The Winning Ten: Finovate Alums Earn Spots on the 2020 Fintech Power 50

The newly-released Fintech Power 50 for 2020 features ten Finovate alums. The roster is produced every December and bills itself as “meant to be controversial and provoke debate” while at the same time providing “inspiration to the rest of the industry.”

“Throughout its first year the Fintech Power 50 has seen consistent success for our members and we are very proud of the opportunities that being a member of the Power 50 has offered the companies involved,” Fintech Power 50 Managing Director and co-founder Jason Williams said. “We look forward to continuing the traction we have made this year with the 2020 cohort, with a more ambitious and exciting programme.”

The Finovate alums to make the cut are:

The Fintech Power 50 aims to help fintechs reach a broader audience around the world. Over the course of 2020, the program will offer media partnerships and networking, business development and branding support, and investment and talent acquisition. This year marks the third edition of the program; coincidentally, the 2019 Power 50 featured ten Finovate alums, as well.

“We’re incredibly excited at this announcement, which is clear recognition of Keepabl’s value to customers, and to trusted advisers alike, and our potential to keep disrupting compliance-as-a-service,” wrote Keepabl CEO Robert Baugh in an email.

CREALOGIX CEO David Joyce added that he was “looking forward to exchanging ideas with the renowned digital leaders in this unique group.” He praised the way the roster reflected “the breadth, diversity, and creativity of the global fintech scene.”

The Fintech Power 50 2020 also features ten fintech thought leaders whose names will be familiar to Finovate veterans. Nine of the ten – David Birch, Ghela Boskovich, Theo Lau, Brett King, Jim Marous, Devie Mohan, David Parker, and Ruth Wandhofer – have made major contributions to our Finovate conferences since we expanded our format in 2017. We’ll have to get Mr. Lawrence Wintermeyer, co-founder of Global Digital Finance and the tenth thought leader on this year’s Fintech Power 50, to a Finovate stage sooner than later!

See the full Fintech Power 50 2020 list.

Cash payments in Canada declined 40% in 5 years: report

Cash payments in Canada declined 40% in 5 years: report

iStock photo

Cash payments in Canada declined 40% in volume over the last five years, according to a recent report from Payments Canada, an organization that operates a payment clearing and settlement system in the country. 

According to the report, Canadians are rapidly adopting newer digital channels, such as contactless, e-commerce, mobile and online transfers, in favor of cash.

The newly released 2019 report analyzed the 21.1 billion payment transactions made in the country in 2018, totaling more than C$9.9 trillion ($7.5 trillion) in value.  

Electronic payments accounted for 73% of total payments volume and 59% of total payments value. The report also revealed that contactless payments grew 30% year-over-year in 2018 with a total of 4.1 billion contactless payments (card and mobile) worth C$129.9 billion at point-of-sale.

Debit, often viewed as a convenient substitute for cash, represented almost 60% of volume of these contactless payments. In fact, debit card use overtook cash for the first time in recent years, the report said. 

Meanwhile, credit card use has accelerated dramatically with a 52% increase in transaction volume over the last five years. Canada currently ranks second with highest volume use of credit cards per capita in the world after South Korea, according to the research.

Credit cards are now on par with debit cards as share of overall payments volumes, at 29% and 28% respectively in 2018, the report said. 

“There has been a remarkable transition from paper-based to digital payments over the last five years, but there is still a huge opportunity and need to advance Canada’s payments landscape,” Cyrielle Chiron, head of research and strategic foresight at Payments Canada, said in a statement. 

Payments Canada is responsible for ensuring that financial transactions in Canada are carried out securely each day. It complied the report by collaborating with payment service providers, payment consults and researchers to form the understanding of the payment landscape in 2018. 

Topics: Mobile Payments, Region: Americas, Trends / Statistics

Sponsored Links:

Related Content

Latest Content

Weekly Wrap: Canadian fintech gets funding injection, as BMO tackles gender identity

Welcome to the latest episode of our weekly wrap video series, for the week ending Friday, December 6, 2019. In this episode, Suman Bhattacharyya, senior editor, and Angely Mercado, associate editor, discuss the following news developments: How Canadian venture capital firm Portag3 is continuing its global push with the recent close of a C$427 million …Read More

Start Your Free Week Trial Today!

