Plinqit Brings Rewards-Powered Financial Literacy to First Community Bank

One day in the distant future, children will be educated in basic financial literacy as readily as they are taught algebra. Until then, solutions like Plinqit from HT Mobile Apps, that reward users for learning how to be better savers and consumers, will be valuable tools for credit unions and community banks looking for novel ways to engage and educate their members and customers.

“There is a true need for improved financial literacy with 41 percent of Americans reporting that their lack of understanding of finances is holding them back from making financial progress,” HT Mobile Apps CEO and founder Kathleen Craig said. “And Plinqit has a proven track record – more than 60 percent of users that reach their savings goal continue to save by setting new goals.”

This helps explain why First Community Bank has decided to partner with HT Mobile Apps. The Arkansas-based bank, with $1.5 billion in assets and 26 branches in Arkansas and Missouri, will offer the Plinqit savings app and financial literacy solution to its customers.

“We are proud to do everything in our power to strengthen our local economy, and one of the best ways we can deliver on our promise is by helping people learn about finances so they can begin saving,” First Community Bank CEO and chairman Dale Cole said. “Plinqit is a unique tool that satisfies our customers’ digital needs and encourages smart financial decisions.”

Plinqit’s Build Skills feature enables users to earn money by watching contextual videos or successfully completing lessons and quizzes on key personal finance concepts. For example, a bank customer opening their banking app to make a credit card payment may see a Build Skills notification that notes their heavy credit card spending. The app may then suggest exploring credit management or debt consolidation options by way of an educational video. The different videos and quizzes have a value – 50 cents, for example, or $1 – which, once the video or quiz is completed, is deposited into the user’s Plinqit account.

To get started, users link their Plinqit account to their bank or credit union checking account, and then set up as many as five savings goals in the Plinqit app. Plinqit helps users determine how much to set aside on a regular basis in order to meet the different savings goals on schedule. Users earn money by reaching savings goals, referring others to the platform, and, as noted above, by engaging the video and other personal finance content. The app is free to use; all that is required is ownership of a U.S. checking account.

HT Mobile Apps demonstrated Plinqit at FinovateFall last year. The Michigan-based company provides banks and credit unions with a variety of customer engagement and retention solutions including Banker Jr., Member Jr., and 2019 acquisition, Hip Pocket. The partnership news with First Community Banks comes in the wake of a year that saw the company’s app record higher user engagement of 55 percent on average compared to the average finance app engagement rate of 36.3 percent. The company also announced that it inked partnerships with more than a dozen banks and credit unions in 2019. HT Mobile Apps’ platform now serves clients in 20+ states with assets ranging from $26 million to more than $40 billion.

FinovateEurope Sneak Peek: Tensorflight

A look at the companies demoing live at FinovateEurope on February 11-13, 2020 in Berlin. Register today and save your spot.

Tensorflight automates the process of property inspections using AI on existing satellite and street view imagery to give insurance industries the same data in a fraction of cost and time.


Our software provides instant property data on construction type, number of stories, total floor area, roof pitch and geometry, solar panels and more with global coverage!

Why It’s Great
Tensorflight offers a unique solution with instant risk-related information about a building with global coverage, analyzed by our AI algorithms.


Jakub Dryjas, Head of Growth
Dryjas has been running growth at Tensorflight for over two years. He is an experienced Business Developer and Consultant with a solid legal background and international experience.

FinovateEurope Sneak Peek: CASHOFF

A look at the companies demoing live at FinovateEurope on February 11-13, 2020 in Berlin. Register today and save your spot.

CASHOFF’s Cashback 2.0 solution is based upon your customers spending behaviours and their favourite brands and targeted to each individual customer. Giving customers up to 50% Cashback each purchase.


  • Repays banking loans or makes charity donations
  • Funding by Brands, means lower bank loyalty costs
  • Increasing banking loyalty, engagement and cross selling opportunities

Why It’s Great
Cashback 2.0 uses AI and Machine Learning to tailor offers to each individual customer. Customers are allowed up to 50% cashback for each purchase. Increasing customer engagement is highly targeted.


Darren Hughes, CEO
Hughes is passionate about developing new products and solutions for the financial services industry with more than 20 years experience in financial services business leadership.

Billy Leung, Director
Leung started his first business at the age of 8 and explored 40+ countries across 6 continents. He was a speaker at Finovate, Slush and a number of Fintech conferences in the US, Europe and Asia.

