Stuck-in-the-past Japanese banks wary of fintech revolution

https://bankinnovation.net/allposts/biz-lines/corp-bank/stuck-in-the-past-japanese-banks-wary-of-fintech-revolution/
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Japan’s effort to nudge its more than 100 struggling regional lenders into the digital age is floundering.

More than a year after rules to spur open banking were issued, small lenders are stuck in a back-and-forth with startups over fees for access to client account data, according to a Financial Services Agency official. Fintechs that must reach agreements with individual banks before a May deadline say they don’t have the resources to pay hefty charges or crisscross the country convincing hold-outs.

The impasse risks embarrassing policy makers keen to lift Japan off the bottom of a ranking on fintech adoption. A successful move into open banking would put the Asian nation in the company of the U.K. and Australia, which are freeing up data access to spur competition and create innovative financial solutions.

Japan is hoping for voluntary partnerships where startups help overhaul a stodgy industry hammered by years of negative interest rates, deflation and, for rural banks, depopulation. Mired in shrinking profits as the hinterland ages and empties of its young, some lenders are reluctant to ink deals that promise vague future returns but demand immediate investments.

“It’s difficult for some banks to fork out additional costs, even if they’re investments for the future, when it’s not clear how much they can profit by doing this,” said Junichi Kanda, an executive officer at fintech Money Forward Inc.

Progress has been slow. Just 25 of 59 eligible fintech companies had signed contracts with any banks as of September, the most recent FSA figures show. Only 57 of 130 lenders had any one-on-one agreements.

Teaming up with fintechs can give lenders a quick way to offer new digital services, while also gaining a fuller view of customer finances, the FSA official said, asking not to be identified in accordance with the agency’s policy. The official hoped talks would accelerate as the deadline neared.

Money Forward, one of the biggest startup participating in the project, has made agreements with fewer than half the 100 banks it wants to tie up with, Kanda said. He tries to convince banks that sharing data via application programming interfaces, or APIs, will migrate customers to mobile platforms from costly branches and automated teller machines.

Money Forward is developing apps for lenders including Gunma Bank Ltd. and North Pacific Bank Ltd. For smaller peers, Kanda said negotiating with banks around the country is daunting, even with the FSA and industry groups arranging match-making sessions.

Another fintech, Moneytree KK, says putting a financial burden on startups could undermine the initiative. “We’re not a competitor to banks, we’re there to help them win,” sales chief Taizo Miyagami said.

Concerns about data-leak risks have played a role in some lenders’ slow adoption of open banking, according to Hideki Osawa, a senior consultant at Nomura Research Institute.

The lack of a dominant fintech player of the scale of China’s Alipay and WeChat Pay — which have reams of data on individual spending — is also a stumbling block in luring banks on board.

For the startups, failure to reach agreements means they risk being stranded without data access after May, disrupting services for households and small business owners who use their budgeting and accounting apps. That’s because the current practice of screen scraping without a bank’s permission will end after the deadline.

Some banks may decide to offer data access “for free or very low fees if they see significant benefits,” Japanese Bankers Association Chairman Makoto Takashima said at a briefing in December. “On the other hand, there could be cases where banks don’t see benefits and can’t even cover the costs of maintaining systems.”

Rural banks have also been frustrated by the process. Joyo Bank Ltd. President Ritsuo Sasajima, said his firm was quick to build APIs but short-staffed fintechs have been slow to respond. Still, Sasajima, who chairs the Regional Banks Association of Japan, said that on the whole “progress has been made.”

Traditional banks often have a “fortress mentality,” said James Lloyd, who leads Asia-Pacific fintech and payments at consultancy EY. Ultimately, “this will only work if the banks themselves see value in opening up.”

— Taiga Uranaka and Yuki Hagiwara (Bloomberg)

https://bankinnovation.net/allposts/biz-lines/corp-bank/stuck-in-the-past-japanese-banks-wary-of-fintech-revolution/

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Visa rolls out cash access incentives for UK merchants in underbanked communities

https://www.mobilepaymentstoday.com/articles/visa-rolls-out-cash-access-incentives-for-uk-merchants-in-underbanked-communities/
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Visa is launching a program in the U.K. designed to increase access to cash in more remote communities where bank branches and ATM coverage has been diminishing for years. 

Following up on a 2019 pilot program with Lloyds Banking Group, Visa is expanding the program where it will offer incentives to merchants to provide cash back to customers using a Visa debit card. 

“As with all innovation, the opportunity to run a pilot allowed us to accelerate the development of the scheme,” a Visa spokesman told Mobile Payments Today via email. “Our ‘access to cash’ pilot with Lloyds Banking Group in early 2019 was a vital step towards getting us to where we are today and being able to launch the industry wide scheme.”

Lloyds, one of the largest banking groups in the U.K., has more than 7,000 branch locations, 50,000 ATMs and also offers services through 11,500 Post Office locations. However, the cash access problem has been a longstanding issue for many low income and rural communities, where customers have a dearth of bank branches and often have to make long drives to get to a local teller or bank ATM to make a deposit or cash a check. 

In addition, many ATM machines in retail stores offer limited services compared with the more robust capabilities of an in-branch ATM machine. 

“In many rural U.K. towns and villages, there are no remaining bank branches, requiring residents to commute to a nearby town to access cash,” Nick Maynard, lead analyst at Juniper Research told Mobile Payments Today via email. “This is a problem for those who lack transport, particularly the elderly, where digital payments are not well established.”

Maynard said a program like this can help, because retailers in the past have had little incentive to offer cash to customers in place of available banking services. 

“Network led initiatives such as this can improve this situation if the incentives are well judged,” he said. 

He noted that rival Mastercard has a similar program in the U.K. to improve cash access. 

