Kabbage continues e-commerce client push with GoDaddy integration


Small business lender Kabbage is growing its reach with e-commerce buyers and sellers, including a partnership with GoDaddy that puts the Kabbage platform in front of GoDaddy’s 19 million entrepreneurs.

The partnership with GoDaddy, which launched earlier this month, is a play to reach e-commerce businesses that partner with GoDaddy. GoDaddy is a domain name and marketing service for small businesses, and it positions itself as a one-stop shop for businesses looking to scale. 

With GoDaddy, Kabbage is augmenting its outreach to e-commerce businesses who otherwise would have difficulties getting loans from banks. “We’re always looking for ways to distribute our product that are efficient,” said Laura Goldberg, chief revenue officer at Kabbage. “You want to go where small businesses are.”

The GoDaddy tie-up is not the first time Kabbage has sought to reach new customers on e-commerce platforms. In January, the company partnered with business-to-business e-commerce platform Alibaba.com to launch point-of-sale financing tool Pay Later.

Beyond web and domain name services, GoDaddy offers an e-commerce toolkit called Websites + Marketing. The service helps companies manage their orders, including payments and shipping, from online marketplaces like Amazon, eBay and Walmart. According to Goldberg, companies that are using GoDaddy’s e-commerce consulting services are rapidly growing businesses. 

“Maybe they’ve investing in Google adwords, maybe they’re going to stock up on inventory [or] maybe they’re going to open a second location,” she said. As these businesses grow, loans are a logical next step.

See Also: Digital lenders aim for small businesses underserved by large banks

Kabbage’s product will show up when businesses are signing up for any GoDaddy website or marketing product through a unified login. GoDaddy will also let companies know about Kabbage’s services through marketing channels like email and social media.

Kabbage isn’t the only small business lending platform trying to reach companies on e-commerce platforms. SellersFunding, Square Capital, PayPal Working Capital and Amazon Lending are all trying to reach small businesses growing their online presence. 

Juozas Kaziukėnas, CEO of e-commerce research firm Marketplace Pulse, recently told Bank Innovation these platforms are trying to reach companies underserved by banks. “It’s the issue of being too small for a bank and, even if they talk to you, you don’t have enough history of business execution to be a bank client,” he said. “[Alternative lenders] have better data than a bank would have and can offer loans to sellers who would have no access to funding.”

Atlanta-based Kabbage uses a variety of data points to rapidly underwrite small businesses looking for financing. The company uses banking data, accounting information and social media information to gain a holistic view of clients. It loans of up to $250,000 with terms of  six, 12 or 18 months.


Looking Beyond Funding at Fintech in MENA


Fintech is a global game, so why don’t we always hear about all of the global players? The Middle East and North Africa (MENA) region, for example is often overlooked when it comes to fintech.

The Milken Institute, a non-profit think tank, recently looked beyond the borders of the U.S., Europe, and Asia to better understand the state of fintech in MENA– specifically in the UAE and Bahrain. The findings come in the Milken Institute’s recent report The Rise of FinTech in the Middle East: An Analysis of the Emergence of Bahrain and the United Arab Emirates.

The publication reports that the region receives only 1% of all VC fintech investment across the globe. But considering funding numbers alone paints a different picture than looking at fintech activity as a whole in the region. Looking beyond funding numbers, the report details the state of fintech in the region, its challenges, and what to watch.

MENA’s fintech pulse

Just getting started

It may be true that the rest of the globe receives 99% of all VC fintech investment, but the UAE and Bahrain are just getting started. Policymakers began forming fintech-specific initiatives in 2017 and, with only a couple of years of development, there is still plenty of time for the countries to grow the depth and breadth of fintech in the region.

Potential clients

The MENA region has around 450 million residents, an ample population to support a wide range of fintech initiatives. What’s more, half of all residents are under 25 years old and more likely to be tech savvy, having grown up with technology touching almost every aspect of their lives.

Geographical advantages

MENA acts as a gateway to neighboring Asia, which has two positive aspects. First, it is ripe with potential fintech partners. Second, Asia has a large population of financially underserved residents in need of the types of alternative financial services fintechs offer.


The region’s fintech sector is growing at a 30% compounded annual growth rate. By 2022, it is estimated that 465 fintechs in the region will garner $2+ billion in annual funding, a 25x improvement when compared to the $80 million in funding fintechs brought in in 2017.

What to watch

Milken’s report states that the following fintech subsectors are emerging regularly throughout the MENA region:

  • Payments
  • Remittances
  • Insurtech
  • Lending
  • Regtech
  • Digital banking
  • Crowdfunding
  • Blockchain
  • Cryptocurrency

And of that list, payments dominate. The fintech scene in MENA is comprised of 85% payments, money transfers, and remittances companies. This, the report details, is fueled by the prevalence of mobile devices and internet connectivity.


Lack of local talent

As with many regions across the globe, MENA struggles to find local talent with specialized fintech expertise. Perhaps exacerbating the issue, the region’s major growth sectors such as traditional financial services, oil, and healthcare attract many of the experts from the talent pool.


Again, MENA startups are not unique in their struggle with regulation. However, in its report, Milken pointed out that MENA fintechs often face extreme regulatory hurdles that outshadow typical regulatory challenges in their number and complexity. Examples include Visa requirements, licensing fees, quotas for employee hiring, and square footage requirements.