FinovateEurope Sneak Peek: Trulioo

A look at the companies demoing live at FinovateEurope on February 11-13, 2020 in Berlin. Register today and save your spot.

Trulioo helps organizations instantly verify 5 billion people and 330 million businesses online through a single API. Hundreds of businesses around the world use Trulioo to digitally verify customers.


  • Gives regulated entities certainty about their business customers
  • And gives them confidence in meeting Customer Due Diligence (CDD) requirements

Why It’s Great
Through GlobalGateway Business Verification, companies can instantly verify business entity information, perform watchlist checks, and identify and verify the beneficial owners of the businesses.


Baraa Safaa, Project Manager
Safaa leads development for GlobalGateway Business Verification, identifying business pain points and translating them into product features that help regulated entities with AML compliance.

FinovateEurope Sneak Peek: W.UP

A look at the companies demoing live at FinovateEurope on February 11-13, 2020 in Berlin. Register today and save your spot.

W.UP is an AI-powered banking personalisation platform that allows banks to understand and cater to customer needs in real time.


  • New concept of financial well-being
  • Contextual offers to help achieve sustainable spending
  • Customer-bank relationship evolving and engagement boosted through personalisation

Why It’s Great
We help banks unleash the power of real-time data to understand and serve their customers better.


Tamas Braun, Sales Director
Braun has worked in the retail banking technology industry for the past 15 years. Most recently, he worked at technology vendors such as IND and Misys before joining W.UP.

József Nyíri, VP of Bus. Dev.
Nyíri is a hands-on innovator and growth leader with more than two decades of fintech experience. He is a visionary and speaker on digital transformation of the banking industry.

ITSCREDIT’s João Pinto on the Digital Lending Opportunity


We recently spoke with ITSCREDIT CEO João Pinto. Founded in 2018, ITSCREDIT is a spinoff from ITSECTOR and is a fairly new player in the digital lending space. The Portugal-based company focuses on placing the consumer in control of the lending experience by making the entire process digital.

In this interview, Pinto talks to us about the digital lending opportunity, how his company fits into the current state of this fintech subsector, and what we can expect to see next.

Finovate: There is a wide range of borrowers out there– some who may not be comfortable on digital channels and others who are digital natives. How does ITSCREDIT adapt to this variety?

João Pinto: The main focus of ITSCREDIT is to evolve the lending process so that different types of customers can perform all lending origination actions using online channels. Our aim is that the customers can perform all origination operations online with minimum data input. We do this by retrieving necessary application information from various systems (personal data, financial data, and so on). Our approach to digital lending is to provide processes that are intuitive, attractive, simple, and fast in an online environment to revamp many of the bureaucracies often associated with traveling to the banks’ physical branches.

The customer can access the ITSCREDIT platform via online channels, such as mobile and internet. ITSCREDIT provides interfaces for other channels, as well, such as branch, contact center, and backoffice, which all have access to the client and their application process. This means that the client can start an application in any channel and get information or advice and can continue the process in any other channel. This way, more traditional users that are not as comfortable using digital channels can use traditional channels either in an isolated way, or– more interestingly– in a combined way. The multi-channel approach offers them full control of their application.

Finovate: How does ITSCREDIT underwrite credit risk and how does that approach differ from incumbent players?

Pinto: The ITSCREDIT platform contains four main modules: Flowcredit (Loan Origination), Calculators, Risk Analysis, Scoring, and Collections. Each can operate in isolation or can be combined in any way. Also, the platform is open so that implementations can use as much data as is available in order to have a more complete view of customers and their financials. We believe this is a huge strength of the platform. It allows banks to garner richer information for the risk analysis from both individuals and corporations (through Risk Analysis and Scoring modules), and also makes data available from credit applications processes (through Flowcredit).

In many situations our clients have, in the past, invested heavily in building their credit application analysis. The Flowcredit module easily integrates with such systems and then adds additional information and rules to make underwriting even more accurate and tailored to suit the financial institution needs.

Finovate: Tell us about the role that open banking plays in ITSCREDIT.

Pinto: As we mentioned previously, one of our strengths is that the ITSCREDIT platform is open so that implementations can use as much data as is available in order to have a more complete view of customers and their financials. In this scenario, open banking is a key element. It not only makes much more data available from different players, but also makes integrations much easier.

