British fintech invasion. If the challengers don’t get recognised brands on board, they won’t be able to tap into a built-in audience that’s necessary for their success.

Companies like Monzo or Revolut are exciting for people in the industry, but I just don’t see them taking making significant inroads with consumers this year. 

So there you go. It’s bound to be a long year and a lot could happen, but these five predictions give a rough idea of where we’re headed. 

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Addressing some symptoms of insurance issues, and not the underlying causes?

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There’s an odd contradiction in some of what the insurance industry does; the industry is built on predicting risk and strategizing risk sharing, yet in many ways it is victim of knowing its own concerns and reacting to and pricing the reaction, and not working to mitigating the effects of the outcomes.  And in at least one case looking to backfill its model to fit corporate strategy and perhaps not customer choice.

 Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.


Backfilling or buyer’s remorse?

Allstate Insurance (US P&C carrier) recently announced its digital insurance brand, Esurance, will be discontinued as part of Allstate’s migration into being an omnichannel carrier where customers have options under one access point/model for agency based or digital insurance acquisition and service.

Looking back to 2011 with Esurance being a $1 billion acquisition by ALL wherein the company’s CEO announced, “Allstate is uniquely positioned to serve different customer segments with unique products and services,” said Thomas J. Wilson, Allstate’s president, chairman and chief executive officer. “This transaction provides immediate incremental growth in customer relationships and makes Allstate the only company serving all four major consumer segments based on their preferences for advice and choice.”

Appears that ALL figures customers in 2020 expect only one access point that will provide purchase options.   Here’s the thing- Allstate had internal rules that inhibited customers from switching agents and/or internal brands, not external barriers; this change will reportedly alleviate the ALL system problem, and empower agents to better serve customers (per leadership and aligned with a previously announced commission decrease) as ALL migrates into being an insurance technology company.  But what of the 1.5 million Esurance policyholders who consciously chose the Esurance model, and may balk at being tied in with the legacy brand?  And, will marketing costs truly be saved if digital customers still need targeted messages?  It’s certain that Allstate’s advertising partners will create a clever omnichannel ad campaign, but legacy brand is legacy brand, and buying culture is buying culture- can ALL be a cleverer digital carrier under the parent name than was Esurance?  Additionally, will rolling the Esurance policies into the parent change how staff handle claims?  Perhaps, but the effects of several years of underwriting losses for the Esurance PIF will not disappear simply because those claim customers are now called Allstate customers.  Would it have been a more direct action to fix the Esurance claim handling issues? And what does this move in combination with centralizing customer service away from agents suggest for the agency model?

Maybe a good idea earlier in the finance value chain?

Swiss Re announced this week the placement of US $225 million in parametrically triggered cat bonding for Bayview Asset Management’s MSR Opportunity Fund, covering mortgage default risk for Bayview’s loan portfolios in the states of California, Washington, Oregon, and South Carolina.  Bayview does manage ‘credit sensitive’ loan portfolios and derivative funds that include packaged mortgage portfolios, so a parametric product is an immediate hedge in the case of an event that meets the USGS survey index associated with the bond.  Seems a suitable move for the management company as it does not have direct ownership of properties but does have exposure to indirect loss if there are mortgage defaults for its funds mix of loans.  Makes one think- loan originators would be doing the market a service if along with property insurance requirements for loans in the respective states there would be either an EQ insurance requirement, or even a parametric option for mortgagors in the event of a trigger occurrence.  Hedging ‘up the food chain’ is good for the portfolio manager but does not help address the potential cause of default.  Swiss Re also has the unique opportunity to market the parametric default risk products to primary mortgagees.  It’s a changing risk mitigation world.

Problem hiding in plain sight

First California, now Australia in the news due to property owners encountering challenges with property underinsurance and unexpected increases in property repair costs.  These concerns are not new and become front burner issues each time a significant regional disaster occurs, always attracting the attention of those who sit at the head of the political insurance table, the insurance commissioners.  California’s commissioner enacted a moratorium on policy cancellations in brushfire areas (1 million property owners involved), and Australia’s Treasurer Josh Frydenberg recently asked Aus property insurance carriers for detailed information to help the government and population better understand where insurance recovery efforts stand.   Not Dutch boys with fingers in the dike, but certainly ex post actions for circumstances that pre-existed the respective regions’ disasters.