Cost of doing business

Regulation is just one aspect that adds to the cost of doing business in the region. Other factors are a high cost of living, licensing, and work visa costs.

For a more complete picture of the state of fintech in the region I highly recommend reading the full report. And to see MENA’s newest technology demoed live, and to hear from the most renowned industry leaders in fintech in the region, be sure to check out FinovateMiddleEast, taking place on November 20 and 21 in Dubai. Tickets are still available.


No Static At All: Finovate’s Greg Palmer Hosts Fintech’s Latest Podcast


Kick off your high-heeled sneakers – fintech’s got a brand new podcast.

The new program, the Finovate Podcast, was launched this fall by host Greg Palmer, Finovate VP of Strategy. New episodes of the show are released twice a week on Mondays and Wednesdays.

We talked with Greg about what the Finovate Podcast brings to the fintech community, what topics the podcast will focus on, and what guests the podcast will feature in the weeks and months to come.

Finovate: You just posted your 14th Finovate podcast. What kind of reception has the podcast received from the fintech community so far?

Greg Palmer: So far the reception has been really positive! Certain episodes have been more popular than others, but listeners seem to be responding well to the format. Part of the reason I wanted to do this podcast in the first place was because I feel like I’m always talking to interesting people who know so much more than I do, and I wanted to share their insights with a broader audience.

I’m finding that a lot of people aren’t really aware that some of the things that they take for granted would surprise others in the space, and it’s always fun when we can uncover something like that. And on the other side, the folks I’m interviewing all seem to believe that I’m making them sound smart – they are smart, of course, but I’m glad I’m making them sound like it!

Finovate: How does the Finovate podcast differ from some of the other fintech or technology podcasts out there?

Palmer: A lot of podcasts in the space are longer-form, and require a lot more time and attention. I deliberately wanted to create a podcast that was shorter, punchier, and more efficient. Partly that’s because of how my brain has been wired after working at Finovate for so long, and partly it’s because I think that’s the show I would want to listen to. Our episodes top out at about 13 minutes, which makes them a lot more digestible. And just like with the content on stage at Finovate events, if an episode isn’t your cup of tea, no worries, the next one will have a completely different focus.

Finovate: Who are some of the guests you’ve already had on the program? If someone were to go back and only listen to one or two of your previous podcasts, which ones would you highlight and why?

Palmer: We’ve already had a number of great guests, including our Best of Show winners from FinovateSpring 2019, and some non-product folks like Ghela Boskovitch, Karen Mills, Wayne Miller, and Alissa Knight. If you were going to start with one, I’d take the Ghela one first, she’s such a fascinating person, and we were able to get into some really good stuff on our first chat. Karen Mills was great, and so was Alissa Knight. I’m not supposed to play favorites with the Best of Show winners, but I really enjoyed speaking with Jeff LoCastro of Neener Analytics. Kevin Gosschalk from Arkose Labs was another fun one.

Finovate: Podcasts are an increasingly popular media channel. What can podcasts do to help stimulate interest in, conversation about, and broader coverage of financial technology?

Palmer: For me it comes back to the difference between the way people converse vs. the way they communicate in writing or other channels. I think fintech as an industry has a lot of mystique around it, and some of the concepts can be really intimidating. That intimidation can put people off or keep them from engaging with solutions that they should. A conversational podcast can really help to make some of the basic concepts easy to understand, and it can humanize the people behind the tech, which really helps. The more open, honest conversations we can have about the tech that’s driving the space, the better it is for everybody, and that’s where a podcast can really be an important asset.

Finovate: How has the podcast experience been for you? You are typically either on the stage talking to large audiences or behind the scenes working with startups. What do you get to do differently as a podcast host that you enjoy the most?

Palmer: I have to say I love it, and not just because I got to go out and buy some cool new audio toys to play with! My role on stage at Finovate events is to put other people in a position to shine, and my work behind the scenes with presenters ahead of time has very much the same goal. I want the people who come across our stage to be able to reach the audience in a meaningful way and create a real connection with them, even if they only have seven minutes in which to do it.

In the podcast, though, I get to be a more visible part of the conversation, which I appreciate, and it lets me try out some of my own thoughts on the space in a way that I haven’t been able to before. I think the biggest change since I’ve been doing the podcast, though, is the way I look at the people I interact with. Now that I have an amplifying outlet for the insights that I discover, I’ve started to look at people through this lens of “What can you tell my audience? What do you know that other people don’t know?” It’s a really interesting way to talk to people, and in my limited experience so far, I’m finding that I’m learning a lot myself as I ask those questions in my own head.

Finovate: Where do you see the Finovate podcast a year or two from now? What are your goals for the program?

Palmer: I want to grow the show, obviously, and I want to keep bringing a variety of guests in from all across the fintech ecosystem. My ultimate goal, though, is to use this platform as a way to share knowledge, and push the ecosystem to be better. There are a lot of exciting aspects of fintech, but there is so much work to do, and I hope my podcast can help people move forward in a confident way. If the Finovate Podcast can get to a point where it’s helping to inspire people, excite people, or even scare them a little bit, then it’s a huge success in my book.

Find out more about the Finovate Podcast. Want to amplify your message? Get involved as a supporter of the show.


Toronto-based Vouchr is helping banks make payments more social


Banks may tout the simplicity and speed of peer-to-peer payments service Zelle, but compared to PayPal-owned Venmo, the experience can seem impersonal.  The Venmo social feed, with its ubiquitous beer and pizza emojis, is promoted as a customer loyalty driver and an outreach tool for brands.