Cover image: Visa

https://www.mobilepaymentstoday.com/articles/visa-rolls-out-cash-access-incentives-for-uk-merchants-in-underbanked-communities/

Will Grubhub's new platform solve fast casual's speed problem?

https://www.mobilepaymentstoday.com/news/will-grubhubs-new-platform-solve-fast-casuals-speed-problem/
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Will Grubhub's new platform solve fast casual's speed problem?

Provided

In an effort to solidify its status as a leader in the $250 billion U.S. takeout market, Grubhub has launched Ultimate technology, a hardware and software solution that integrates all restaurant ordering channels into one system.

“Diners have come to expect ordering ahead for pickup to breeze through busy rush hour crowds and grab their morning coffee or lunch, but currently they can only enjoy this convenience at large QSRs,” Grubhub Founder and CEO Matt Maloney said in a company press release. “Ultimate now gives restaurants of any size this ability to please diners with an easy, digital pickup experience.”

Replacing error-prone handwritten scribbles and shouts, the platform connects the front- and back-of-the house with diners, giving them a clear view of their order status, according to Maloney, who said the company went a step further by building integrated kiosks and a digital queue — in person and online — so diners can see the exact status of their order at any time.

“Most people do not want to order in person or by calling if they have an alternative, and by integrating pickup with delivery orders our restaurant partners have a complete picture to more efficiently manage their operations,” he said.

Already in over 100 locations, the Ultimate pilot rollout had focused on New York City and Chicago where restaurants have seen pickup demand impact their bottom line.

“Since installing Ultimate, I’ve seen sales increase by 10% and employee costs decrease by 15%. I have staff preparing food instead of taking orders and my customers love the kiosks and transparency. This is a millennials’ dream come true,” Joe Germonatta of Art Bird & Whiskey Bar at Grand Central Terminal in Manhattan, said in the release.

How it works

Four components make up the Ultimate technology:

  1. Lightweight point of sale with direct integration to the Grubhub web and mobile app.
  2. Heads-up customer displays to show real-time order estimates across all channels.
  3. In-store self-ordering kiosks to complement the Grubhub app.
  4. Kitchen display system .

“Ultimate is exactly what I was looking for but didn’t know it,” David Morton, co-owner of Chicago-based DMK restaurant group, said in the release. “We have designed our new restaurants around this technology because it allows us to provide better service to our customers with less effort and cost. This is a game changer in quick-serve and fast casual restaurants.”

How it began
With more than five years of research and development, Ultimate began as an in-app queue where college students could order ahead while sitting in class and have a real-time view of exactly how many orders were ahead of them. They could continue to monitor their order status and would be notified when their order was ready. This transparency allowed students to manage their schedules and avoid skipping meals or eating at other restaurants because of unexpected long lines at their favorites and still get to their next class on time, said Zia Ahmed, senior director of dining services at The Ohio State University.

“Students enjoy the convenience of self-ordering opportunities, and we’ve seen demand for our food service operations increase since installation across our campus,” he said in the release. “It increased the efficiency of our operation while providing a service that is highly desired by our students,”

In addition to ordering ahead via Grubhub, in-store ordering kiosks allow restaurants to migrate employees away from the cash register and back to food prep lines and fulfillment areas, expediting and ensuring accuracy of orders and increasing throughput. Real-time ETAs appear once an order is placed, allowing customers and delivery drivers to time their arrival, avoiding unnecessary and frustrating waiting, according to the release. Driving further efficiency, the queue seen by customers is identical to that seen by all employees throughout the restaurant, sharing automatic updates at each stage of the order process.

A solution for stadiums and a food halls?
The technology also unlocks the potential for stadiums and food halls to join the next generation of restaurants, opening up a new experience for today’s digitally-savvy diner, according to the release. Instead of standing in never-ending lines, sports fans and concert-goers can order ahead directly from their seat via Grubhub, watching their place from the in-app queue for the exact moment the order is ready.

Food halls are able to provide diners a real-time view into wait times for a variety of restaurants, giving the diner control of balancing the choice between restaurant selection and time to food pickup.

Grubhub works with with more than 140,000 restaurant partners in over 2,700 U.S. cities and London.


Topics: Mobile Payments, Restaurants

Companies: Grubhub


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https://www.mobilepaymentstoday.com/news/will-grubhubs-new-platform-solve-fast-casuals-speed-problem/

WorldRemit enters global remittance partnership with Alipay

https://www.mobilepaymentstoday.com/news/worldremit-enters-global-remittance-partnership-with-alipay/
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WorldRemit announced a partnership with Alipay, the world’s largest mobile wallet, which will allow customers to send cross-border money transfers from the WorldRemit website or mobile app to a recipient using the Alipay app. 

London-based WorldRemit allows customers to send money from 50 countries to 150 countries around the world and is 100% digital for those sending money. 

“Our vision is to build a mobile-first, international payments service and we’re excited to work with Alipay as a partner,” Tamer El-Emary, chief commercial officer at WorldRemit, said in a company release. “The partnership will focus on innovation, customer experience and speed to market.”

 


Topics: Money Transfer / P2P, Region: APAC, Region: EMEA

Companies: Alipay


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https://www.mobilepaymentstoday.com/news/worldremit-enters-global-remittance-partnership-with-alipay/

PayPal, China's UnionPay sign global agreement on market access

https://www.mobilepaymentstoday.com/news/paypal-chinas-unionpay-sign-global-agreement-on-market-access/
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PayPal, China's UnionPay sign global agreement on market access

Jim Magats, SVP global payments at Paypal and Larry Wang, VP at UnionPay International

PayPal Holdings Inc. has partnered with UnionPay International to allow millions of customers to use the Chinese mobile wallet with PayPal’s 24 million global merchant partners, while PayPal will gain access to the lucrative Chinese payments market. 