At least in California the primary drivers of the problem are property owner valuation knowledge (or lack of it), ineffective underwriting valuation tools, policy premium and market share competition driving carrier lack of enthusiasm for change, and unpredictability of post-disaster rebuilding costs. Also- misconception on the part of the public- few policies (close to zero) include wording of restoring to pre-loss condition, or replacement with like kind and quality.  The reality of the underinsurance problem is that there is now a de facto rise in insureds’ ‘deductibles’ after a disaster due to inadequate coverage limits. The ‘deductible’ effect is mitigated by insureds employing personal property settlement proceeds in the dwelling rebuild costs, but all in all it’s a relative fools’ game.  The worst effect is the extreme hardening of the property insurance market to the point where dwelling insurance becomes unavailable and/or unaffordable. The easy fix is better upfront estimation of rebuild costs, but even with that there is then a problem for carriers- the marginal premium increase suggested under current methods in moving from a $500K limit to a $750K limit is far less than a comparable change from $250K to $500K, so is there an overarching lack of motivation to raise coverage limits?  An unexpected related potential effect for carriers- earlier triggering of reinsurance treaties due to the weight of maximum losses and lessening of rei appetites for renewals under existing agreements.   Without question structural changes (no pun intended) are needed in property policy valuations and underwriting for areas where the frequency of regional disasters is high.

*Contrarian viewpoints of an industry observer, not to be confused with that of mainstream press, and presented in the light of knowing that there are many forward-thinking players in the industry who will work to lessening the effects noted above.

#innovatefromthecustomerbackwards  #newinsurancebalance

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How Upstart and Cross River Bank are automating credit card payments

Despite advances in banking and personal finance technology, paying credit card bills in a simple, time-efficient way is still a pain point for many consumers. According to recent research, 37% of U.S. households revolved credit card debt from month to month last year. 

Now, loan startup Upstart and Cross River Bank are adding automation to the process through a direct credit card payoff feature they debuted last month. With the new featureUpstart steps in and pays the card provider through a personal loan, taking the burden off the consumer.  

“We wanted to do something that could potentially nudge the consumer to what’s best for them,” said Dave Girouard, co-founder and CEO of Upstart. “There’s pretty clear evidence that when loan proceeds go to pay off credit cards, the loans perform better.” 

As a growing number of consumers rely on personal loans, the 8-year-old Upstart is streamlining the process for its customers. The loans, which are funded by the New Jersey-based Cross River Bank, present less risk to Upstart because the debt paid off automatically.

Alyson Clarke, principal analyst at Forrester Research, pointed out that Upstart paying the credit card debt itself won’t improve consumer repayment behavior. According to Clarke, most consumers with credit card debt fall into two categories: those with an expensive one-time bill such as a medical expense, and those who overspend. 

According to Girouard, the majority of Upstart’s loans are used to pay off credit card debt. Upstart considers employment history, education, cost of living and credit reporting data when underwriting its loans, so it already knows how much credit card debt a customer is carrying. When customers apply for a loan, Upstart asks consumers if they would like Upstart to pay off the credit cards. If they accept, customers pay back Upstart through an installment loan.  

See also: Upstart CEO Girouard: ‘FICO is extremely limited and backward-looking’

Upstart acts as a front-end underwriting and customeracquisition business, but the loans are funded by bank partners. The only bank partner funding the direct credit card payoff feature is Cross River Bank, but Girouard said Upstart hopes to add more bank partners later this year.

Loan terms are set by the bank partners, but they start with APRs as low as 3%, and the highest rate Upstart allows is 35.99%, with terms lasting three or five years. With the direct credit card pay off, Cross River offers a 100basis point — or 1% — reduction on the loan APRs. 

Its easier for the consumer, and it’s less effort, Girouard said. “On the bank side, you’re getting a customer who is doing the right thing financially.” 

Bank Innovation Ignite, which will take place March 2-3 in Seattle, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. This is an exclusive, invitation-only event for executives eager to learn about the latest innovations. Request your invitation

Visa, Mastercard, AmEx win easier access to China market

The biggest U.S. card companies just moved a step closer to gaining access to China’s $27 trillion payments market.

China said it won’t take longer than 90 days to consider applications from providers of electronic-payments services such as Mastercard, Visa and American Express Co., according the text of a landmark trade agreement with the U.S. It should be an especially welcome reprieve for Mastercard and its partner NetsUnion Clearing Corp., which set up a venture in March that is still awaiting approval from the People’s Bank of China to begin operations.

“China is a vital market for us,” Seth Eisen, a spokesman for Mastercard, said Wednesday in an emailed statement. “We continue to make every effort to secure the requisite license to be able to operate in China domestically. This deal is a step forward in that process.”

The move shows progress in the U.S. payment networks’ battle for access to mainland China, which has been a point of contention in the trade dispute. Officials from the world’s two largest economies finalized a bevy of deals before signing off on the first phase of a sweeping trade agreement, which they have sought to cast as a major breakthrough in relations.