While most banks have shied away from social aspects of payment transactions, Toronto-based Vouchr is working to equip them with the tools to compete with Venmo and other social payment platforms. The five-year-old company has been working with the Royal Bank of Canada since 2017, along with another major Canadian bank it wouldn’t name. It will also soon launch with three U.S. banks and one European financial institution, founder Robert Balahura told Bank Innovation. He did not offer specifics on the dates of the upcoming launches.

“It delivers context — it’s like ‘Hey, I really appreciate you doing this job for me,’ rather than an impersonal money transfer,” he said.

Vouchr is a platform that can integrate with any payment transaction, noted Balahura. It involves adding rich media, videos, gifs and sounds to create a payment experience that resembles Snapchat. In some cases, Vouchr’s capabilities are embedded into mobile payments. However, when the receiving bank is not integrated with Vouchr, recipients receive a link through email that takes them to the experience.

By embedding Vouchr’s capabilities, institutions can benefit from increased digital adoption and enhanced customer loyalty, according to the company. “A lot of our customers are using our platform for the personalization and gifting of money transfers, and on the business-to-consumer side, we’re doing something similar for disbursements,” said Balahura. “This is a way to differentiate and compete — many [clients] find that important, while others use it to drive digital adoption.”

See also: Zelle posts 58% year over year growth in payment volume, as banks navigate UX

Despite strong Zelle transaction growth among U.S. institutions, getting the peer-to-peer payments experience right is still a challenge, Forrester principal analyst Gina Bhawalkar recently told Bank Innovation

“We’re seeing a lot of banks struggling to position Zelle in the right way,” Bhawalkar said. She added in some instances, Zelle can be difficult to find, and its capabilities aren’t always explained clearly to customers by institutions.

By embedding a social element to the payments transaction journey through Vouchr, it’s hoped that customers will find more reasons to use a bank’s payments platform instead of tools offered by third parties. “I think one of the reasons why this use case got traction is people wanting to compete with the Venmos of the world, and not having any functionality related to that,” said Balahura.

So far, Vouchr has raised more than $5 million, with investments from RBC, Wells Fargo and Western Union.


FIS Brings Core Banking Technology to Apple Bank


New York-based Apple Bank has selected FIS and its IBS system for its new core banking setup and will be moving to a hosted platform as part of a major transformation program, reports Alex Hamilton of Fintech Futures, Finovate’s sister publication.

According to FIS, the bank wanted to modernize its in-house technology with a new core platform. IBS will be deployed across the institution’s mobile banking, branch and ATM channels.

Apple Bank, which has 79 branches and assets of more than $15 billion, is the second-largest state-chartered savings bank in New York State.

“It’s all about the experience,” said Aditya Kishore, EVP and CTO of Apple Bank. “We chose the FIS IBS core banking platform because it enables us to deliver that consistent, seamless customer experience.”

Rob Lee, head of digital and banking at FIS, added that the vendor is confident that IBS will provide Apple Bank with a technology platform it needs “to support its growth well into the future.”

FIS demonstrated its Cardless Cash solution at FinovateFall 2016. Founded in 1968 and headquartered in Jacksonville, Florida, the company acquired payments firm – and fellow Finovate alum – Worldpay in March for $34 billion.

“Scale matters in our rapidly changing industry,” FIS Chairman, President, and CEO Gary Norcross explained when the Worldpay deal was announced. “Upon closing later this year, our two powerhouse organizations will combine forces to offer a customer-driven combination of scale, global presence, and the industry’s broadest range of global financial solutions.”


Adobe sees mobile powering early holiday shopping surge as shortened season looms


Adobe Analytics announced that holiday shoppers spent $19.7 billion so far, a 17.5% increase from a year ago. 

Consumers spent $2.7 billion on Veteran’s Day, a 38% increase from the year ago holiday, as retailers are pushing heavy discounts to offset the late Black Friday weekend, which doesn’t arrive until the end of November this year. 

Adobe reaffirmed its online holiday forecast of $143.7 billion being spent this season on holiday shopping, representing 14% growth from a year ago. 

Smartphones are continuing to gain importance as a shopping tool, as 34.5% used mobile for their holiday purchases, an increase of 15.3% from a year ago. 

“Holiday shopping has begun in earnest with consumers pouring into retailers’ websites to find the early deals of the season,” Taylor Schreiner, principal analyst at Adobe Digital Insights, said in a company release. “All signs point to strong sales growth this year, with consumers buying almost 50% more than last year through their phones.”

Schreiner noted that promotional prices are much steeper this year, with television prices alone down an average of 15% from October prices. 


Topics: Mobile Apps, Retail, Trends / Statistics

Companies: Adobe

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Wirecard partners with Here Mobility on integrated payments and ride sharing project


Wirecard partners with Here Mobility on integrated payments and ride sharing project

Wirecard announced an agreement with Here Mobility, a firm owned by major automakers, including Audi, Daimler and BMW, to create a partnership that will combine their respective business and consumer payments with geolocation services businesses. 

The companies initially plan to integrate Here Mobility’s Marketplace into Wirecard’s digital banking and payment app, called boon.Planet. The plan would allow for additional merchant integration in the travel, hospitality and events space, including airlines, hotels, restaurants and stadiums. 