On the other hand, our platform is based on a services architecture, so that it exposes services that can be consumed by third party entities. For example, the use of calculators and loan origination components can easily be used in different commerce sites and therefore originate completely new lines of business for the institutions. For example, a travel agent can have a payment method on their website for their clients based on a personal loan.

Finovate: Looking broadly at the credit and lending industry as a whole, what changes do you anticipate 2020 will bring?

Pinto: In the past years we have seen financial institutions start to approach digital lending for their clients. This journey is still in its early stages, with few institutions providing such functionalities for a few products. We are sure, though, that in 2020 we’ll see more institutions adopting full digital lending with simpler models more adequate to their clients needs. The launch of PSD2 in Europe and other Open Banking initiatives around the world make it much easier to obtain personal and financial data from credit applicants and therefore make the loan origination simpler and faster.

The other area that we foresee a great expansion is through a space we refer to as dPOS (digital Point-of-Sale). A dPOS enables merchants to provide payment methods for their ecommerce platforms with digital lending, providing lower rates on credit cards for end customers and a lower cost and even extra income for merchants.

Finovate: What’s next on the horizon for ITSCREDIT?

Pinto: ITSCREDIT is a spin-off that will be 2 years old in May. We already have 13 clients on three continents: North America, Europe, and Africa. Our journey on the commercial side is to present the advantages of our solutions to more institutions and get more implementations.

In terms of product evolutions, we are enhancing the digital lending capabilities and models and launching new versions in 2020 for brokers and merchants.

Overall, our big aim is to position ourselves as a world-class player for credit solutions, providing innovative and modern solutions for our customers to help them differentiate from their competitors and become more efficient with higher loan volumes.

You can watch ITSCREDIT demo its latest technology on stage at FinovateEurope next month. Register now to save your seat!

If you’re interested in demoing on the FinovateEurope stage this year, reach out to or take a look at our event page for more details.

PayPal processed $10.3B in donations in 2019

 PayPal Holdings Inc. said it has processed a record $10.3 billion in donations globally during 2019, with 21% of the funds coming through mobile devices.

“Our efforts to drive social impact and create value for all our stakeholders continues to expand,” Franz Paasche, senior vice president, corporate affairs at PayPal, said in a company release. “As we enter 2020, we remain committed to harnessing the power of our technology and scale to provide new ways for people to give to the causes they care about – and to help charitable organizations raise mission critical funds that make a difference in communities around the world.”

Earlier this week, New York State Attorney General Letitia James announced a settlement with PayPal Charitable Giving Fund Inc., to ensure that donors received adequate information about funds raised online through the service. 

“Every individual who chooses to donate funds deserves transparency and honesty throughout the process,” James said in a release from her office.

Topics: Mobile Apps, Mobile Payments, Regulatory Issues

Companies: PayPal

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Fintech News Issue #251

FinTech Weekly is © 2020 and published by the
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Red Sox affiliate looks to boost concessions with autonomous checkout

Self-checkout shopping has made great strides since Amazon Go cashierless convenience stores launched in late 2016, and technology provider, Standard Cognition, has made its own headway expanding self-checkout convenience to sports stadiums in addition to other retail environments.

Michael Suswal, co-founder and chief operating officer at Standard Cognition, took the stage this week at the CES Hi-Tech Retailing Summit Las Vegas along with one of his clients, Matt Levin, the senior vice president and chief financial and technology officer of Pawtucket Red Sox —  the Triple A team of the Boston Red Sox. They discussed their partnership that is bringing frictionless concessions to sports facilities worldwide.

First pro team to offer autonomous checkout

The Pawtucket Red Sox is the first professional sports team to have an autonomous checkout store, which will be in Polar Park, a ballpark the team is building in Worcester, Massachusetts,  scheduled to open in April 2021.

“We’re really trying to enhance the experience by introducing the technology,” Levin said in describing the cashierless transactions at the concessions area, which will be called Left Field Market. “We as the retailer are bringing the magic to the consumer experience.” 

Larry Lucchino, a Boston Red Sox Hall of Famer and the chairman and principal owner of the Pawtucket Red Sox, decided to partner with Suswal, whose company uses artificial intelligence and computer vision technology, since he wanted to extend the benefits of cashierless concessions to other sports facilities, Levin said.