Mastercard Chief Executive Officer Ajay Banga and Visa CEO Al Kelly were in attendance at Wednesday’s festivities at the White House for the trade deal announcement. In a statement, Visa said it sees potential to help further develop digital payments in China through the 2022 Olympics in Beijing and that it’s approaching entry into the country “with a long-term focus.”

“Visa is working closely with the Chinese government, including the People’s Bank of China, throughout the application process for a bank card clearing institution license,” the company said in the statement, welcoming the signing of the trade agreement.

China in June 2015 allowed foreign bank-card clearing providers to obtain licenses by setting up units or acquiring a local company, ending a monopoly by state-run China UnionPay Co. But progress has since been slow for Visa and Mastercard, the world’s largest payment networks. American Express cleared a key hurdle in early January when regulators accepted its application to start a bank-card clearing business with a Chinese partner.

“We’re pleased with the progress we’re making to become the first foreign network to receive a clearing and settlement license to operate in mainland China,” Leah Gerstner, a spokeswoman for AmEx, said in a statement. “We will continue to work through the regulatory approval process through our joint venture in China.”

As part of Wednesday’s agreement, the U.S. also pledged not to discriminate against China UnionPay, or CUP, or other Chinese electronic payment services.

Mastercard and Visa have long complained that their delayed entrance into China means they’ll be pitting themselves against large domestic players in a market that’s seen mobile payments explode in recent years. Mobile transactions topped 190 trillion yuan ($27 trillion) in China in 2018, making it the world’s largest such market, according to iResearch. Ant Financial’s Alipay and Tencent Holdings Ltd.’s WeChat Pay are the dominant mobile payments firms.

They won’t be starting from nothing. Mastercard and Visa have long worked with Chinese banks to slap their brands on cards to facilitate transactions that consumers make outside China. But Wednesday’s announcement means the networks will now have a chance to compete for those cardholders’ domestic spending as well.

China had 8.2 billion bank cards in circulation at the end of September, with 90% of them debit cards.

— Bloomberg News (with assistance from Jenny Surane and David Scheer)

Three Key Lessons We Learned from Plaid

Unless you’ve been living under a rock, you’ve probably heard that Visa is acquiring Plaid for a deal that’s worth $5.3 billion. Finovate’s own David Penn covered the story for us on Monday, and virtually everyone in the fintech space is talking about it.

What you might not know, though, is that Plaid was on stage at one of our events way back in 2014. At that point they were already well on their way – they were close to signing their 1,000th customer, and they had already signed companies from spaces like lending, payments, expenses and accounting, asset management, and PFM. In the years following their time on stage, we’ve seen countless demoing companies come across our stage who relied on Plaid to underpin their offerings from a wide variety of areas.

The fact that they were so widely used at such an early stage is a testament to the quality of their code, but there are also a few key lessons to take away from their success:

  1. A valuable tool can be worth more than what you build with it. The old saying goes something like “in the gold rush, it’s better to sell pickaxes than mine for gold.” That’s precisely what Plaid did, putting together a product that was attractive to a wide variety of fintech companies to capitalize on the massive wave of fintech startups that came through the last decade. Whether those startups survived or not, Plaid became a part of all of them, guaranteeing their own payday and removing the uncertainty that so many fintech startups faced.
  2. Simplicity is an asset. Plaid’s API is simple to understand,  install, and build on, which has made it attractive to developers from across fintech. This simplicity also means that the tech is highly versatile, floating easily from one field to another.
  3. Connections are vital. At the time that Plaid was gaining momentum, the API world was a very competitive one, with a lot of providers fighting to get adopted. The technology itself was very important, obviously, but so was the work they did in coming to events like FinDEVr to make sure that developers knew what their code could do. The ability to evangelize for your product is crucial to success, and building momentum frequently has to be done through face-to-face connections with influencers in the industry.

There are many more lessons to be drawn from Plaid’s example, but for innovators in the space, those three lessons seem the most important to me. Plaid’s connections, simplicity, and business strategy put them in a position to succeed and become the latest fintech royalty. Congratulations to them on their success, and the challenge is laid out for the rest of the industry to follow in their footsteps.

Not Another 2020 Trends Prediction Post (Seriously, It’s Not!)

If you’re like me, you’re already experiencing 2020 fatigue. If you’ve read at least 10 posts depicting the top trends for 2020 in every fintech sub sector, you’re not alone.

Fortunately for you, this isn’t another 2020 predictions post.

Instead, we’re taking a look at the trends you can expect to see on stage next month at FinovateEurope. To keep things simple this year, we assessed the themes at a very high level and broke them down into three categories: the big, the little, and the trends in-between.

The big trends

As you can see in the word cloud above, the big topics for FinovateEurope 2020 are AI, digital identity, and customer experience. The only surprise here is that AI isn’t bigger. Since AI is an enabling technology it often pulses throughout multiple sectors across fintech. Customer experience, for example, is a topic that relies heavily on AI.