The business would have access to more than 2 million vehicles in the U.S., Europe and Latin America. Wirecard, based in Germany, sees the combined business as representing a 10 billion euro ($11 billion) opportunity. 

“As mobility services become a part of consumers’ daily lives, and a personal vehicle takes the back seat, we find it essential to be a part of the mobility revolution,” Michael Santer, vice president for strategic alliances at Wirecard, said in a company release. “Both Wirecard and Here Mobility will bring the best of their platforms to this cooperation and we look forward to launching new and exciting projects.”

Cover image: Here Mobility

Topics: Mobile Apps, Mobile Payments, Region: EMEA

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ATMIA's Ron Delnevo sees cash access still playing critical role in banking, society


Like a lot of folks, Ron Delnevo flies for business and pleasure. But when he flies on British Airways, he gets peeved. That’s because, if you want to purchase food onboard, you better have a credit card handy, because the airline does not accept cash. 

The executive director for Europe at the ATM Industry Association thinks that’s just plain wrong. After all, the airline accepts cash donations for the needy. If cash is good for the needy, it should be good for the passengers as well.

“I fundamentally disagree with what they are doing. They have a duty, in my view, to accept cash,” he told ATM Marketplace when we caught up with him in Rome last month.  

A Scot who lives in Edinburgh, Delnevo has been in the cash business for two decades. He first got involved with ATMs in 1998, when he began working for Euronet. Later that year, the Kansas-based firm installed the first independently operated ATM in the U.K. At the time, the other 25,000 cash machines in the country were all owned by banks. A lot has changed since. 

Q: You actually remember that first independent ATM in the U.K.?

A:  It was in a SPAR convenience store in Stone Cross, a suburb of Birmingham. The shop manager was called Marie. The public loved the ATM. I know because I asked them the day after the ATM was installed. They didn’t mind paying £1 for a cash withdrawal. The nearest free-to-use ATM was three miles away.

Q: You’ve seen a lot in terms of the evolution of ATMs?

A: Absolutely. I’ve seen an amazing evolution in the U.K. In the beginning, everyone thought independent ATM operators would only operate what you Americans call surcharge machines, tucked away in little shops. The banks certainly thought that would be the case forever. But of course, we moved away from that business model to one which saw independents installing free-to-use ATMs everywhere, giving the British public better free access to cash, 24/7. So that surprised the banks. They never expected that. Now of course, the independents are the dominant players in Britain. They have more ATMs, both free and charging, than the banks have. 

Q: Is that a good thing?

A: It was good to start with, but now the banks are beginning to pull out of ATMs, and in a way, pull out of cash. In some countries, banks now think it would be a good idea for ATMs to stop being around because banks make money from non-cash transactions. There are many countries were cash is still immensely popular, and the banks would never think of trying to stop their customers from having access to cash. But in some countries — and we’ve seen examples of this in Sweden — there has been a reluctance to make cash available. We need to watch that. Banks need to stay involved but there is also room for independent operators to augment the service provided by banks.

Q: So you are pro cash?

A: I am not in favor of cash only. I believe that merchants should accept every significant payment method. Obviously, you need a measure of what is significant, and I would say any payment method that accounts for 5% by number of a country’s transactions should be accepted by merchants. People deserve payment choice. Cash is not king. The consumer is king, and they should have a right to choose. 

Q: Whose responsibility is it to keep the cash infrastructure alive in the U.K.?

A: It is a mixture of the banks and also the government. You cannot ask commercial organizations — and I’m not just referring to banks now — to take responsibility for that. Nobody can criticize Visa and Mastercard for wanting to maximize profits. They have a duty to their shareholders. You can’t look to them to safeguard the public interest. It has to be a government’s role to make sure that cash is a legitimate and accessible payment choice for the public.

Q: What country serves as a good model for payment choice?

A: Switzerland would be a perfect model. Switzerland is a counterbalance to the Swedish example. Sweden is the poster child for those looking to propose a cashless society. The Swiss central bank claims its people can pay with wearables, Apple Pay, cards, but they can also use cash. Interestingly, in a country where people have perfect payment choice, 70% of transactions are still made using cash, that is by number, and 45% by value

Q: What do you think about the U.S.?

A: The U.S. has led the way with ATMs. We’ve had independent ATMs in the U.S. since the late 1980s. It’s unfortunate that the average person pays $4.95 for a cash withdrawal. The whole industry, banks and independents, can make cash look too expensive, and there is a danger of that. But access to ATM systems is good in America. You have ATM operators — who maybe only have 20, 30, 40 ATMs — offering a genuinely local service to retailers and other businesses. That is not a model that works in many markets. Certainly not in the U.K., because the costs of joining the networks, and staying a member of the networks, are too high. 

Q: Living in the U.S., I’ve have never had trouble accessing cash or using cash. It’s not like that outside of the U.S.?

A: No it is not. We’ve got independent operators in the U.K., and they are very successful, but the problem is they are small in number. I want to see more competition in that sector, not just in the U.K. but all around Europe, and indeed all around the world. We need more independent operators because the fact is, many banks are deciding they don’t want to operate ATMs, and therefore, independents have to fill the gap, but they can only fill the gap if they are there. 


Walmart adds Siri voice ordering for grocery pickup and delivery


Walmart adds Siri voice ordering for grocery pickup and delivery

Walmart announced a partnership with Apple to allow customers to order online groceries with their voice on Siri, in a blog post from three executives, led by Tom Ward, senior vice president, digital operations for Walmart U.S.