PayPal will support UnionPay acceptance everywhere in the world where PayPal is accepted, which will open up shopping opportunities at thousands of international retailers for UnionPay customers. 

“At PayPal, we are proud of this landmark agreement with UnionPay International and the global impact that this creates for our joint customers, building on our status as the first foreign payments platform licensed to process online payments in China,” Jim Magats, senior vice president, global payments at PayPal, said in a company release. “This partnership will give UnionPay customers more choice when shopping cross border and has the ability to contribute to the overall growth of China’s e-commerce ecosystem.”

He said PayPal will also have access to physical retailers that accept UnionPay, both in China and internationally. 

Union Pay can now be added to PayPal digital wallets in Australia, Singapore, South Korea, Thailand and the Philippines. The companies plan to add another 30 countries this year.

“With about 130 million UnionPay cards issued outside mainland China, UnionPay cards are becoming an important payment option of more and more global customers,” Larry Wang, vice president, UnionPay International, said in the release. “We are very glad to deepen (our) collaboration with PayPal, the global leader in e-commerce.”

The companies will also explore the application of new products and payment modes in cross-border payments. 


Topics: Card Brands, Mobile Apps, Mobile/Digital Wallet, Mobile Payments, Region: APAC

Companies: UnionPay International, PayPal


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https://www.mobilepaymentstoday.com/news/paypal-chinas-unionpay-sign-global-agreement-on-market-access/

Mastercard opens cyber research center in Vancouver

https://www.mobilepaymentstoday.com/news/mastercard-opens-cyber-research-center-in-vancouver/
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Mastercard opens cyber research center in Vancouver

Ajay Bhalla, president, Cyber & Intelligence, Mastercard, Ajay Banga, president & CEO, Mastercard; Navdeep Bains, Minister of Innovation, Science and Industry and Ian McKay, CEO, Invest in Canada meet at the World Economic Forum in Davos

Mastercard has opened a Global Intelligence and Cyber Centre in Vancouver, Canada, allowing it to research digital and cyber security, artificial intelligence and the Internet of Things, according to a company press release. 

Mastercard invested $510 million into the facility, which is being developed with help from the Canadian government’s Strategic Innovation Fund. Mastercard will use the center to develop cyber solutions for the global payments ecosystem. 

“Ensuring payments are both convenient and secure has always been a top priority for Mastercard,” Ajay Banga, president and CEO at Mastercard, said in the release. “The Vancouver centre will help us meet the growing demand for technology solutions to reduce the cost of cyber attacks, enable today’s connected devices to become tomorrow’s secure payment devices and address the growing vulnerabilities associated with the Internet of Things.”

The centre is located in the city’s Old Restored Stock Exchange building, which is home to the NuData security team and members of Mastercard’s Research & Development, Operations & Technology and Cyber & Intelligence divisions. 


Topics: Card Brands, Internet of Things, Region: Americas, Security

Companies: MasterCard


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https://www.mobilepaymentstoday.com/news/mastercard-opens-cyber-research-center-in-vancouver/

Blueprint One- a building plan for a Lloyd’s digital/culture change decade, or pie in the culture change sky?

https://dailyfintech.com/2020/01/23/blueprint-one-a-building-plan-for-a-lloyds-digital-culture-change-decade-or-pie-in-the-culture-change-sky/
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It’s really a tour de force, the 146 page Blueprint One recently released by leadership at Lloyd’s, a detailed road map for the staff and approximate ninety syndicate players that comprise the firm, its reinsurers, customers, associated MGAs, vendors, brokers and agents.  Plans, flow charts and implementation strategy that are planned for the next two years, with all the new moving parts in synch by close of 2022.  Oh, and did I mention the £35 billion in annual premiums that the organization generates through its stakeholders?  Bold plans for a three-hundred-year tenure organization.  And there is the unmentioned tension- an entrenched business model planning to evolve into an agile, cutting edge tech leader.

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’.

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Lloyd’s is the industry standard bearer for specialty risk management, AKA ‘the stuff an underwriter can’t thumb to in his/her U/W manual’.  Its technique and mystique have evolved during the more than three centuries since a few gents sat in front of some pints and pondered financial hedges against loss of shipping cargos.  Why then, does the firm think that several months of research, interviews, participant interviews, technology vendor schemes, and resulting blueprint from Lime St are the best answers to changing the course of the culture and operations of a complex global insurer?

Consider this voice from the street (location to remain unmentioned):

“Sadly, it seems that Lloyds underwriters have developed a degree of contempt for the XXXX market, over the last year I’ve seen the worst performance from certain Lloyds underwriters I’ve ever experienced in the last 20 years or so. In particular, not having renewal terms ready in time when renewal submissions have gone in well on time. It’s definitely a hard market from where I’m standing, and it isn’t particularly civilised either!”

Well, hard markets currently abound for many reasons across the globe, and anecdotal responses are a little unfair.  But the basis of the speaker’s concerns may not be- Lloyd’s is a huge, multi-variate, multi-cultural, global organization that cannot be changed under dictate, singular plan, or silo-driven flow chart.  Underwriters remain subject to the performance matrix of the day, and grand plans from on high take a rear seat when quotas aren’t met, or loss ratios are trending north.  Additionally, the firm remains entangled in aftereffects of sexual harassment accusations, mitigating the perceived impact of an over-arching office culture of suits and club decorum (although well past the days of PFLs), and recent years’ declining profitability.  Can Blueprint One be communicated, integrated and adapted uniformly in the face of these challenges? And can the evolution avoid the strong effects of the “Quarterlies?”