Suswal said reducing the wait in a concessions line would not only make the fan experience better, but would save lost sales from fans who chose not to wait in line for their purchase. Standard Cognition, which operates one store in San Francisco but focuses on marketing its technology to other retailers, leverages artificial intelligence and cameras to enable consumers to shop and pay without scanning or stopping to check out.

“The vision is beyond this store,” Suswal said, noting that his partnership with Pawtucket Red Sox, called LL Ventures, has already gained attention from numerous other sports facilities asking about the technology.

Unlike other autonomous checkout platforms, Standard Cognition’s does not use shelf sensors and requires cameras only on the store ceiling; it accepts cash or credit; and it can accommodate any existing store layout, eliminating the need to reconfigure an existing store.

No job killer

Despite what many may assume, cashierless transactions does not mean the ballpark will need fewer employees. Instead of serving as cashiers, Levin said the employees will become concessions ambassadors.

Suswal took it a step further, saying people, in general, would benefit, comparing the cashierless checkout technology to modern ride share transportation, which he claims has improved the human relationship between passengers and drivers compared to traditional taxis that have walls between the parties.

Future benefits coming

Lastly, the partnership also provides an opportunity for Standard Cognition to better understand the impact of autonomous checkout on shopper behavior. Suswall, for example, has a partnership with Mars Wrigley, a manufacturer of candy, gum, mints and confections, that could eventually lead to providing retailers with recommendations on how to design stores that balance operational efficiency with customer satisfaction and financial optimization, according to The Shelby Report.

Suswal said he was attracted to the Polar Park project because of the specific vision the Pawtucket Red Sox articulated for the facility, which is a fan-focused experience. He said other retailers have also contacted him with specific user experiences in mind.

Levin encouraged attendees to always  “live through the customer journey” when designing a retail space.

Just Eat rolls out exclusive mobile food delivery with Greggs Bakery in UK

Just Eat rolls out exclusive mobile food delivery with Greggs Bakery in UK

Greggs, the largest bakery chain in the U.K., is launching an exclusive partnership with app-based delivery service Just Eat, following a successful trial in Newcastle, London and Glasgow. 

The service will immediately expand into Bristol and Birmingham, England followed by Manchester, Leeds, Nottingham and Sheffield by the sprint. A full nationwide rollout will follow. 

“We know from the trials we have carried out that our customers love the idea that they can get Greggs delivered directly to their door and we’re delighted to now be working with Just Eat to provide that service to our customers across the U.K. by the end of the year,” Roger Whiteside, CEO of Greggs, said in a joint release. 

“We’re proud to be the only food delivery app that can bring you the likes of the Greggs Vegan Sausage Roll wherever you are,” Andrew Kenny, UK managing director at Just Eat, said in the release. 

Just Eat delivers to about 12 million customers in the U.K. from restaurants ranging from Kentucky Fried Chicken, Subway and Wagamama to local favorites like Toby Carvery and Caribbean favorite Turtle Bay.

The blockbuster merger between Just Eat and Dutch delivery giant is expected to close within weeks, according to a spokesperson, after a rival $6.3 billion hostile bid by Prospus was rejected earlier this month.

Cover image; Just Eat

Topics: Mobile Apps, Mobile Payments, Region: EMEA, Restaurants

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Digital Custody. Is custody of digital securities ‘different’?

James Baty

By James Baty, US Capital Global

Is custody of digital securities different?

A custodian is a financial institution that holds customers’ securities for safekeeping in order to minimize the risk of their theft or loss, and facilitate their reporting and transfer. A custodian may hold securities in physical or electronic form. The emergence of digital securities suggests some potential differences, complications or improvements, but in the end custody of private securities is pretty much the same, whether analog or digital.

We’re focusing here on digital ‘private’ securities

In this article the focus is the custody of digital ‘private’ securities, and how it might be different, or the same, from non-digital. This is contrasted with public securities, which are mostly similar, but have some different requirements and issues of scale. Also ‘digital securities’ are different from cryptocurrencies, although they have similar technical issues and risks. It is relevant that many emerging ‘digital custodians’ for cryptocurrencies constitute an early development area that will also define some of the new custodian practices for digital securities. Of course, in reality most all securities are ‘digital’, in that the record of their ownership is maintained in some computer system, but in this discussion ‘digital securities’ are securities tokenized in some cryptographically secure data base (e.g., blockchain).