Digital identity is another trend developing throughout the fintech industry and has been rising in discussions around identity verification. However, digital identity isn’t quite as sexy as AI, so companies aren’t as quick to boast about their digital identity capabilities.

The little trends

The three smallest trends on this year’s list include blockchain, compliance, and PFM. Though its potential to disrupt traditional banking hasn’t lessened, blockchain has regressed slightly into the shadows of fintech. This may be the result of compliance complications that the blockchain brings. Other challenges to wider blockchain adoption may result from a lack of understanding of the subject or stem from the lack of ability for legacy systems to adapt.

PFM appears as a small topic because while many fintechs help users with their personal finances, they are hesitant to describe their technology as PFM. However, just because PFM is older than Twitter doesn’t make it any less relevant.

Speaking of relevance, compliance is pertinent to every subsector in fintech. However, the topic appears small in the word cloud because it is a bit of a status quo. In other words, every bank and fintech has some level of compliance measures in place.

The trends in between

Data analytics, fraud prevention, wealthtech, chatbots, lending, credit, regtech, and small business tools are all trends caught in the middle this year.

None of the topics is new and the only one I’m surprised to see on this list is fraud prevention since it is thought of more as a requirement than something firms are looking to add to their technology. However, recent evolutions in cybercriminal techniques, high-profile hacks, as well as advancements in enabling technologies adapted to the security space have made fraud prevention an even hotter topic than it once was.

If you want to not only read about the newest fintech trend transformations but also see them demoed live on stage, register for FinovateEurope. This year’s event is taking place in Berlin, Germany on 11 through 13 February.

Interested in demoing your company’s new technology on stage? There’s still room in our demo lineup. Check out more information on what it takes to demo at FinovateEurope or contact for details.

Third-party apps grow users faster than banking apps

As banks compete for mobile-centric Gen Z customers, new data from the mobile analytics platform App Annie suggests fintech companies are growing their app user base faster than banks. The report, titled “The State of Mobile 2020,” found that, globally, the top–10 fintech apps grew their monthly active users by 20% year over year in 2019 compared with just 15% for banking …Read More

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French Fintech Lydia Locks in $45 Million

Photo by slon_dot_pics from Pexels

TechCrunch reported this morning that French mobile payment app Lydia has raised $45 million (€40 million) in a round led by Tencent. With existing investors CNP Assurances, XAnge, and New Alpha also participating in the Series B, Lydia adds significantly to the more than $16 million (€13 million) the company raised in 2018. The funding will help propel the firm toward its self-described goal of being the “PayPal of the new mobile generation.”

Lydia is used to make P2P payments, link and share accounts, as well as access a marketplace of additional financial offerings such as lending products and insurance. Available as a free app with other premium services available, Lydia can also set up recurring payments and enable users to pay with their smartphone via Apple Pay, Google Pay, Samsung Pay, or QR code. Company co-founder and CEO Cyril Chiche pointed to the growing numbers of French consumers who are using the app for a variety of money management functions, highlighting the fact that 25% of French consumers between the ages of 18 and 30 have a Lydia account. Chiche added that the technology has three million users across Europe.

Lydia, which was founded in 2013, will use the funding to fuel its continued expansion in Europe. Lydia is particularly keen on opportunities to reach millennial Europeans in markets like the U.K., Ireland, Spain, and Portugal – where its app was deployed in the second half of 2017.

Compared to other countries in Europe, the fintech industry in France is often overlooked. This is not wholly without foundation. According to the recent report on European fintech by Dealroom, the share of fintech related VC spending in France in recent years was 12% compared to 20% in Europe overall, 21% in Germany, and 30% in the U.K. Born2Invest noted in December that French fintech startups had raised $700 million in 2019, and suggested that this year would likely see “a lot of talk about assuretech” also known as insurech, where technologies like digitization and automation are able to make dramatic differences in data management.

Lydia was featured in Silicon Canals last spring in its look at “10 exciting French fintech startups to work for in 2019.” For more on the French fintech industry, check out this infographic from BlackFin Tech which depicts the five main ecosystems in French fintech – regtech, assurtech, financial services, banking/PFM, and payment services – as well as some of the major players.

Raisin’s New Acquisition Gives Company Access to the U.S. Market

European deposit marketplace Raisin announced today it acquired New York-based Choice Financial Solutions. Terms of the acquisition, which marks Raisin’s fourth purchase in the past year, were undisclosed.

Raisin will license Choice FS’ technology to banks in the U.S., a move that will bring the company one step closer to its U.S. launch. Last year, Raisin teased the geographical expansion with the appointment of Paul Knodel as U.S. CEO.