Culture and process changes aren’t new with the advent of Insurtech, innovation, globalization or change of leadership.  Much of what the blueprint discusses has its foundation in technology and transparency across the organization’s depth and breadth.  At its core we are talking insurance, so the topic may be busy, but it’s not rocket science.  Identify risk, understand risk, price risk, hedge risk, service occurrences that confirm risk (claims), and pay less than is taken in.  The firm is smart, therefore, to look to leverage technology for easy inclusion of participants across many regions and many forms of access, easier aggregation of business, more effective application of information, collection of data, and so on.

Consider the Blueprint’s ‘what it is’:

  • The firm’s strategic intent, description of vision.
  • Current thinking on each of six identified solutions-
    • Complex Risk platform
    • Lloyd’s Risk Exchange
    • Claims Solution
    • Capital Solution
    • Syndicate in a Box
    • Services Hub
  • Details of the initial phase of each solution
  • Invoking cooperation from Lloyd’s market players in the firm’s future
  • How and why success will be gained.

That’s on page 7 of the 146 page blueprint; it is an ambitious, wide scale road map.

It’s clear the more complex a plan is the greater the chance of incomplete implementation; the more incomplete or disuniformity of implementation the greater the chance of not achieving success.  The firm has its plan, its foundation for success, if the plan can be implemented.

Skipping forward to “Why we will succeed,” on page 11 , and I chime in with some observations that the principles suggest from other large org’s culture/ops changes:

  1. Capitalize on prior market investments (that’s funds spent previously on innovation).
    • This the “not throwing the baby out with the bathwater” approach. How to include the capital investments of the past few years in how we move forward.  A small anchor on innovative thought?
  2. Learn from the past
    • There are plenty of reorg carcasses along the wayside, let’s figure ways to have innovation not die at birthing. Of course putting the words, “Our collaborative approach to building the Future at Lloyd’s will ensure the solutions are designed for the benefit of Lloyd’s and the wider London market,” are contradictory right out of the box.  Perhaps solutions designed by and for Lloyd’s global staff and customers might sound more collaborative.
  3. Communicate regularly
    • Cascade those ideas from Lime St. to the world.
  4. Ensure the corporation and the market has (sic) the right skills to deliver the plan
    • Collaborators- prepare to invest time and money in change management plans that will be as successful as any change management programs. Can’t buy success.
  5. Deliver value to the market quickly
    • The rollout cannot interrupt business. There are those darn quarterly reports.
  6. Deliver the technology in parts
    • Deliver solutions in parts- of course each discipline needs different starting points; the law of unintended consequences will prevail.
  7. Retain control and operational responsibility (for tech)
    • Autonomy is resolving rollout issues will be suppressed to ensure uniformity. There will be scapegoats.
  8. Ensure the appropriate governance is in place
    • Central control of the collaborative integration. Decision making is the firm’s.

Rather than ramble on I am going to shamelessly borrow some innovation/org change concepts from a Property Casualty 360 article penned by Ira Sopic, Global Project Director at Insurance Nexus that has an apt perspective- “Agility is the key to technology innovation for insurers.”  But let’s build a contrast from Lloyd’s presentation.

Agile?  Can a global, £35 billion insurance giant be agile?  Do Lloyd’s customers demand innovation, or will they benefit materially from innovation?  We can see what the author and Lee Ng, VP of Innovation at Travelers Insurance say.

Fundamentally, the article notes org agility means looking at how decisions are made across an org and making significant changes.  That’s ambiguous until the addition of, “you can’t prove innovation before it happens.”  Uncertainty of innovation’s results can be overdone with analysis.  ‘Agile’ is the opposite of ‘waterfall’, an approach where plans and decisions are made at the top and cascaded down through the org as steps in a process are encountered.  Rolling out comprehensive plans by their nature inhibit iteration- big plans have milestones, have successive designs, benchmarks and schedules.  Agile has ideas, iterative maps, acceptance of failures.  Lloyd’s has established a grand approach to the former method- I kid you not, here’s an exemplar flow chart of planned core technology:

Core tech

Many participants influencing and accessing the tech core of the firm, and those magical skeleton keys to open the doors- APIs and interfaces.

Continuing, agile can be successfully piecemeal- protect the primary ROI factors of the biz, experiment with agile ways of working with collateral functions, build the innovative environment without whacking the quarterlies.  The inherent problem with piecemeal approaches?  They are hard to measure for success, and hard to program into project management software.

Another agile tack to take? “Done is better than perfect’.  Resist the urge to over plan, over measure, and to set expectations that the first attempt is a go or no go for the entire org.  A popular innovation concept applies- try, and fail fast.  Then try again.  There are many vendors who are experts in narrow parts of an org’s innovation path- it’s OK to rely on them.  Investment in a POC or two is as good as implementation.

Perhaps another day will allow discussion of the plans for the six Solutions, particularly Claims and Risk Exchange (the nexus of provision of service and of customers’ expectations from the firm.)  In spite of a skeptical take on the Blueprint I certainly want Lloyd’s to remain the bastion of risk management in a increasing risky world, but the concern is the firm is approaching this insurance elephant as a full take away meal, instead of as tapas.

In closing consider this- if there are five levels of Blueprint implementation and each effort has a 98% probability of success, after the five levels there is an aggregate probability of integration success of 90%.  That’s not bad, unless the interplay of five operational areas serving clients is considered with 90% effectiveness at play- aggregate 59% average Blueprint compliance outcome.

Consider those little bites, Lloyd’s.  The industry is pulling for you.