Walmart Voice Order, which was introduced earlier this year, will now let customers add items to their Walmart online grocery cart just by talking to Apple’s Siri voice assistant, which is available on the iPhone and other Apple devices, including iPad, Apple Watch, Mac, HomePod and CarPlay. 

Customers can launch the order by saying “Add to Walmart” and then tell the voice assistant which particular items to order. The order will be fulfilled by Walmart personal shoppers, and customers can either pick up the order or have it delivered to their homes. 

Cover image: Walmart.

Topics: Mobile Payments, Retail

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PayPal's Xoom to launch domestic money transfers with Walmart and Ria


PayPal's Xoom to launch domestic money transfers with Walmart and Ria

Xoom, the international money transfer service from PayPal, announced its U.S. domestic rollout with strategic alliances with Walmart and Ria, which will let customers send funds from nearly 5,000 locations in the U.S.

Customers using Xoom’s website or mobile app can now send money that will be available for pickup at any of Walmart’s 4,684 stores or Ria’s 175  locations in the U.S.

“Many of our customers in the U.S. already send money to loved ones in the country, and they usually prefer that the money is available right away,” Julian King, vice president and general manager at Xoom, said in a company release. “The rollout reinforces our commitment to make money transfers fast, easy and affordable for everyone whether they are at home or on the go.”

Xoom said the services could benefit the nearly 44 million foreign-born people in the U.S. who send money transfers to their family and friends in their home countries.

The agreement comes just one week after Walmart agreed to add Ria, a subsdiary of Euronet Worldwide, for its money transfer program, while also extending a deal with MoneyGram. 

Cover image: PayPal.

Topics: Mobile Apps, Money Transfer / P2P, Retail

Companies: Euronet Worldwide, Inc., PayPal, Walmart

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Popwallet raises $4M led by Stout Street Capital to grow marketing automation platform


Popwallet raises $4M led by Stout Street Capital to grow marketing automation platform

Elias Guerra, founder and CEO of Popwallet

Popwallet, a New York-based marketing automation platform, said it raised $4 million in series seed funding, led by Stout Street Capital, according to a press release. 

Additional funding came from Loeb.nyc, 3Lines Venture Capital, Irish Angels, Cultivation Capital, MATH Venture Partners, Entrepreneurs Roundtable Accelerator and other angel investors from the marketing tech community. 

The Popwallet platform allows brand marketers to send personalized experiences like gift cards, loyalty cards, dynamic coupons and rebates to customers through Apple Wallet and Google Pay. 

“Mobile behavior used to be just about heads down experiences, playing games and scrolling social feeds,” Elias Guerra, founder and CEO of Popwallet, said in the press release. “But consumer behavior is changing.”

Funding will be used to increase sales and marketing and develop new partner integrations and develop additional partnerships. The company is looking in the near term to increase the number of mobile wallet activations across the enterprise ecosystem, as agreements have previously been reached with partners like Oracle or clients like Mars. 

John Francis, a partner at Stout Street, will join the Popwallet board, along with Guerra and CTO Wes Biggs. 

Cover image: Popwallet.

Topics: Loyalty Programs, Mobile Apps, Mobile Payments, Venture Capital

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Apple Card’s gender-bias claims look familiar to old-school banks


Apple Inc. pitches its new card as a model of simplicity and transparency, upending everything consumers think about credit cards.

But for the card’s overseers at Goldman Sachs Group Inc., it’s creating the same headaches that have bedeviled an industry the companies had hoped to disrupt.

Social media postings in recent days by a tech entrepreneur and Apple co-founder Steve Wozniak complaining about unequal treatment of their wives ignited a firestorm that’s engulfed the two giants of Silicon Valley and Wall Street, casting a pall over what the companies had claimed was the most successful launch of a credit card ever.

Goldman has said it’s done nothing wrong. There’s been no evidence that the bank, which decides who gets an Apple Card and how much they can borrow, intentionally discriminated against women. But that may be the point, according to critics. The complex models that guide its lending decisions may inadvertently produce results that disadvantage certain groups.

The problem — in Washington it’s referred to as “disparate impact” — is one the financial industry has spent years trying to address. The increasing use of algorithms in lending decisions has sharpened the years-long debate, as consumer advocates, armed with what they claim is supporting research, are pushing regulators and companies to rethink whether models are only entrenching discrimination that algorithm-driven lending is meant to stamp out.

“Because machines can treat similarly-situated people and objects differently, research is starting to reveal some troubling examples in which the reality of algorithmic decision-making falls short of our expectations, or is simply wrong,” Nicol Turner Lee, a fellow at the Center for Technology Innovation at the Brookings Institution, recently told Congress.

Wozniak and David Heinemeier Hansson said on Twitter that their wives were given significantly lower limits on their Apple Cards, despite sharing finances and filing joint tax returns. Wozniak said he and his wife report the same income and have a joint bank account, which should mean that lenders view them as equals.

One reason Goldman has become a poster child for the issue is that the Apple Card, unlike much of the industry, doesn’t let households share accounts. That could lead to family members getting significantly different credit limits. Goldman says it’s considering offering the option.

The bank said in a tweet it would also re-evaluate credit decisions if the borrowing limit is lower than the customer expected.