Subscribe now to start your free trial and continue reading. Just $5 per week after.*

Keep Reading

*Option to choose between monthly and annual billing.

Already subscribed? Log in below.

Canada’s CWB Bank to embed ‘explainable AI’ in digital platform

Canadian business bank CWB Financial Group will roll out personalized insights within its app and online platform in 2020. Jeff Wright, CWB’s senior vice president of client solutions, said the bank will be able to deliver proactive advice on cash flow challenges and opportunities, including, for example, personalized guidance on money management, forecasts and product …Read More

Start Your Free Week Trial Today!

Subscribe now to start your free trial and continue reading. Just $5 per week after.*

Keep Reading

*Option to choose between monthly and annual billing.

Already subscribed? Log in below.

Plaid, Kabbage: Clearing House Model Agreement creates ‘uneven playing field’

The Clearing House (TCH) showed encouraging progress for the digital financial ecosystem last month when they proposed their model financial data sharing agreement.

Image via Plaid

Kabbage and Plaid support simple and uniform rules for data sharing. Plaid helps consumers connect their bank accounts to the apps they want to use, so ensuring that consumers get the choices and control they want is a core principle for us. Unfortunately, while TCH asserts that its proposed agreement would increase consumers’ control over their own financial data and encourage innovation, in reality it would do just the opposite.

The TCH model agreement is based on bank-oriented controls that won’t work at the scale of fintech as it exists today, where consumers and small businesses can choose from more than 3,000 innovative apps and services.  And it won’t work for a future where those choices continue to grow.

The financial ecosystem is growing and creating competitive market forces that are positive for consumers. TCH’s one-size-fits-all requirements creates a barrier to entry for small financial products and innovators, an uneven playing field that exempts banks from contract terms imposed on non-banks, and minimal obligations for banks to alert data recipients to changes that impact their services. This only serves the largest banks in a changing market that competes on bespoke financial services.

In its current version, the TCH proposal would let banks – not customers – decide which data they could share, which apps they get to use, and how customers are allowed to use their own data when they choose to permission it. Banks could block customers from using applications that are more competitive or better designed for their needs and use cases. For example, a bank could stop their account holders from comparison shopping for a better mortgage or small business loan.

The heart of the proposal reflects a vision where your bank must pre-approve any fintech apps before you use them — and the bank could terminate access at any time if the service “contradicts [the bank’s] business guidelines.” This vague wording means your bank could stop you from sharing your own data with a company whose services you choose to use.

It’s concerning to empower a bank to prevent competitive providers, like a payment processor or a personal finance management app, from serving their own customers. This removes consumer choice and potentially forces customers to use the bank’s native product or pay for the privilege of using another application.

There’s no good reason to prevent customers from sharing their own simple account data. In fact, Dodd-Frank Section 1033 protects just this kind of data sharing that customers clearly want. In a national survey commissioned by Plaid in 2018, a large majority of respondents said they should be able to access and share their financial data with others, with no fees or restrictions.

See also: Clearing House sets data-sharing framework, but the devil is in the detail

Fortunately, the TCH proposal isn’t the only option for financial institutions. Forward thinking banks, including several of TCH’s members, have signed customer friendly agreements with aggregators that don’t restrict customer data or impose unnecessary fees.

TCH does move the ball on several provisions that are positive for customers. First, it prohibits the sale of customer data without consent, and second, requires customer consent before sharing data. Finally, the proposal ends the collection and sharing of customers’ banking credentials, including usernames and passwords, a goal the fintech community shares wholeheartedly.

The proposal’s request for feedback is most welcome, but everyone – customers, fintechs, regulators, and banks — should be skeptical of overly prescriptive terms that put large institutional interests ahead of customer choice and open innovation.