You get three free articles on Daily Fintech; after that you will need to become a member for just US $143 per year ($0.39 per day) and get all our fresh content and archives and participate in our forum.

https://dailyfintech.com/2020/01/23/blueprint-one-a-building-plan-for-a-lloyds-digital-culture-change-decade-or-pie-in-the-culture-change-sky/

Brex to launch treasury, insurance and loan products

https://bankinnovation.net/allposts/biz-lines/payments/brex-to-launch-treasury-insurance-and-loan-products/
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Brex, a corporate card and financial product startup aimed at businesses, plans to broaden its product ecosystem beyond bank accounts and cards. Chief Operating Officer Paul-Henri Ferrand told Bank Innovation that the company aims to add insurance, lending and treasury products.   

The Brex Cash account

“We’re building our operating system around our real-time underwriting and our financial stack. We think we can deliver a one-stop shop solution,” Ferrand said. “We have about 30% of our business coming from e-commerce. We’ve addressed life science. We’re going to address many other verticals.” 

Brex didn’t say when it plans to roll out the new offerings. Despite the growth of its product suite, the company said it doesn’t consider itself a challenger bank. The startup, which was founded in 2017, has raised $315 million in equity and offers card products for entrepreneurs. The limited launch of a cash account called Brex Cash in October was the company’s first move beyond cards to deepen its relationship with clients.  

 See also: With podcasts and billboard ads, Brex focuses on brand building

Ferrand said the Brex Cash account will roll out to the general public at the end of March. In addition to deepening the company’s relationship with clients, the cash account also provides additional cash flow data to help with Brex’s underwriting model. Customers using the cash account get 1.6% APY, as well as points-based rewards on transportation, restaurant and software costs. 

Moving forward, Ferrand said Brex’s goal is to continue tailoring customers’ product offerings based on their business. For example, life sciences companies using Brex are eligible for points-based rewards for lab equipment purchases. For startups, Brex offers rewards for rideshare and software purchases. 

Brex announced Ferrand’s appointment this week. Prior to Brex, Ferrand spent more than five years at Google, including his most recent role as president of global customer operations for Google Cloud. Before Google, Ferrand served as president of Dell North America. 

Despite the crowded field of companies rebundling financial services, a fintech investor recently told Bank Innovation the market has room for many players.  

“[With] funds flowing into it, the impact that it’s starting to have, in terms of how the larger traditional institutions are responding, all of this is contributing to a buzz,” said Kelly Ford, general partner at Edison Partners. “Time will tell if the valuations and capital going into the space will truly pay off.” 

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

https://bankinnovation.net/allposts/biz-lines/payments/brex-to-launch-treasury-insurance-and-loan-products/

Temenos to help US clients launch digital banks in 90 days

https://bankinnovation.net/allposts/operations/comp-reg/temenos-to-help-us-clients-launch-digital-banks-in-90-days/
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The race to create a challenger bank just got more competitive with a ready-made solution from core provider Temenos that can help brands stand up a digital bank in as few as 90 days.

The Switzerland-based banking technology provider launched its digital banking software-as-a-service solution in the U.S. this week. The toolkit will allow clients to launch digital-only banks in 90 days, allowing them to aggressively meet consumer demand and stay competitive in the marketplace, Ranganathan Sathianarayanan, chief product officer for North America at Temenos, told Bank Innovation.

“We’re delivering this as a SaaS [software as a service] solution on the cloud, with the ability to scale up and down, and add new products with a faster time to market,” he said. “It includes Infinity, which is a front-office solution; Transact, which is core banking, such as deposits; and Temenos Payments.”

The entire solution includes anti-money laundering and fraud mitigation, along with analytics, noted Sathianarayanan. The product suite has already been deployed outside North America; one prominent client is Australia’s business neobank, Judo, which recently reported AU$1 billion (around $684 million) in deposits after just nine months of operations.

Temenos’ solution comes to market alongside a growing number of upstart core providers seeking to help institutions build digital-only banking solutions, including Nymbus, Mambu and Neocova. Temenos is not the only legacy provider helping clients set up digital-only banks quickly, as other large banking software vendors build solutions to cater to an expanding market. Just last year, industry giant FIS launched a toolkit to help clients stand up digital-only banks in 90 days.

See also: FIS to help stand up digital-only banks within 90 days

“There’s a great demand in the marketplace to have a core banking platform that’s nimble and built around API technologies,” said David Albertazzi, research director at Aite Group. He added that banks are seeking API-based models that offer easy integration, deployment agility and cost reductions resulting from cloud-based infrastructures. The deployment time of 90 days is also attractive to institutions accustomed to waiting months, or even years, for core software implementation efforts, he added.

While new core providers offer cloud and API-based solutions with attractive price points, many institutions still look to large, established players like Temenos for their experience and reputations, Albertazzi noted.

“[Institutions] want to leverage the scale of core providers, their implementation experience and financial stability,” he said. “Oftentimes, emerging fintech vendors do not offer all of those.”

Temenos’ solution lets banks configure and launch new products quickly according to their needs and plans, according to the company. It includes support for conversational interfaces, AI-based tools, augmented reality and wearables. Also included is support for regulatory compliance, and the company’s international footprint means its systems are resourced to meet data compliance regulatory requirements, like the GDPR and CCPA.

A key differentiator for Temenos’ SaaS solution, according to Sathianarayanan, is how its bundle of offerings is packaged in a comprehensive product suite that can be brought to market quickly.

“What we’re doing with the SaaS offering is we’ve preconfigured and prepackaged all of this together, so you don’t need to start from scratch,” he said. “This package includes not only our own products, but also integrations with marketplace partners. We’re bringing the entire end to end functionality to the market with faster implementation.”