“We have not and never will make decisions based on factors like gender,” the company said. “In fact, we do not know your gender or marital status during the Apple Card application process.”

With this month’s snafu, Goldman has found itself in the middle of one of the thorniest laws in finance: the Equal Credit Opportunity Act. The 1974 law prohibits lenders from considering sex or marital status and was later expanded to prohibit discrimination based on other factors including race, color, religion, national origin and whether a borrower receives public assistance.

The issue gained national prominence in the 1970s when Jorie Lueloff Friedman, a prominent Chicago television anchor, began reporting on her own experience with losing access to some of her credit card accounts at local retailers after she married her husband, who was unemployed at the time. She ultimately testified before Congress, saying “in the eyes of a credit department, it seems, women cease to exist and become non-persons when they get married.”

FTC Warning
A 2016 study by credit reporting agency Experian found that women had higher credit scores, less debt, and a lower rate of late mortgage payments than men. Still, the Federal Trade Commission has warned that women may continue to face difficulties in getting credit.

Freddy Kelly, chief executive officer of Credit Kudos, a London-based credit scoring startup, pointed to the gender pay gap, where women are typically paid less than men for performing the same job, as one reason lenders may be stingy with how much they let women borrow.

Using complex algorithms that take into account hundreds of variables should lead to more just outcomes than relying on error-prone loan officers who may harbor biases against certain groups, proponents say.

“It’s hard for humans to manually identify these characteristics that would make someone more creditworthy,” said Paul Gu, co-founder of Upstart Network Inc., a tech firm that uses artificial intelligence to help banks make loans.

Upstart uses borrowers’ educational backgrounds to make lending decisions, which could run afoul of federal law. In 2017, the Consumer Financial Protection Bureau told the company it wouldn’t be penalized as part of an ongoing push to understand how lenders use non-traditional data for credit decisions.

AI Push
Consumer advocates reckon that outsourcing decision-making to computers could ultimately result in unfair lending practices, according to a June memorandum prepared by Democratic congressional aides working for the House Financial Services Committee. The memo cited studies that suggest algorithmic underwriting can result in discrimination, such as one that found black and Latino borrowers were charged more for home mortgages.

Linda Lacewell, the superintendent of the New York Department of Financial Services, which launched an investigation into Goldman’s credit card practices, described algorithms in a Bloomberg Television interview as a “black box.” Wozniak and Hansson said they struggled to get someone on the phone to explain the decision.

“Algorithms are not only nonpublic, they are actually treated as proprietary trade secrets by many companies,” Rohit Chopra, an FTC commissioner, said last month. “To make matters worse, machine learning means that algorithms can evolve in real time with no paper trail on the data, inputs, or equations used to develop a prediction.

“Victims of discriminatory algorithms seldom if ever know they have been victimized,” Chopra said.


£67,625 is the Amount UK People Would Need to Invest Before Seeking Financial Advice


New research from Nucoro, the Fintech company providing bespoke white-labelled technology, focused on delivering wealth management solutions to third parties, reveals that on average people would need to invest a minimum of £67,625 before seeking support from a financial adviser.  For some 28% of retail investors, the sum is over £100,000.

How much would you need to invest before seeking financial advice from an adviser Percentage of UK retail investors
Less than £5,00011%
Between £5,000 and £10,00012%
Between £10,000 and £25,00014%
Between £25,000 and £50,00018%
Between £50,000 and £100,00017%
Over £100,00028%

When asked which investment advisory service would provide the best returns on their money, 28% of retail investors said an independent financial adviser, but 27% thought that they could achieve the best returns if they managed the money themselves. Some 14% said another type of financial adviser accessed through their bank, or work for example would deliver the best returns, and 8% said using a robo-adviser would do this.

However, Nucoro’s findings show that retail investors expect financial advisers to work hard for their fees.  When asked what they would expect to pay in fees on a £50,000 investment, 68% said less than £500. One in five (20%) said between £500 and £999, and 12% said over £1,000.

Alarmingly, Nucoro’s research reveals that some retail investors are finding it hard to secure access to advice, with 6% saying they have been turned away in the past by financial advisers because they did not have enough to invest.

Nikolai Hack, COO Nucoro said: “Our research shows strong demand for financial advice when it comes to people managing their investments. However, the growing regulatory and compliance costs means that some financial advisers are having to insist on larger minimum levels of investments from investors before agreeing to take them on as clients. 

By outsourcing much of their technological and digital requirements to a specialist third party like us, wealth managers can not only reduce their costs but also improve their levels of efficiency and service, enabling them to take on more clients.”

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Daily Fintech unveils its Deans List of influential industry leaders to guide editorial direction




Daily Fintech, the analysis driven online publication, is announcing a team of global fintech leaders who will serve as on-going advisors on our editorial direction. The team is called the Deans List to reflect Daily Fintech’s focus on producing high-quality, insightful and independent fintech analysis that one associates with higher learning.