Raisin U.S. CEO Paul Knodel

“Joining forces with Choice Financial Solutions lets Raisin begin offering cutting-edge services to banks and customers before we even launch our U.S. platform,” said Knodel. “As a leading innovator in the deposits space, Raisin sees Choice FS as a perfect fit for our mission in the U.S. deposits market. The enthusiastic market feedback we have already received affirms how ripe the savings space is for just this type of personalization.”

Choice FS has a decade-long track record of providing banks with technology to help their clients save for long-and-short-term goals. The company’s secret sauce is customization– something modern consumers have become accustomed to in today’s era of BigTech solutions. Choice FS allows banks to customize terms, distributions, amounts, and withdrawals to maximize return on savings accounts, creating a highly-personalized savings experience with an intuitive user interface. Company founder and CEO Daniel Smith refers to this personalization as “the missing piece” for banks and depositors.

Raisin was founded in 2012 and has since brokered $20.6 billion (€18.5 billion) for 200,000 customers in 28+ European countries and 90 partner banks. The company provides a free marketplace where consumers can browse European deposit products, ETF portfolios, and, in Germany, pension products.

Galileo offers wealth, spending accounts with IFA broker dealer

Independent Financial Advisors, a full-service broker dealer, insurance agency and investment advisor, has partnered with l with Galileo Money+ to offer high-yield, FDIC-insured bank accounts to clients.

Galileo Money+, a division of Galileo Financial Technologies, provides white-label bank accounts through wealth management firms, allowing advisers to offer the services to their customers. 

Galileo Money + offers two separate accounts through the Bancorp Bank, including the Galileo Money+ Spending account, which offers 0.73% APY and the Galileo Money+ account, which offers a 1.36 APY for wealth accumulation. 

“Financial advisors haven’t had a way to compete with brick & mortar banks for the trillions of dollars that high net worth households keep in bank checking, savings and CDs,” Aaron Dillon, managing director of Galileo Money+, said in a company release from IFA. “The white-labeled services provided by Galileo Money+ enable financial advisors to compete with banks in a meaningful way.”


Topics: Mobile Apps, Mobile Banking

Companies: Galileo Processing

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KAL and Ceska launch first Windows 10 ATM on Linux Hypervisor

KAL ATM Software and Ceska sporitelna announced the launch of the first ATM running Windows 10 on a Linux Hypervisor.

KAL said its new Kalignite Hypervisor solution, created under a partnership with Red Hat, represents a breakthrough solution that allows banks to bypass costly and disruptive ATM hardware upgrades. 

Jacub Otahal, the ATM Innovation software product owner at Ceska, cited the previously scheduled end of Windows 7 support by Microsoft Corp. for his company choosing to install Kalignite Hypervisor in a pilot. 

“KAL’s new solution gives Ceska sporitelna control over when to carry out hardware upgrades,” Otahal said. “This means we can cut costs by keeping to our 10-11-year renewal recycle, rather than being forced to comply with the hardware lifetime.”

He said the Kalignite Hypervisor solution also allows the company to keep its software up to date.

“We are delighted that Ceska sporitelna decided to partner with us to achieve this impressive world first,” KAL CEO Aravinda Corala, said in a company release. “Kalignite Hypervisor enables Ceska sporitelna to stay completely up to date and run the latest versions of all software on their ATMs.”

Korala said the new technology not only helps with the Windows 10 migration, but also allows Ceska sporitelna to migrate to the Windows LTSC and SAC upgrades without the need to change hardware. 


Topics: ATMs, Mobile Banking, Region: EMEA, Software

Companies: Microsoft, KAL

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German fintech Raisin acquires Choice Financial as it prepares for US launch

German savings and investment platform Raisin has acquired Madrid-based Choice Financial Solutions in an effort to integrate with U.S.-based financial providers. Terms of the deal were not disclosed.

Berlin-based Raisin aims to offer U.S. customers a marketplace approach to savings account products through partnerships with financial institutions, a model it’s successfully rolled out in Europe. The company, which intends to launch in the U.S. during the second half of this year, noted that the Choice platform will help client institutions build new products quickly.

“The [Choice] platform enables our partners to quickly create innovative products and distribute them, and we bring additional distribution capabilities through Raisin,” said Raisin U.S. CEO Paul Knodel. “Another capability of the platform is record keeping. We would do all the record keeping on behalf of the bank and then feed data into the bank systems.”

Choice, founded in 2011, developed a technology product that enables financial institutions to efficiently offer savings solutions to the mass market in a cost-effective way. It has worked with a range of Spanish banks, including BBVA USA.