Remember digital securities are ‘securities’

In April of 2019 the SEC issued it’s ‘Framework for “Investment Contract” Analysis of Digital Assets’ which basically affirms the position that a security is a security, and an STO (Security Token Offering) represents an investment contract under the Howey rules. So a ‘digital security’ is a security, fully subject to all of the normal regulatory implications. These SEC regulations come into play anytime a company is selling securities to U.S. residents, or the company’s shareholders are U.S. residents. While other regimes may have somewhat different regulations, the global trend has been towards digital securities equivalent to traditional securities.

Who can custodian private securities?

Obviously, the buyer themselves may hold their private security, or the security may be held for the buyer by the Issuer, or a regulated person under a power of attorney (POA). An investor may hold their securities themselves (i.e.’self custody’) by personally taking delivery of stock certificates. But this is not very convenient when it comes time to sell, and there is the potential risk of loss. So historically owners of public and private securities rely on some form of custodian – a bank, broker dealer, investment advisor operating under the custody rule, or a licensed commercial custodian.  The owner does not have to take physical delivery of the shares, and future transactions are not delayed by physical transfer. These custodians are subject to regulation and oversight. The custodian provides not only for safekeeping of assets, but supports trade processing and asset servicing, and importantly provides for regulatory compliance. While most investors use custodians primarily for convenience, other such as institutional investors are essentially required to use custodians. The four largest custody banks alone hold about $114 trillion in assets. 

Is Custody of Digital Securities different? Perhaps a bit ….

In March of 2109, the SEC issued a letter on the issues of and requesting comment on how digital assets are affected by the custody rule. The questions asked include:

What challenges do investment advisers face in complying with the Custody Rule with respect to digital assets? 

What considerations specific to the custody of digital assets should the staff evaluate when considering any amendments to the Custody Rule? For example, are there disclosures or records other than account statements that would similarly address the investor protection concerns underlying the Custody Rule’s requirement to deliver account statements?

To what extent can DLT (Digital Ledger Technology)be used more broadly for purposes of evidencing ownership of securities? 

Can DLT be useful for custody and recordkeeping purposes for other types of assets, and not just digital asset securities? 

What, if any, concerns are there about the use of DLT with respect to custody and recordkeeping?

In January of 2109 ESMA (the European Securities and Markets Authority issued its Advice on ‘Initial Coin Offerings and Crypto-Assets’. It stated…

First, ESMA believes that greater clarity around the types of services/activities that may qualify as custody/safekeeping services/activities under EU financial services rules in a DLT framework is needed. 

ESMA’s preliminary view is that having control of private keys on behalf of clients could be the equivalent to custody/safekeeping services, and the existing requirements should apply to the providers of those services. 

Meanwhile, there may be a need to consider some ‘technical’ changes to some requirements and/or to provide clarity on how to interpret them, as they may not be adapted to DLT technology. 

Clearly the regulators want to survey the knowledge and practices around the custody of digital assets, but in general, they describe digital assets as subject to the same custody requirements as traditional assets.

Two key issues Risk and Key Security

One position taken by many STOs is that the shareowner holds the keys to the wallet containing the digital share, and this constitutes the equivalent of self-custody. But while trading one share is not very risky, there already have been some serious security issues around very large volume cryptocurrency transactions. What happens if you lose your USB stick ‘cold wallet’ with your keys? What happens if someone hacks the wallet you stored online? What happens if bad guys know you have the keys to lots of high-value shares stored on your laptop and just put a gun to your head to make you give them the keys? Thus, to avoid this sort of risk, and add some convenience, early cryptocurrency owners would just store their wallets online at the various exchanges. 

That has left us with the legacy of many stories of loss of cryptocurrencies through fraud, hacking and error, including the infamous Mt. Gox exchange loss of 850,000 customer bitcoins valued at more than $450 million.

They subsequently closed under bankruptcy.  It has been widely reported that a total of 4 million Bitcoins have been stolen to date and 2 million have been lost, or about $14.5 billion. While digitization through cryptographically secure transactions theoretically provides some additional security to the description and identity records of securities ownership and transfer, it also raises serious new risks of recovering lost assets. 