TCH did well to generate this model agreement in response to growing demand for consumer-controlled financial data, but the details show that we still have a way to go. Customers should have predictable experiences and competitive products whether they bank with a major Wall Street institution, a digital native neobank, or their neighborhood credit union.

John Pitts is policy lead at Plaid and Sam Taussig is head of global policy at Kabbage.

Bank Innovation Ignite, which will take place on 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.

Applications open for the 2020 Auto Finance DEMOvation Challenge

Bloom’s CEO Jesse Leimgruber (left), stands with Auto Finance News CEO JJ Hornblass at the 3rd annual DEMOvation Challenge at Omni San Diego.

Auto Finance News is excited to announce that applications are open for the 2020 DEMOvation Challenge, which will take place at the Auto Finance Innovation Summit on March 10-11 at the Omni San Diego.

The 4th annual DEMOvation Challenge offers startups 5-years-old or younger the opportunity to showcase their technology in front of a wide audience of auto lending and leasing executives during the two-day innovation event.

Technology startups with an eye toward auto finance are invited to fill out this short survey to be considered by the Auto Finance News editorial team for a DEMOvation slot. Startups are required to present a live demo at the event.

Past winners include Bloom, a decentralized data security solution powered by blockchain, and used-leasing app Fair.

The Auto Finance Innovation Summit is part of Auto Finance Accelerate, a three-day event that includes the Auto Finance Sales & Marketing Summit, and dives into the strategies and knowledge needed to enhance your company’s auto finance sales, marketing, and innovation. Register before Friday, January 31st to save with early registration rates. Visit to learn more.

  Like This Post

Banks looking for cultural alignment with fintechs

“I understand in the past there was that fear – Are the fintechs that are emerging going to be competitive to us?” asked Mohamed Zaraket, EMEA digital lead at BNY Mellon, during a panel at FinTech Connect in London this week. “Now that’s completely immature and everybody knows that we want each other, but when [banks] look outside we need to understand: How are you helping us? Are you actually helping us solve a problem? … If you are a viable partner, how does your culture fit with our culture?”

The panel featured retail, investment and challenger banks.

Zaraket said he is wary of cultural differences between banks and fintechs, as a fintech’s culture of disruption is unlikely to match that of a bank.

His point was echoed by Gonçalo Santos, head of digital platforms at challenger bank BNI Europa.

“I think finding the right culture fit is the ideal situation … Fintechs are always focused on the client, always focused on innovation. Us banks have to deal with so much regulation and internal formalities, that it’s very hard to be in touch with the fintech mindset.” He said both sides need to be willing to adapt and not get frustrated by cultural differences.

Fahd Rachidy, founder and chief executive officer at ABAKA, a cognitive financial advice platform argued that the space for experimentation provided by fintechs is their greatest strength for financial institutions.

“What partnerships with fintechs provide is actually an environment where you can do a lot more of these experiments,” said Rachidy.

Magdalena Kron, head of rise at Barclays suggested firms could be nimble in their approach to the fintech ecosystem.

“There are ways to be able to experiment in a safe environment…There are a few start-ups that are doing this, creating data silos that you can play around with. So that’s not an excuse for financial institutions to not experiment and not adopt a more agile or lean mindset.”

Still, willingness to experiment is not the only factor banks look for in a fintech. Emma Huntington, director of innovation and venturing at Nationwide, said banks tend to invest in fintechs that already possess a strong sense of purpose.

“When we partner with organisations that are more propositional in nature, there tends to be a slightly longer timeframe … What we’re all trying to do is de-risk what we’re going to invest lots of money in by testing with real people with live data, and that’s the challenge. That’s what we all want to get to.”

Another way to reduce risk is to focus on several partnerships at once, according to Santos.

“Something we’re trying to do to reduce the risk is that usually we don’t put out a new business or a new tool that is fully reliant on one partnership. We try to bring together a number of different functionalities and technologies that put together, will bring possibilities for the bank.”

An Accenture report from September predicted that banks could lose up to $280bn in revenue by 2025 as non-banks grow in the payments space.

