Third-party apps grow users faster than banking apps

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

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French Fintech Lydia Locks in $45 Million

Photo by slon_dot_pics from Pexels

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

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

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

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

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

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

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

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

Raisin U.S. CEO Paul Knodel

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

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

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

Galileo offers wealth, spending accounts with IFA broker dealer

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

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

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

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


Topics: Mobile Apps, Mobile Banking

Companies: Galileo Processing

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KAL and Ceska launch first Windows 10 ATM on Linux Hypervisor

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

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

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

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

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

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

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


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

Companies: Microsoft, KAL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Daniel Smith, CEO of Choice Financial Solutions

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

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

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

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

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

Terms of the deal were not disclosed.

Cover image: Raisin


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Genmega Inc. introduces new features to universal kiosk

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

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

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

Image courtesy of Genmega Inc.

Topics: ATMs, Bitcoin, Cryptocurrency, Mobile Banking

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

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

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

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

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

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

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


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

Companies: Persistent Systems, Amazon

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

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

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

Key observations: 

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

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

Wayne Johnson

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

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

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

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

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

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Small Business Finance Tips For Managing Your Invoicing

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

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

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

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

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

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

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

What Type Of Invoice Should You Use?

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

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

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

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

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

Automatic Payment Reminders

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

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

Using A Numbering System

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

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

Sending Invoices On Time

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

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


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

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

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

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

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

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

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

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

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

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

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Signicat appoints new CEO and Chairman to accelerate international growth

Signicat is a pioneering pan-European digital identity company with an unrivaled track record in the world’s most advanced digital identity markets. Its Digital Identity Platform incorporates the most extensive suite of identity verification and authentication systems in the world, all accessible through a single integration point. Signicat is bringing in new expertise and capabilities to help accelerate its international expansion.

Johan Tjärnberg, a special advisor at Ingenico Group and previous CEO of Bambora, has been appointed as new Chairman and Asger Hattel, previous CEO and Head of Nets Merchant Services is being appointed as new CEO. Gunnar Nordseth, current CEO and co-founder of Signicat, will remain as a shareholder and transition into a senior business development role.

“Signicat is on a fast-growing journey to expand internationally and further strengthen its position in the Nordic and broader international markets. We founded this company with a grand vision and I am very proud of what we as a team have achieved up until today. We have now come to a phase where I want to hand over the leadership reins to a leader with greater experience in international expansion, and in scaling the business to the benefit of current and future customers. I will continue to be committed to Signicat as a shareholder and I am looking forward to working closely with Asger, focusing on innovation and business development”, says Gunnar Nordseth, CEO of Signicat.

“Born from the most advanced digital identity market in the world, Signicat is a recognised leader in one of the most exciting and fast-growing technology areas globally. A warm thanks to Gunnar and his experienced management team that has succeeded in achieving this strong market position. As the majority owner, Nordic Capital is enthusiastic about supporting Signicat’s continued growth and bringing a unique experience of international expansion by the appointment of Johan and Asger,” says Fredrik Näslund, Partner, Nordic Capital Advisors.

Asger Hattel has more than 20 years of experience from companies in financial services, technology and telecom. He previously held a position as Group Executive Vice President at Nets, where he, as CEO for the Merchant Services business with his team, built Nets into a Northern European leader. Earlier he worked as Executive Vice President and Head of TDC’s Nordic and Wholesale business. He started as new CEO of Signicat on January 8, 2020.

Johan Tjärnberg, the newly appointed Chairman of Signicat, has a proven track record in building strong global fintech businesses, previously holding positions as CEO of Bambora and EVP of the Ingenico Group’s Retail Business Unit. At year-end he took up a role as Special Advisor to the Ingenico Group and during 2020 he will join the Board of Ingenico.

These two appointments strengthen Signicat’s organisation and position the company to accelerate its international expansion as the leading digital identity solution in Europe with a unique ability to help clients solve their digital identity challenges.

Signicat was founded in Trondheim, Norway in 2007 and is a pioneer and technology-leader within verified digital identity solutions in Europe. The company offers compliant, secure and user-friendly online authentication, identification verification and electronic signature solutions that reduce risk while enhancing the user experience.

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Australia’s Open Banking Dream Drifts Away

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia

It would seem Australia’s hopes of having a quickly implemented open banking regime are fading fast, if not completely transparent already. An already delayed start date of February 2020 has been pushed out to July 2020, causing much consternation in the startup community, as fintechs continue to battle with unpredictability around the regime.

On top of this, fintech advocacy groups have highlighted the significant costs that fintechs will face to become accredited to use the system, making testing product-market fit near impossible, without significant upfront funding. As most founders will know, this is hugely problematic – most investors want some of the chicken and at least the egg before they’ll part with their dimes.

To add insult to injury for fintechs downunder, consumer groups are pushing for screen scraping technologies to be banned once open banking is in play, arguing that legacy fintechs must migrate to the higher standards of the open banking regime.