For Raisin, bringing Choice’s capabilities in-house helps boost plans to launch in the U.S. The company, which has not disclosed its U.S. financial institution partners, said it’s had discussions with 40 U.S. institutions, and reactions have been overwhelmingly positive. Raisin’s pitch to U.S users having the ability to choose the best time deposit account that fits their needs and requirements among a wide array of choices. Over time, said Knodel, the company is open to adding investment products to product offerings for U.S. users.

While user accounts will be held by financial institutions, Raisin will handle customer service interactions with customers who acquire their accounts through its platform. Building on its growth in Europe, the company hopes to deliver a compelling proposition to client banks as well as end users.

“We have a strong track record from Europe to deliver value to banks and consumers on our platform,” explained Knodel. “In the U.S., we’re going to bring value to our bank partners through their ability to create new products quickly and with some unique features.”

A financial industry veteran, Knodel previously held senior positions at institutions that include Citigroup, Merrill Lynch, TD Ameritrade and Wealthfront.

See also: Raisin expands financial ‘cockpit’ through fairr acquisition

Since its launch in Europe in 2013, Raisin has brokered more than $20 billion worth of transactions for more than 200,000 customers in more than 28 European countries. It currently partners with more than 90 banks.

The company, which has raised $220 million in funding, has in recent years made acquisitions to augment the platform’s capabilities, including U.K.-based customer onboarding platform PBF Solutions in 2017, as well as Germany-based MHB Bank and pension startup fairr last year. Its backers include Goldman Sachs, PayPal Ventures, Thrive Capital, Ribbit Capital and Index Ventures.

Michael Stephan, Raisin’s chief operating officer, told Bank Innovation last year that Raisin is uniquely positioned because of its appeal to both end users and client banks.

“We’re very passionate about the two sides of our marketplace,” Stephan said. “We want to make it very easy for [the consumer] to pick and choose, as well as manage, the savings products. We don’t provide a lead out to another bank; we give customer one access point to accounts at a lot of banks.”

Bank Innovation Ignite, which will take place March 2-3 in Seattle, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. This is an exclusive, invitation-only event for executives eager to learn about the latest innovations. Request your invitation

Raisin acquires Choice Financial to let US banks offer customized savings accounts

Raisin acquires Choice Financial to let US banks offer customized savings accounts

Daniel Smith, CEO of Choice Financial Solutions

Raisin, a Berlin-based wealth management platform, agreed to buy Choice Financial Solutions, a software firm that will allow American banks and credit unions to offer a broader range of savings products directly to their customers or through the Raisin platform. 

Choice FS, which originally launched in 2010, will allow banks to offer customized short and long-term savings products that offer for example, cash distributions at set periods over time or ad hoc withdrawal availability. 

“Joining forces with Choice Financial Solutions lets Raisin begin offering cutting edge services to banks and customers before we even launch our U.S. platform,” Paul Knodel, CEO of Raisin U.S., said in a company release. “Retail customers increasingly expect convenience in every area of life, and banks want to meet that demand, not just in terms of online and mobile banking, but also their bank’s available range of products.”

Choice FS founder and CEO Daniel Smith said the company has been able to help banks and credit unions, burdened with legacy systems, develop customized deposit products for individual customers without excess overhead for the financial institution. 

“Joining the Raisin family for us means greatly strengthening our ability to scale and connect our software to the sector that needs it most,” he said,” in the release. 

Terms of the deal were not disclosed.

Cover image: Raisin


Topics: Mobile Banking

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Genmega Inc. introduces new features to universal kiosk

Genmega Inc., a kiosk and ATM manufacturer, has introduced its new and improved Universal Kiosk 2, with plans to ship in spring 2020, according to a press release. 

The Universal Kiosk 2 provides greater flexibility and functionality. Customers can mix and match the components they need to create a custom kiosk to fit virtually any self-service need. Options include cryptocurrency, check-cashing, food-ordering, sports-betting, parking garages and more.

Other key features are a UL 291 safe, attractive edge lighting with 256 color variations and an integrated topper, eliminating the need to add additional signage for advertising.

Image courtesy of Genmega Inc.

Topics: ATMs, Bitcoin, Cryptocurrency, Mobile Banking

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Persistent Systems, Gojoko team with AWS on community bank, credit union platform

Persistent Systems, Gojoko team with AWS on community bank, credit union platform

India’s Persistent Systems Ltd. and U.K.-based Gojoko Marketing Ltd. have created a digital lending platform to help community banks and credit unions rapidly deploy a range of services to customers that allows them to more effectively compete against large incumbent financial institutions. 

The Community Lenders Go Digital Platform, which runs on top of the Persistent Digital Credit Union Solution and is backed by Amazon Web Services, allows credit unions and community banks to scale a wide array of services, ranging from digital onboarding to online deposit opening and Know Your Customer (KYC) services that use machine learning and artificial intelligence. 