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

https://bankinnovation.net/allposts/operations/comp-reg/temenos-to-help-us-clients-launch-digital-banks-in-90-days/

Toyota Financial’s New Zealand arm inks fintech partnership

https://bankinnovation.net/allposts/biz-lines/lending/toyota-financials-new-zealand-arm-inks-fintech-partnership/
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Toyota Finance New Zealand (TFNZ) has partnered with Ephesoft, an AI-powered data capturing platform, to help streamline and automate its loan-application processes, Ephesoft’s Founder and Chief Executive Ike Kavas told Auto Finance News. Ephesoft’s platform essentially “reads” PDF documents, pulls out necessary information and verifies it against existing databases, Kavas said. “When a company is …Read More

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https://bankinnovation.net/allposts/biz-lines/lending/toyota-financials-new-zealand-arm-inks-fintech-partnership/

Digit expands bill-pay automation

https://bankinnovation.net/allposts/biz-lines/payments/digit-expands-bill-pay-automation/
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Personal finance app Digit is growing its bill payment automation capabilities with a new feature that pays users’ phone bills. The platform already allows for scheduled payments for credit cards and student loans.

“Bills are an incredible pain point and stressor; we saw as this is a key [problem] that Digit is hoping to solve,” said Eric Brownrout, a product manager at Digit.

Digit hopes this offering will help its customers manage their money better. The bill-payment feature, along with other payment automation capabilities, are included in the $5 monthly subscription fee. Digit joins a group of startups and banks seeking to automate the payment experience, including Wealthfront, Qapital and banks like Ally and RBC.

Digit uses BBVA USAs Open Platform, a banking-as- service platform, through which the bank’s APIs are allowing Digit to pull funds from customers’ bank accounts. Customers then can deposit those funds in a pooled savings account managed by BBVA to pay bills or return funds to third-party bank accounts, as desired. Digit used Open Platform to help create its phone bill payment tool. The bank and app set up payment rails, allowing customers to make payments to their phone providers.

See also: ‘If we can’t automate it, we don’t build it’: Wealthfront’s Andy Rachleff on ‘self-driving money’

Founded in 2015, Digit was one of the first financial apps to allow users to save money through an algorithm. As other startups and banks launch similar services, the pressure is on for Digit to stay relevant to its user base. For Digit, this means fine-tuning its automation capabilities with different tools, including phone bill payments.

Digit founder Ethan Bloch recently told Bank Innovation that Digit’s vision is based on a future when each dollar of an individual’s paycheck is immediately allocated to a predetermined purpose, a message markedly similar to other platform startups, including Wealthfront, Betterment and Qapital.

“As we continue to look out and think about our roadmap and what we’re trying to do, the end state is really a place where, when money enters [customers’ lives], every dollar goes where it should go, when it should go there,” Bloch said.

The phone bill payment feature was tested in beta for several months before its launch. During that phase of development, Digit noticed that users said they sometimes forgot to pay their phone bills and often worried about having enough money at the end of the month for them.

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.

https://bankinnovation.net/allposts/biz-lines/payments/digit-expands-bill-pay-automation/

Paga Acquires Apposit, Announces Geographic Expansion

https://finovate.com/paga-acquires-apposit-announces-geographic-expansion/
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Mobile money operator Paga is poised for growth. The Nigeria-based fintech acquired U.S. software company Apposit and announced plans to expand its services geographically.

Apposit was founded in 2007 and builds software to power African tech businesses. The region is, as the company states on its website, a place where “formidable challenges and exceptional opportunities abound.”

Paga will leverage Apposit to expand into Ethiopia, a country that deals with similar cash and payment issues to Nigeria. To help fuel the expansion, the company will tap the experience of Apposit Co-founder and CEO Adam Abate, who will serve as CEO of Paga Ethiopia.

Through the acquisition, Paga Founder and CEO Tayo Oviosu said, “we not only gain a scalable world-class internal engineering team, but we also are in a stronger position to grow our global payments business.”

Paga and Apposit first partnered in 2009. After bringing on Apposit’s 62 employees, Paga’s staff now totals 530+ people. Additionally, the company adds Addis Ababa, London, and Mexico City to its list of office locations.

“Last year we refined our mission and vision to birth our massive transformative purpose: To make it simple for one billion people to access and use money,” added Oviosu. “Apposit has demonstrated strong alignment with our purpose and they have some of the very best engineers I have been privileged to work with, in over two decades in technology in Silicon Valley and elsewhere.”

Terms of today’s deal were not disclosed.

https://finovate.com/paga-acquires-apposit-announces-geographic-expansion/

AvidXchange Secures $260 Million in New Capital, Earns $2 Billion Valuation

https://finovate.com/avidxchange-secures-260-million-in-new-capital-earns-2-billion-valuation/
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Does fintech have its first “double unicorn” of 2020?

Leading accounts payable and payments automation solution provider AvidXchange has secured $260 million in equity funding in a round involving TPG Sixth Street Partners as well as other investors. The funding will power the company’s continued growth and takes AvidXchange’s total capital to more than $800 million. The investment also likely boosts the company’s valuation to more than $2 billion.

“We’re shaping the future of the B2B payments industry by fundamentally changing the way businesses pay their bills,” AvidXchange CEO and co-founder Michael Praeger said. “(We) provide a single platform for AP and payments with the largest payments network for the middle market.”

Praeger noted that even in 2019 more than 60% of businesses in the U.S. relied on paper checks to pay bills, generating $2.7 trillion in annual administrative costs. AvidXchange enables mid-market businesses to avoid this expense by automating invoice and payment processing in a single platform. the company processes 9.5 million payments a year via its network of more than 500,000 suppliers.

The funding announcement comes as the company reports that new acquisition BankTEL has secured its first partnership leveraging AvidXchange’s AvidPay solution. BankTEL will collaborate with Studio Bank, a Nashville, Tennessee-based boutique bank, which will use the platform to automate and streamline their AP to payment process.