In principle, I’m sure many fintechs, even those on ‘legacy’ screen scraping technology, would migrate in a heartbeat – if it were commercially viable and simple to do so. But the fact of the matter is it isn’t. Firstly, it’s not even available, and secondly, what should be a simple and open set of standards, is mired in controversy and debate amongst stakeholders.

What seems to be lost in this debate is that for decades banks have sat on legacy data that has seen them pass on billions of dollars in unnecessary costs to consumers. If the nation is serious about actually challenging the stranglehold banks have on consumers, and the free-for-all of fee taking that currently exists, they would be bending over backwards to create an environment that allows fintechs to flourish.

Australia needs to invest in this infrastructure and invest fast. We need to stop talking about it and just do it. Internationally, it is somewhat embarrassing that we cannot even get this done. The UK is already years ahead of us. Developing nations, on our doorstep, are likewise leapfrogging us.

Stagnation and uncertainty are the enemy of progress, and fintech seems to be caught right in the thick of it. Investors and founders be warned.

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BMO’s Ben Schack on what’s next for bank-fintech collaborations

BMO Harris partners with fintech  startups through the BMO Harris Bank 1871 Innnovation Program.

The bank usually works with five to seven firms each year and announced its third cohort of startups last October. Some of the companies BMO Harris has worked with in the past include Blend, a software platform for lenders; SpringFour, which connects consumers to local financial health resources and Holberg Financial, a fintech firm that develops tools to help reduce financial stress.

In this episode of “Fintech Unfiltered,” Bank Innovation sat down with Ben Schack, head of U.S. digital partnerships at BMO Financial Group, to discuss the bank’s approach to cooperation.

Schack, who is based in Chicago, is responsible for sourcing bank-fintech partnerships. He said BMO is focused on working with startups that address pain points of its customers.

“[The partnership program] is an opportunity to find startups who might be able to complement our capabilities or help us reach a new pool of customers that we’re interested in,” he explained.

One trend Schack has noticed is the growth of socially-engaged firms that are working to address financial inclusion for underbanked communities. He argues that for banks, the biggest obstacle to reaching underserved communities is risk. “Large U.S. banks have been built on a foundation of solid risk management and that permeates everything from management to strategy. Having a different risk philosophy is really helpful when you’re trying to serve underserved communities.”

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.

Backbase-as-a-Service Helps Banks Leverage the Cloud to Innovate and Scale

Photo by Donald Tong from Pexels

Backbase announced today the availability of its new managed cloud platform, Backbase-as-a-Service. The solution makes the company’s broad portfolio of digital banking offerings available to FIs looking to accelerate their ability to develop and offer new technologies to customers.

In their statement, the company depicted banks as challenged by not one, but two types of technologically-driven competitors: digitally-native neobanks and big tech-first companies that are beginning to develop financial products (“TechFin”). The problem of legacy, non-digital infrastructure, according to Backbase, is a key hurdle for most banks when it comes to “keeping pace” with the new digital services these rivals are able to offer. Backbase-as-a-Service enables FIs to develop their digital solutions faster, and to bring them to market without having to overcome their outdated infrastructure – or bear the high cost of replacing it with another on-premise system.

Backbase CEO Jouk Pleiter called the cloud “an exceptional tool” to help financial institutions transition to becoming digital first. “We believe the move to cloud is an unstoppable one, and one which every financial institution needs to embrace,” he said. “Our clients want the freedom to innovate and maintain their competitive edge, so launching Backbase-as-a-Service is the logical step or us.”

The technology will enable banks to take advantage of innovations in account aggregation, security and identity verification, personalization, and smart banking. Developers benefit from the option to use shared or dedicated Backbase environments, as well as multiple sandbox environments to support the development and testing of new integrations and products. BaaS provides 99.9% uptime, database backups and multi-zone redundancy, as well as end-to-end encryption for all communications. The solution meets regulatory requirements, including the ability to audit across environments.

A multiple-time Finovate Best of Show winner, Backbase most recently demonstrated its digital banking platform at FinovateEurope 2018. Headquartered in Amsterdam, the Netherlands, and founded in 2003, the company inked a deal with Payveris late last year to provide FIs with an integrated digital payments and money movement solution. With more than 100 FIs using its technology, Backbase includes Barclays, Citi, KeyBank, Navy Federal Credit Union, and Societe Generale among its customers.

With Plaid, Visa embeds itself deeper into the fintech ecosystem

Visa‘s $5.3 billion acquisition of data aggregator Plaid puts the company’s tool set at the center of financial services innovation.

The move embeds Visa deeper into the payments infrastructure, allowing it to expand its footprint and diversify its product and service offerings.

“Fintechs are increasingly developing on bundling and repackaging financial services payment and funds, movement capabilities, all with end-users in mind, and these fintech offerings are being used more and more,” said Visa CEO Al Kelly in a call with investors Monday. Plaid will allow Visa to extend the reach of its payment solutions and value-added services, he added.

Stephen Greer, senior analyst at Celent, said the acquisition was a strategic move for both companies and that Visa will be able to play a more active role in shaping open banking through Plaid. 