The initial list of five Deans results from Daily Fintech’s thorough vetting process that takes into account their professional achievements and track record related to the transformation of financial services through technology. The five Deans today are (in alphabetical order by family name):

  • Patrick Bucquet, Senior Partner and Co-Founder of Chappuis Halder & Co., an international management consulting firm dedicated to financial services, founded in 2009, operating globally from a Swiss head office.
  • Thomas Dunn, Chairman at Orbian, the longest-established firm in the Supply Chain Finance industry, with many awards including program-specific award recognition with Osram, Siemens and General Mills, Inc. Thomas Dunn and Orbian were profiled on Daily Fintech here.
  • Hélie d’Hautefort, Co-founder and CEO at Globcoin, an online multicurrency payments platform. Prior to Globcoin, he set up the first European currency overlay manager, which today has over USD23 billion of assets under management.    
  • Hogi Hyun, Founder and Director at Abacus Capital, a Southeast Asian fund management group based in Singapore with offices in Jakarta and Bangkok. Hyun brings over 30 years of banking and investment experience gleaned mainly in Asia and today oversees investment activities on behalf of clients in the private and public sectors across multiple asset classes and industries.

The announcement of the Deans List comes soon after Daily Fintech implemented its paid membership service on 17 September, 2019. The move to a paid model came after five years of the company providing its original daily fintech insights for free.    

Announcing the unveiling of the Deans list, Daily Fintech CEO Bernard Lunn said, “We are very privileged to have these industry leaders join us as Deans and to help Daily Fintech decide on major new shifts in our content, so we can continue to deliver the kind of strategic fintech insights our members want. These accomplished fintech industry leaders come from all over the world and so will have the dual role of being both the voice of and a guide for the global fintech community on the most important issues impacting this increasingly borderless industry.”


MAS Helps Develop Blockchain-based Prototype for Multi-Currency Payments


The Monetary Authority of Singapore (MAS) has led the successful development of a blockchain-based prototype that enables payments to be carried out in different currencies on the same network. 

This prototype network, developed by MAS in collaboration with J.P. Morgan and Temasek, has the potential to improve cost efficiencies for businesses. It is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications. The applications that were tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019. 

This development marks the latest milestone for Project Ubin which is into its fifth phase. Building on the work of Phase 4 of Project Ubin, the payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly. It will also offer additional features to support use cases such as Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance. 

“Blockchain technology has great potential in transforming businesses and opening up new business opportunities.”

Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network. 

John Hunter, Global Head of Clearing and Interbank Information Network (IIN), J.P. Morgan, said, “J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.” 

Chia Song Hwee, President & Chief Operating Officer, Temasek, said, “Blockchain technology has great potential in transforming businesses and opening up new business opportunities. To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and J.P. Morgan for the Ubin platform. The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance. We look forward to deeper collaboration and support for Singapore’s pioneering efforts in the blockchain space.”

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FinovateMiddleEast: Banking on the Future in the Age of the Customer


How can technology make the movement of money more efficient and secure? How can financial inclusion and financial wellness lead to more prosperity and happiness for more people?

At FinovateMiddleEast next week (November 20-21) in Dubai, we’ll answer these and other questions as we investigate the current state of fintech innovation in the Middle East. Below is a sample of some of the sessions we’ll feature on Day One of the conference. We’ll take a look at our Day Two agenda later this week.

Building the bank of the future – Finance in 2030

Looking ahead to the next 10 years of banking innovation, as well as walking you through the last 10 years of the world and banking digital transformation, this keynote presentation will show the context and tangible examples of state of the art digital implementations in financial institutions across three continents, and give you an outlook into future developments.

The power of partnerships: Collaboration with fintechs for mutual benefit

With an ever-increasing number of startups bringing new, agile and fresh approaches to traditional processes, and banks bringing the visibility, trust and backing to deliver innovation, how do you assess which model of partnership will work for you?

The challenges facing fintech: Raising capital

  • Assessing the leaders seeking to fill the funding gap in the fintech ecosystem
  • Exploring the current conditions to make fintech development increasingly viable
  • Supporting fintech from the outset and identifying investment opportunities
  • Examining how regulatory changes are incentivizing growth: looking to accelerators and sandboxes to incentivize growth
  • Overcoming the funding challenges for financial innovation, and assessing how far we can expect funding gaps to be filled as investment arms continue to emerge
  • Learning from overseas: how VCs across the globe approach funding, and what can be gleaned
  • Understanding how the VC ecosystem will continue to evolve in the region

Using technology to deliver greater customer value: The customer-focused age

  • Understanding the new customer-centric, experience-based economy, and adapting accordingly
  • Working at speed to meet customer needs in exciting and relevant ways
  • Embedding client excellence into company mindsets: moving from a process-led to customer-led culture, and empowering teams to put the customer at the centre of business decisions
  • Managing client experience with limited budgets: overcoming hurdles to deliver customer satisfaction
  • Personalizing interactions and devising cross-selling models: making the most of your customer interactions
  • Exploring the importance of increase digital touchpoints to improve efficiency and meet customer expectations
  • Harnessing digital services can enhance customer satisfaction and drive loyalty

Financial inclusion: Where are we now, and what lies ahead?

  • Exploring the latest banking initiatives to bring access to financial services to the financial excluded
  • Determining the untapped opportunities, from loans to payments initiatives, of reaching the unbanked
  • Showing how financial democratization initiatives can be a force for good, improving wider society

Innovation – Moonshot thinking and the art of walking the earth

Why does innovation sometimes need time and patience? Some experiences from the wealth management area.

Innovation is kind of like the giant leap for mankind – sometimes you make it by chance and change history, but more often it does takes a lot of patience and many small steps for the “mooonshot thinking” to materialize. And interestingly, what you achieve alongside your long march may be more successful than what you get in the end…

Regulation: a catalyst for change?