AvidXchange was named to the Inc. 5000 list in November and earned a spot on the Forbes Cloud 100 list in October. Last year, the company also added 175 new workers, taking its total workforce to 1,400+ across seven offices. Headquartered in Charlotte, North Carolina, AvidXchange was founded in 2000.

https://finovate.com/avidxchange-secures-260-million-in-new-capital-earns-2-billion-valuation/

FinovateEurope Alums Reel in $940 Million in 2019

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With FinovateEurope less than a month away, we thought we’d take a look at some of the fundraising success the conference’s alums had in 2019.

From companies that demoed at our very first FinovateEurope in 2012 to some of FinovateEurope’s newest players, alums of our European conference raised more than $940 million in funding last year. We’ve listed the companies below in alphabetic order, along with a link to their demo so you can learn more about the company and its work.

Looking to showcase your latest fintech innovation on stage? Send us an email at heather@finovate.com to find out how to become one of our demoing companies next month at FinovateEurope in Berlin, Germany, on February 11 through 13.

And if you haven’t picked up your ticket yet, run, don’t walk, to our registration page and save your spot today! Take advantage of big savings by signing up before January 31.


24sessions: $1.1 million – postFEU19 demo

Aire: $11 million – postFEU15 demo

Bitbond: $2.3 million – postFEU15 demo

Capitalise: $4.5 million – postFEU16 demo

Currencycloud: $12.2 million – postFEU14 demo

Dashlane: $110 million – postFEU13 demo

DataSine: $5 million – postFEU18 demo

Featurespace: $32.2 million – postFEU16 demo

Fintech OS: $1.2 million – postFEU18 demo

Flybits: $35 million – postFEU19 demo

Kantox: $5.7 million – postFEU13 demo

Minna Technologies: $6.3 million – postFEU19 demo

nCino: $80 million – postFEU17 demo

Nutmeg: $58 million – postFEU12 demo

Onfido: $50 million – postFEU18 demo

Passport: $65 million – postFEU16 demo

PaySend: $10.6 million – post – and $5.3 million –postEU16 demoP

Scalable Capital: $28 million – postFEU16 demo

Tink: $11.2 million – post – and $63 million – postFEU19 demoT

Token: $16.5 million – postFEU17 demo

TransferWise: $292 million – postFEU13 demo

Twisto: $15 million – post – and $15.7 million – postFEU18 demoT

YellowDog: $3.3 million – postFEU19 demo

https://finovate.com/finovateeurope-alums-reel-in-940-million-in-2019/

Western Union, Bharti Airtel partner on real-time bank transfers to India, African mobile wallets

https://www.mobilepaymentstoday.com/news/western-union-bharti-airtel-partner-on-real-time-bank-transfers-to-india-african-mobile-wallets/
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Western Union has teamed up with Bharti Airtel Ltd. to allow customers to send real-time payments directly to bank accounts in India as well as real-time fund transfers to mobile wallets in 14 African countries. 

Users may transfer funds via Western Union to millions of accounts at Airtel Payments Bank, the banking subsidiary of Bharti Airtel, or direct funds through Airtel Africa, which has 15 million mobile wallet customers across the continent. 

“The future of money transfer is about customer choice — allowing them to move money whenever, however and wherever they want,” Hikmet Ersek, president of Western Union, told the World Economic Forum in Davos, Switzerland, according to a company release. “Our platform cuts through the complexities of cross-border money movement and payments so millions of customers can access their funds in real time in a manner that suits their local infrastructure and preferences.”


Topics: Mobile Banking, Money Transfer / P2P, Region: APAC, Region: EMEA

Companies: Western Union


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ACH payments increase during Q4, led by surge in same-day transactions

https://www.mobilepaymentstoday.com/news/ach-payments-increase-during-q4-led-by-surge-in-same-day-transactions/
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ACH payments increase during Q4, led by surge in same-day transactions

The ACH Network, a nonprofit that facilitates check-by-phone transactions, reported that volume grew 8.1% during the fourth quarter to 6.4 billion payments, fueled by a rapid increase in same-day payments.

Payment volume rose 10.6% to $14.7 trillion, compared with year-ago figures. 

“With this impressive performance in the fourth quarter, it’s evident that the modern ACH Network is thriving,” Jane Larimer, president and CEO of ACH, said in a  press release.

Same-day ACH rose 39% to 71.3 million payments, marking the first quarter that such payments exceeded 1 million per day.

Business-to-business payments rose 12.6% to 1 billion. Meanwhile, direct deposit payments rose 7.6% in the quarter to 1.8 billion. 

Cover image: ACH
 


Topics: Bill Payment, Mobile Banking, Mobile Payments, Trends / Statistics


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https://www.mobilepaymentstoday.com/news/ach-payments-increase-during-q4-led-by-surge-in-same-day-transactions/

New platforms for trade finance to be launched with blockchain backbones

https://thefintechtimes.com/new-platforms-for-trade-finance-blockchain/
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By Pratik Kirve

The launch of new trade finance platforms is gaining momentum across the world. Market players have been offering blockchain-based platforms for trade finance for gaining various benefits including transparency, traceability, and efficiency.

The entire documentation related to shipments, factoring, and receivables can be analyzed without any threat posed related to data tampering and the threat of compromising passwords. A great deal of trust can be built as the information on the network can be distributed without being copied. Moreover, blockchain offers simplicity in tracking information regarding contracts for multiple businesses with various stakeholders. As the decentralized model is employed in the blockchain, it improves the efficiency of the entire trade cycle. In addition, monitoring time is reduced, bills are generated automatically, and settlements can be carried out with the intervention of any agent. 