“Credit unions and challenger banks aren’t in business to be technology experts, they’re in business to provide value to their members and customers,” Jaideep Dhok, general manager, banking, financial services and insurance at Persistent Systems, told Mobile Payments Today via email through a spokesperson. “Software is so interchangeable and seamlessly integrated that this new era is all about the composable enterprise and there’s no way for most businesses to grasp all the changes.”

In the U.K., the companies have been able to accelerate the growth of banking partners like My Community Bank, which uses the platform with the help of technology partners like Salesforce and Mambu. 

The platform is not just limited to credit unions and community banks, but after the U.K. launch in the fall., the firms signed one of their largest deals with a U.K. challenger bank, and that agreement is currently being implemented.


Topics: Mobile Banking, Region: APAC, Region: EMEA, Technology Providers

Companies: Persistent Systems, Amazon

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AML: A Shocking $8.14 billion of fines handed out in 2019

A shocking $8.14 billion of fines for AML handed out in 2019, with USA and UK leading the charge. 

Encompass Corporation, a fast-growing provider of intelligently automated Know Your Customer (KYC) solutions, has carried out an analysis of Anti-Money Laundering (AML) related penalties handed down between 1 January and 31 December 2019.

Key observations: 

  • 58 AML penalties handed down globally in 2019, totalling $8.14bn 
  • This is double the amount, and nearly double the value, of penalties handed out in 2018, when 29 fines of $4.27bn were imposed 
  • Regulators in the USA were most active, handing out 25 penalties totalling $2.29bn 
  • UK followed with 12 fines totalling $388.4m 
  • Largest monetary fine was $5.1bn and originated from France 
  • Average monetary fine for 2019 was $145.33m 
  • 2019 was record year, in terms of number of penalties handed out (58), ahead of 2016 (47) 
  • Under half of penalties given out in 2019 were to banks (28 of 58), compared to two-thirds in 2018 (20 of 29) 
  • Penalties handed down by regulators across multiple jurisdictions beyond the USA and UK: these were Belgium, Bermuda, France, Germany, Hong Kong, India, Ireland, Latvia, Lithuania, the Netherlands, Norway and Tanzania 

2014 still holds the record for the highest total value of fines at $10.89bn, but this includes an anomalously large penalty of $8.9bn. If this were to be removed, 2019 would take the lead.

Wayne Johnson

Wayne Johnson, Co-Founder and CEO of Encompass Corporation commented:

“Since 2015, annual AML penalty figures have been steadily rising each year. Multi-million dollar fines have been commonplace for a while, but we are now seeing more penalties of one billion dollars or over, with two in 2019 alone. 

Historically, the majority of these fines have been given to banks, but this year the proportion was less than half, demonstrating that money laundering is now recognised as a general business issue, not just one that is specific to financial services. Regulators in the gambling/gaming sector were particularly active in 2019, handing out five fines, all of which were well over $1 million and the highest being $7.2 million. Interestingly, four of these were in the UK, demonstrating a crackdown here. 

The USA continues to lead the way, having handed out the most penalties this year at 25 – more than twice the amount of the UK, the country in second place. Given that these two countries have transparent regulatory cultures and active regulatory bodies, we expect we shall continue to see the largest number of fines originate from here, but we are seeing activity from increasing numbers of jurisdictions as time goes on. For example, in 2019, penalties were handed out by 14 countries, compared to just three a decade ago in 2009. 

We are not expecting the spotlight on money laundering to dim. The continued and increased focus on this area highlights the severity with which it is viewed at a global level, which is not surprising given the negative economic and societal repercussions it can have. As we head into 2020, we shall continue to monitor and analyse AML penalty data with interest to see how it evolves.” 

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Small Business Finance Tips For Managing Your Invoicing

Despite being one of the most challenging and time-consuming tasks that every business owner has to deal with, invoicing is something that you should manage adequately. It can have a significant impact on the cash flow of your business. 

Thus, the importance of producing and delivering invoices that encourage customers to pay on time. The use of automation software and ready-made invoice templates can streamline the whole process. You can check out sites like Wave if you want to learn more about them.

Aside from taking advantage of invoicing software and design templates, coming up with an invoicing strategy can also do wonders for you. It will help you send invoices more efficiently and keep track of them better.

Find out how to strategically manage your invoicing with the following tips for small businesses.

Create A Checklist Of All The Information That The Document Should Contain

As a business owner, you have a lot of responsibilities, and you shouldn’t spend all your time dealing with your invoicing. For you to save time, it’s best to create a checklist of all the information that your invoice document should contain and collect them one by one. It also helps so that you won’t miss to include critical information.  