A recent technical solution offered to improve key security is the proposal is to implement custodian services on ‘multi-signature’ tokens, where the custodian or transfer agent has an additional signature and the transaction scheme may require 1of2, 2of2, 2of3 signatures, etc. to transfer. Think of that lockbox at the bank – it takes two keys to open it, yours and the banks. And implementing multiple signatures on a digital security is sort of like that, or not. Depending on the implementation the multiple signature may allow either ‘key’ to unlock the security, or require both, or 2 of three keys… Multisignature wallet providers include Armory, Electrum, Coinbase, Bitgo and Coinb. At the extreme Coinb supports up to 15 keyholders per wallet. While superficially this seems like a solution to some of the problems of digital assets and offers additional features, it actually really complicates the situation – Essentially there is no legally distinguishable custodian of funds deposited into a shared wallet with multiple keyholders. And so, we see Coinbase (primarily a cryptocurrency exchange) which initially supporting multi-signature, has dropped support for multi-signature as it developed a separate regulated cold storage custody service (Coinbase Custody).

So is Digital Security Custody really different? Basically, no.

While there might be additional procedural issues to adopt in custody of digital private securities, there is no magic bullet that technically solves all problems, and digital private securities are subject to the same custody requirements of traditional securities. And in the realm of esoteric technical features, cold storage wallet providers (e.g.., Coinbase, Xapo, Vo1t) advertise that your offline crypto assets will be stored in a technical faraday cage that prevents any electronic signals from reaching your assets. But perhaps the real issue is to provide additional enhancements to traditional procedures. Koine offers a ‘Digital Airlock’ which uses hardware and network segmentation to secure client assets so that no staff has access to modify client standard settlement instructions or transfer assets.

In summary, a security is a security, and a digital security is subject to the same custody requirements as traditional securities. Their digital nature does not magically solve custody issues but instead creates some new challenges. The key issue is custodians providing operations and procedures that ensure the transactional security of digital assets. 

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Tencent leads $44.7M Series B funding into Paris-based fintech Lydia

Tencent leads $44.7M Series B funding into Paris-based fintech Lydia

Lydia, a Paris-based fintech super app, said it raised $44.7 million (40 million euros) in Series B funding, led by Chinese gaming and social media giant Tencent, to scale its mobile payments platform and expand across Europe. 

Lydia, which has 3 million customers in France, offers a range of financial services through its mobile app, including payments, insurance, savings, loans and gift cards. 

Cyril Chiche, co-founder and CEO at Lydia, said that 25% of 18-30-year-olds in France have an account with Lydia, and so far the company has managed to grow with very little outside investment. 

“With the new funding round and partner like Tencent, who will help us save a lot of time and avoid costly mistakes in this scaling up phase, we have all the reasons to be ambitious,” Chiche said in a company release. “We are now in a position to challenge the traditional retail banking distribution model with a mobile platform similar to what we see in sectors like retail, music or travel.”

Prior investors, including Open CNP by CNP Assurances, XAnge and New Alpha, participated in the new funding round. The company, launched in 2013, has raised more than $67 million (60 million euros) to date. 

Cover image: Lydia 

Topics: Mobile Banking, Mobile Payments, Region: EMEA, Venture Capital

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

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

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

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

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

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

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

Cover image: Getsafe

Topics: Mobile Payments, Region: EMEA

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

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

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

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

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

The Telegram offering

Restraining order

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

“The most hyped ICO”

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

The SEC complaint

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

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

Securities regulation exemption did not apply

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

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

SEC sanctions

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

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

The Nebulous offering

The unregistered ICO of convertible Sianotes

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

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

Settlement with the SEC

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

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

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

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

  2. Engagement with the SEC is prudent

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

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

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

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

What’s happening next?

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

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

2020 Predictions for US Financial Services

Sam Maule

by Sam Maule, Head of North America, 11FS

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

Prediction 1: more mergers are on the way

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

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

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

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

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

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

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

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

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

Prediction 3: challengers will still face challenges

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Backfilling or buyer’s remorse?

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

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

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

Maybe a good idea earlier in the finance value chain?

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

Problem hiding in plain sight

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

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

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

#innovatefromthecustomerbackwards  #newinsurancebalance

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How Upstart and Cross River Bank are automating credit card payments

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

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

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

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

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

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

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

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

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

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

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

Visa, Mastercard, AmEx win easier access to China market

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

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

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

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

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

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

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

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

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

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

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

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

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

Three Key Lessons We Learned from Plaid

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

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

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

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

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

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

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

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

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

The big trends

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

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

The little trends

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

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

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

The trends in between

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

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

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

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