“Rather than investing into interbank real-time payments clearing and settlement infrastructure (non-card rails), Visa is focusing on services on top of rails,” Greer explained, in a statement. “Helping a growing roster of fintech companies connect to traditional bank and card accounts is an important component of that strategy. Visa’s global presence will also help Plaid accelerate growth into other markets.”

With Plaid comes new revenue opportunities through access to Plaid’s client network, including support for issuer banks that intend to work with fintechs. 

“Plaid’s APIs give Visa a new pathway to data-driven revenue streams,” Richard Crone, a payments consultant, told PaymentsSource. “The popularity of embedded banking is seen in Google Cash, Libra and other forms of ‘headless banking’ where banking companies are underneath someone else’s brand or letterhead.”

See also: Plaid expands to France, Ireland and Spain

According to a presentation to investors, Plaid is connected to 2,600 fintechs and more than 11,000 financial institutions. With that network, Plaid services more than 200 million user accounts. One in four consumers with a U.S. bank account have used Plaid, according to both companies.

Meanwhile, Plaid positions Visa nicely to accommodate European banks seeking to comply with data protection regulations such as GDPR and PSD2. 

“The impacts of GDPR and PSD2 continue to be a source of concern for some investors,” a Morgan Stanley research note on the acquisition observed. “Visa and Mastercard are in a strong position to offer open banking solutions to banks and fintechs to mitigate some of these potential headwinds, and Plaid should be a nice addition to Visa’s product suite.”

The acquisition has also raised questions about the future of other aggregators. Raymond James, for example, published research examining whether wealth management tech firm Envestnet should sell data aggregator, Yodlee, which it acquired in 2015.

“It’s possible that Envestnet could shift from being the owner of Yodlee to a client of Yodlee with minimal disruption to Envestnet’s core financial advisor-client base,” the report said. “Assuming this to be the case, Envestnet’s board of directors may potentially look at the rich valuation Visa is paying for Plaid and conclude that a sale of Yodlee is in Envestnet’s shareholders’ best interest.”

Despite the promise of owning a deeper relationship with banks and fintechs alike, as well as the international expansion benefits to both companies, Visa cautioned against prejudging the results of the acquisition in the short term. According to the company, acquiring the data aggregator is a long-term move to align Visa’s business plan with the growing ecosystem of fintechs that require secure connections to account data.

“This is not a one- or two-year revenue growth opportunity,” said Vasant Prabhu, chief financial officer at Visa, during the call with investors. “This is a decadelong opportunity that, in our view, transforms both their business and ours.”

—Suman Bhattacharyya, Angely Mercado and Rick Morgan

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

Tradeshift Lands $240 Million as it Inches Toward Profitability

Supply chain payments company Tradeshift just unveiled details about a $240 million funding round today. The investment– a combination of debt and equity– comes from new and existing investors. Tradeshift’s total funding is now $672 million.

The San Francisco-based company will use the investment to boost expansion efforts and gear toward a “direct path to profitability in the near future.” The funding will also be used to grow Tradeshift’s network finance program that provides liquidity to companies in 100+ countries.

And it appears that Tradeshift is already on the right track. Last year the company tallied record expansion; growing its revenue more than 60% and closing more than 300 enterprise deals. What’s more, 40% of the total transaction volume across its platform occurred in the last 12 months.

“It’s clear that the investor community has a strong focus on growth combined with profitability and they like our plan,” said Tradeshift CEO Christian Lanng. “As a network business, growth is always going to be a key part of our story. But it’s also important that we manage that growth responsibly.”

Tradeshift’s business commerce platform connects more than 1.5 million companies across 190 countries. To date, the company has processed more than half a trillion dollars in transaction value. After Tradeshift’s most recent funding round of $250 million last spring, the company’s valuation was boosted to $1.1 billion.

As for 2020 plans, Lanng said that the company’s focus “will be about doubling down in areas where we’re seeing the greatest momentum while continuing to ensure we have the necessary balance in place to fully capitalize on the enormous opportunities in front of us.”

Temenos launches cloud-based banking distribution services

Temenos launches cloud-based banking distribution services

Temenos, a Switzerland-based banking software developer, announced the launch of Temenos Infinity Distribution Services, a suite of cloud-based banking distribution services that use artificial intelligence to help financial institutions transform their legacy systems to modern, digital platforms. 

The platform will help banks offer everything from digital onboarding services to funds authorization, marketing and other services that banks of any size can deploy out-of-the-box. 

“All banks today want to differentiate themselves and now they understand that to deliver standout customer experiences, they need to look beyond their app look and feel,” Darryl Proctor, product developer, digital at Tememos, said via email. “Banks now need the next generation of hyper-personalized, AI-driven experiences delivered independently of their core banking, which often means gathering data, pushing data and understanding data from multiple systems in a bank’s myriad of systems and services just to make a simple payment.”

The company said Temenos Infinity is available on premise, as a software-as-a-service offering or in the cloud via Microsoft Azure, AWS or Google Cloud. 

Cover image: Temenos.

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

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

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