Huntington said partnerships would benefit both parties.

“We want to learn from [fintechs]. Because these people are immensely smart and focused on one problem – that’s fantastic for us to partner with them, and it works both ways. There are areas in the fintech business that aren’t necessarily as mature, and that’s where we can partner and help.”


Related reading

SumUp Partners with German SME Digital Bank Penta to Support Offline Commerce

Penta Partners, Berlin’s digital banking platform for small and medium enterprises (SMEs), has partnered with UK-based card reader SumUp to help its move into the traditional business space, reports Ruby Hinchliffe of Fintech Futures (Finovate’s sister publication).

Breaking out of its customer niche, which until now has been online-savvy entrepreneurs looking to avoid traditional bank processes, Penta will now expand its offering to restaurants, healthcare professionals, architects and manufacturers to name just a few of the longer-established sectors.

“We are now expanding to serve traditional industries, which form the backbone of German and European society and economy,” said Penta CEO Marko Wenthin, who believes these areas are “forming the largest part of the SME market in Germany and Italy” but don’t get the attention of traditional banks.

Acquired by German fintech company builder Finleap in April 2019 just months after raising $7 million in a Series A funding round, Penta used the acquisition to expand into Italy in partnership with Beesy, a Finleap portfolio company which focuses on digital business banking for freelancers.

The fintech says it already serves SMEs better than traditional banks, offering them a digital account-opening process, multiple payment cards, grant limits and team permissions, expense management and integrated accounting tools.

Now, with SumUp, it can offer SMEs the ability to accept card payments.

“By cooperating with partners who enable our customers to simplify bookkeeping, employee benefits and management or make foreign payments, Penta is already now the default financial platform for SMEs in both Germany and Italy,” Wenthin added.

SumUp demonstrated its technology at FinovateEurope 2013. Founded in 2011, the London, England-based company has raised more than $425 million in funding.

Bakkt CEO Loeffler to step down after being named to US Senate

Bakkt CEO Kelly Loeffler will step down from the digital currency startup after being named to replace Georgia Sen. Johnny Isakson, who is retiring at the end of 2019. 

Intercontinental Exchange Inc., which owns a majority stake in Bakkt, thanked Loeffler for her extensive run with Bakkt and her role as a marketing, communications and investor relations roles within Intercontinental Exchange, as well as her status as a member of the executive management committee.

“We are grateful to Kelly for her many contributions to Intercontinental Exchange spanning 17 years and will miss her wisdom and counsel on the executive team and leadership of Bakkt,” Josh King, a spokesman for Intercontinental Exchange, said in a company release. “Intercontinental Exchange has a proud tradition of service to the community, and we applaud Kelly’s sense of duty to step forward to serve her country and represent the people of Georgia in the U.S. Senate. 

The senior management of both companies will work together closely after Loeffler leaves her post. There is no immediate word on a successor. 

Bakkt announced earlier this year that Starbucks would be the first launch partner of its consumer crypto rollout in 2020.



Topics: Bitcoin, Cryptocurrency, Mobile Payments, Regulatory Issues

Sponsored Links:

Related Content

Latest Content

Chase's Brown wants customers to feel like they accomplished goals
SunTrust Banks' Vitale says mobile customers still want a little bit of friction

SunTrust Banks’ Vitale says mobile customers still want a little bit of friction

Andy Vitale, head of user experience design at SunTrust, says creating a mobile banking experience for customers is about learning how they use their devices both in and out of the bank. He said that customers in banking, as opposed to e-commerce, actually want a little bit of friction before they complete their transactions.

Chime raises record $500M in Series E to grow digital banking products

Chime Bank has raised a record $500 million in a Series E round led by DST Global, the largest ever equity investment in a challenger bank, valuing the bank at $5.8 billion, a Chime spokesperson confirmed. 

The round, first reported by CNBC, was backed by General Atlantic, Iconiq, Coatue, Dragoneer and Menlo Ventures. The investment is the largest single round ever raised for a challenger bank, according to CB Insight, surpassing the $400 million raised by Brazil’s NuBank. 