The essential information you need includes the name of the customer, contact numbers, address of your business, and that of your client, tax identification numbers, among others. You can add more details if you want to like the description for the product or service delivered and the corresponding price. Again, you skip the hassle of gathering all these things by downloading complete invoice templates from reliable sources over the internet.

What Type Of Invoice Should You Use?

It’s worth noting that invoice templates vary. It’s especially essential to understand the different choices you have if you plan to get ready-made ones online. The type of invoice to use will depend on the details of the transaction you made with a specific client and the agreements between the two parties.

One of your options is a recurring invoice. It’s useful if you’re under a contract with a client, and you’re going to deliver a product or service regularly for several months. The schedule can be set to weekly or monthly, depending on the agreement, as indicated in the contract. This invoicing document will make it easier for your client to send recurring payments.

Another option is an interim invoice. This invoicing document also requires a customer to send recurring payments but in smaller amounts. It works when you’re going to get paid for every milestone completed in a project. Please take note, though, that you have to send a final invoice before the project ends, which leads to the next type of invoice.

The next option is the final invoice. It serves as a wrap-up of the project completed. The total amount of payments made gets included in the document. The final invoice may also contain an outstanding balance if there are any.  

The most common type of invoicing document that a lot of people encounter every day is the standard invoice. It’s what most businesses issue for a product delivered or a one-time service rendered.

Automatic Payment Reminders

Small businesses aren’t always lucky. It’s normal to meet pain-in-the-ass customers or clients occasionally. Late payments can happen, and others would even try to escape their responsibilities of paying for products or services received. To solve such problems, you can utilize automatic payment reminders that most online invoicing platforms offer. 

Automatic payment reminders send alerts to clients once they go beyond the payment schedule indicated on the invoice. The good thing about such a system is that it will notify you of every receivable that gets delayed and for every payment received. It makes your life as a business owner more comfortable. It can also show how much the customer owes and what payment options are available for them.

Using A Numbering System

An effective way to organize your invoicing is to implement an invoice numbering system. It will help resolve common issues encountered in terms of tracking invoices by giving you the chance to organize everything by numerical value or pay period. 

The use of numbering systems becomes more comfortable if you use automated invoicing software or professional templates.

Sending Invoices On Time

The importance of sending invoices on time is a no brainer. However, many businesses still miss out on doing it, especially when other responsibilities take away your focus. It’s also a common scenario when business owners fail to prepare the invoicing document immediately.

When you send invoices on time, you tell your customers or clients that you’re reliable and worthy of their trust. It shows your professionalism, and most importantly, it helps you to get paid on time, avoiding any disruption to the cash flow of your business.


The tips mentioned and discussed above should help you avoid problems arising from billings and collections. Always remember that not doing invoicing right can result in lousy cash flow, and it’s the last thing you’d want to experience as a small business owner who’s still trying to work your way up.

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What Brexit blues? Businesses believe Brexit will have a long-term positive impact

A new study by Huthwaite International reveals over half of businesses in the financial sector believe Brexit will have a long-term positive impact. 

Apparently, 51% of businesses remain confident about business growth post-Brexit but worry short term with 33% concerned with the initial impact. Economic stability, a no-deal Brexit and changes to laws and legislation rank are amongst the biggest concerns for businesses in the financial sector post-Brexit. 

A new state-of-the-nation study into how businesses in the financial sector are prepared for Brexit, has revealed a staggering 37% of businesses believe the process of exiting the EU is currently having a positive impact on their business, while 29% feel it hasn’t had any impact at all.

Commissioned by global sales, negotiation and communication experts, Huthwaite International, the report shows that post-Brexit business prospects remain positive, with 51% of businesses believing their growth potential will prosper post-Brexit, regardless of the outcome.

When looking at what worries businesses most about the UK leaving the European Union, economic stability, a no deal Brexit and changes to laws and legislation ranked as the highest concerns.

Improving negotiation skills also ranked as the biggest priority amongst businesses before the Brexit deadline, with many sighting it to be a key priority when it came to safeguarding profits and reducing overheads.

Tony Hughes, CEO at Huthwaite International said: “Gaining the skillset and knowledge to survive this economic uncertainty is vital for business success. The UK is packed with ambitious and prosperous companies that in theory should flourish regardless of economic uncertainty, however the importance of obtaining the core skillsets to flourish shouldn’t be underestimated.

“One of the few certainties the UK faces is that, for selling organisations, things are getting tougher. As buying organisations entrench, delaying or even cancelling purchasing decisions, sales teams across all sectors and markets are having to up their game. This means sophisticated negotiation skills aren’t just important to ensure the UK secures a quality deal with the EU, but also form the fundamentals for ensuring business success across the UK too.”

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