  • Defining the regulatory priorities of the region, and where governments are becoming increasingly involved.
  • Overcoming the challenges of meeting different regulatory expectations to allow for scaling.
  • How do regulations in different regions differ, and what can we expect moving forward?
  • Now that sandboxes are established in the region, what have the regulators’ experiences been to date, what do companies need to know ahead of applying, and what trends are regulators seeing amongst applications to sandboxes?

Transforming the customer experience: an inside-out and outside-in approach for true customer-centricity

An outside-in approach means creating experiences for customers and establishing what your customers are looking for. An inside-out approach means determining how organizations need to change the way we do things.

Driving and delivering end-to-end digital innovation

  • Applying strategies for cohesive innovation and transformation across your organization, and how to drive change
  • Developing digital innovation initiatives with the customer front and center
  • Nurturing talent: adapting internal culture and incentivizing talent in order to bring the most innovative people into the fold

Tickets to FinovateMiddleEast are still available. Visit our FinovateMiddleEast page to register and get more information on how to plan your visit.


Consumer Mixed Reality App Installs to Reach 10 Billion by 2024, Driven by Social Media & Games


A new study from Juniper Research has found that the number of consumer mixed reality app installs will reach 10 billion by 2024; rising from 3 billion in 2019. Mixed reality overlays interactive digital images and videos onto the real world through a smartphone, tablet or smart glasses.

The new research, Consumer Mixed Reality: Emerging Opportunities, Vendor Strategies & Market Forecasts 2019-2024, identified social media and games as the key app categories that will drive adoption. It forecasts that these categories will account for over half of the global mixed reality market value by 2024.

In-App Purchases Key to Monetisation Success

The new data shows that 75% of the consumer mixed reality market, by value, will be attributable to in app purchases by 2024. However, the research warns that these apps will suffer from high app abandonment rates similar to the wider app market. In response, app developers are urged to continually update offerings over the lifecycle of the app to ensure that the user proposition is maintained.

Research author Sam Barker noted, “Despite temptations to continually grow the app user base, app developers must have a primary focus on retaining existing users. Successful mixed reality app developers, Niantic and Snap, have continued to leverage their significant user bases by ensuring that app content is consistently refreshed, therefore benefiting from continued user spend”.

Consumer Mixed Reality App Installs to Grow by 170% over Next 5 Years

$11bn from Advertising Content

The research predicts that advertising spend over consumer mixed reality apps will reach $11 billion by 2024; rising from $2 billion in 2019. In order for advertising over mixed reality content to become appealing to high spending advertisers, the research recommends that advertising processes must mirror advertising processes in the wider market..

It urges the ecosystem to adopt advertising attribution platforms and fraud prevention tools, in order to attract high advertising spend. However, the research also warns that over-exposing users to advertising content will lead swiftly to high disengagement levels.

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US Bank’s Venturo: Hackathons can reveal banks’ shortcomings


According to Dominc Venturo, chief innovation officer at U.S. Bank, any new idea incubated within the bank should have a measurable effect on customer experience. Venturo said the bank, which is headquartered in Minneapolis and has $467 billion in assets, looks at three criteria when launching any new innovation effort, including improved customer experience; added …Read More

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Scotiabank, Fifth Third, SunTrust: Amazon, Apple inspiring UX


The popularity of Amazon Prime and Apple is forcing bankers to rethink user experiences, industry practitioners said at Bank Innovation Build.

With the growing adoption of digital banking platforms, user experience specialists said human experiences should underpin digital product roadmaps, with technology performing a supporting role.

“Technology is an enabler, but user experience design provides meaning to technology,” said Andy Vitale, head of user experience design at SunTrust. “It’s about going to the actual person and involving the people that use our products — all of them — and making sure we’re finding out what their needs are.”

See also: BofA, Prudential: Retail is setting a standard for customer expectations in finance

The bankers noted that big tech platforms are influencing the design of mobile app experiences. Despite concerns around the overreach of tech platforms (the so-called “creep factor”), customers are increasingly asking for banking services to be intertwined with the social networking platforms they use every day, said Shawn Rose, executive vice president and chief digital officer of Scotiabank.

Apple, Amazon and Google already provide bank-adjacent activities. We’ve learned pretty significantly from that industry,” he explained.

Rose referenced a recent example where Scotiabank updated its app and removed a feature that allowed users to see their account balances as soon as they opened the app. The bank removed that feature in an app update, assuming faster performance overall would eliminate the need for the quick balance check feature.

Following the removal of the tool, the bank noticed an uptick in the number of negative reviews, forcing it to add the quick balance check feature again. The example highlighted the need to avoid seeing user experience design from a product-centric perspective. Instead, banks need to focus on customer needs, and build empathy into the design process, he explained.

From Fifth Third Bank‘s perspective, advice from other industries facilitates a better design process. According to the bank’s lead design catalyst Dan Mecher, Fifth Third’s design team recently consulted a corporate storyteller from Procter & Gamble and the director of visitor experience at the Cincinnati Zoo and Botanical Garden, on user experience best practices. In addition, in user feedback surveys, Fifth Third queries customers on the how banking apps compare to other direct-to-consumer digital platforms.

“We’re not just competing with the bank across the street anymore, it’s the customers last best experience,” said Mecher. “We’re asking them ‘What are your favorite apps to use? What’s the best product experience that you’ve ever had, regardless of industry?’”