Firms have been taking advantage of blockchain for launching their trade finance solutions. CryptoBLK, a Hong Kong-based blockchain firm launched a trial of its trade finance solution known as ATLAS Alpha Network by partnering with Microsoft. With the launch of this platform, nearly 25 organisations have signed up for the four-week trial for hands-on experience. These organizations include banks, enterprises, and financiers. The company aims to digitize the end-to-end process of factoring, invoice financing, purchase order financing, and others. In the trial, participants are expected to gain training, highlight business cases, and test the platform with real-world problems. Financiers and banks are the primary target audience and they are expected to bring SME clients with them. 

The firm developed the platform with an aim to offer a single platform for suppliers, buyers, financiers, and stakeholders to serve their trade finance needs. With a portal providing an at-a-glance overview of open loans and connections across all trade parties, this platform would reduce the cost and risk for financiers. An ease in access to credit is provided through this platform. Duncan Wong, CEO of CryptoBLK, outlined that the new solution offers enhanced trust and transparency in the process and opens up new opportunities in the trade finance industry. According to the report published by Allied Market Research, the global trade finance market is expected to reach $56.06 billion by 2026.

Flowing with the current, CaixaBank launched its blockchain trade finance solution known as we.trade. This digital platform had been launched by nine founding banks. CaixaBank becomes a new shareholder with Erste Bank and UBS, which makes a total of 12 shareholders. This platform is developed on the IBM Blockchain Platform with the help of Hyperledger Fabric. It provides a user interface for monitoring operations. The target audience for the platform is SMEs and micro-businesses that offer open-account trade finance for improving the cash flow. Moreover, it would offer KYC of clients, bank payment undertaking, real-time settlement for traders, and tracking and tracing of goods. The blockchain platform would offer traceability and security for transactions. The delivery of goods has been linked to payment systems through smart contracts. One of the striking features is the real-time monitoring of trade transactions for enabling enterprises to manage the cashflow in a better manner. Patrick Klijnjan, Managing Director at steni Benelux, highlighted that we.trade offers a degree of certainty related to payments following the delivery and eliminates the worries for the future.         

Along with launching new platforms, market players have been adding new solutions to existing platforms. LiquidX, an online marketplace, launched its supply chain finance solution to its platform. This platform is expected to structure the supply chain finance programs, manage funding, and monitor supply onboarding. It is available on the cloud-based web portal of LiquidX. The technology is supported by a legal agreement, which enables users of the network to carry out transactions with multiple players. Clients of LiquidX can scale up their supply chain programs, which was difficult due to intricacies related to SCF. Andrew Chu, head of product at LiquidX, stated that its new offerings provide a different range of options for integration. Its interface offers personalisation option along with an easy-to-use onboarding portal. He further added that this platform is a progression for fulfilling capital needs for the clients. The details would be fine-tuned through collaboration with corporate and bank clients. The initial program of the platform included the U suppliers from the U.S., Canada, and Mexico. It will expand to the European and Asian countries. Chu highlighted that the countries will be decided according to the customer requirements and they will have extensive coverage for both regions in the coming years.

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https://thefintechtimes.com/new-platforms-for-trade-finance-blockchain/

Pulse names EVP of product management

https://www.mobilepaymentstoday.com/news/pulse-names-evp-of-product-management/
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Pulse names EVP of product management

Pulse, a debit/ATM network owned by Discover Financial, has named Jennifer Schroeder as iexecutive vice president, product management. 

Schroeder, the former executive vice president of operations, will focus on growing Discover Debit and focus on growing Pulse’s capabilities.

“Through Jennifer’s more than six years at Pulse, and 20 years at Discover, she has succeeded in creating best-in-class client service organizations,” Dave Schneider, president of Pulse. “We look forward to her ongoing contributions to PULSE’s success as she leads our product strategy.”

Schroeder succeeds Judith McGuire, who took on a new executive role at Discover. 

Pulse also promoted Jim Lerdal to executive vice president, operations, succeeding Schroeder. Lerdal had been vice president, fraud operations and compliance. In that role he led the enhancement of the company’s DebitProtect fraud-detection service and helped implement an anomaly detection program. 


Topics: ATMs, Card Brands, Mobile Banking

Companies: Discover Financial Services


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https://www.mobilepaymentstoday.com/news/pulse-names-evp-of-product-management/

Grubbrr teams with FreedomPay to create improved payment experience

https://www.mobilepaymentstoday.com/news/grubbrr-teams-with-freedompay-to-create-improved-payment-experience/
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Grubbrr, a technology company delivering ordering and fulfillment solutions through its self-ordering kiosk, has integrated with payment innovator FreedomPay, a TransAtlantic consumer-centric commerce platform, according to a press release. Through this partnership, Grubbrr will offer its customers an even more secure, fast and convenient payment experience, while simultaneously bringing digital engagement to the point of purchase for a complete business automation platform application.
 
The two technologies will streamline operations while ensuring PCI compliance and payment acceptance. With FreedomPay’s PCI-validated P2PE commerce platform, Grubbrr’s customers will have access to the latest in payment technologies, such as Apple Pay, Google Pay, Samsung Pay and contactless EMV.
 
“Payments technology has greatly advanced and adapted over time, and so has Grubbrr,” Bhavin Asher, founder of Grubbrr, said in the press release. “Today, we’re bringing automation to businesses through a fully integrated platform, and this partnership with FreedomPay will help us bring an elevated solution that is sure to delight customers with an engaging and informative interface.”
 
Fully-integrated, USB connected payments from FreedomPay allow for hot swappable payment devices and offline support for the entire Grubbrr ecosystem. The company’s suite of solutions includes self-service kiosks, point-of-sale systems, mobile, online and tableside ordering with food lockers and other services.
 


Topics: Contactless / NFC, EMV, POS, Security

Companies: FreedomPay, Samsung, Grubbrr Systems International, LLC, Google, Apple


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https://www.mobilepaymentstoday.com/news/grubbrr-teams-with-freedompay-to-create-improved-payment-experience/