Funding will be used to expand its product line and double headcount by 2020, as well as open a new office in Chicago. The acquisition of other fintech firms is on the table as well. 

Chime’s funding marks a considerable bounce back from a series of outages that left many of its 5 million customers unable to conduct transactions, the last outage occurring in mid October. The funding is also a shot in the arm for the critical gig economy segment, which has disappointed Wall Street with debacles from WeWork, Uber and others. 


Topics: Mobile Banking, Mobile Payments, Venture Capital

Companies: Chime

Sponsored Links:

Related Content

Latest Content

PCI SSC publishes new standards to grow use of contactless payments

PCI SSC publishes new standards to grow use of contactless payments

The PCI Security Standards Council published a new data security standard that will let merchants accept contactless payments using commercial off-the-shelf mobile devices, like smartphones and tablets that utilize near field communications.

The initiative is part of an effort to enhance global data account security by developing standards and programs that support secure payment acceptance in new and emerging payment channels. 

“Contactless, or tap and go, payment adoption is on the rise globally, and merchants want affordable, flexible and safe options for contactless payment acceptance that allows them to best serve their customers,” a spokesperson for PCI SSC told Mobile Payments Today via email. 

The idea is to create a standard security framework so merchants can accept payment on these devices without the need for additional hardware. 

“Ultimately this will lead to more opportunities for merchants, especially those not based in a fixed location or those new to card acceptance, to accept contactless payments in a secure manner,” she added.

Cover image: PCI SSC.

Topics: Contactless / NFC, Handsets / Devices, Security

Sponsored Links:

Related Content

Latest Content

JPMorgan Chase enters deal with Envestnet on customer data privacy

JPMorgan Chase entered an agreement with data aggregator Envestnet Yodlee that will give bank customers more control over their financial information when using mobile apps. 

Normally the data firm shares Chase customer data with other financial apps and companies in order to help Chase customers make better decisions about how to manage their money. The agreement calls for Envestnet Yodlee to send all of the requests for Chase customer data through the bank’s secure API, which will help customers control how their data is shared. 

“Our partnership with Chase will allow further consumer choice, reliability and insight into how and where their data is being used, along with improved overall financial well being,” Stuart DePina, CEO of Envestnet, said a release from Chase. 

“This will help our customers manage exactly who they give their information to, and understand how their information will be used,” Bill Wallace, head of digital at Chase, said in the release. “They also can cancel that access any time they want.”

Chase said it now has signed data agreements with a number of data aggregators and fintechs, including Finicity, as well as Intuit, the company behind Turbotax, Mint and QuickBooks. 


Topics: Mobile Apps, Mobile Banking, Regulatory Issues

Sponsored Links:

Related Content

Latest Content

Cardpay: Tackling the Issues of Local Payments and Cart Abandonment

Payment products can often be a headache for retailers who struggle to cater for the needs of a global audience with a local wallet. However, one fintech payment provider believes it can change that. 

David Backshall

Cardpay offers access to over 300 different payment methods, all through an API that integrates seamlessly with the merchant’s back end. To find out more, the Fintech Times team sat down with David Backshall, the Commercial Director at Cardpay.

So David, what is Cardpay?

In short: Cardpay is a global payments acquirer. We provide easy access to local and international payment methods for eCommerce companies looking to sell their products and services internationally.

We have payment solutions for industry verticals from travel to marketplaces, digital entertainment and beyond. 

What are the major trends are you seeing in e-commerce right now?

Customer experience and user on-boarding, without a doubt. For any eCommerce business to flourish, it has to confidently answer the questions of how they acquire customers, interact with them and how they can lower the bar for entry for newcomers to the digital market. 

To really set yourself apart from other brands on the digital market, you need to be as frictionless as possible. A lot of the trends we’re seeing have oriented around user experience and how to create the perfect journey from selecting a product to buying it.

Where do you see e-commerce businesses going in the next few years?

Interestingly enough, we’re seeing the vast majority of businesses venture into the world of retail and online marketplaces. We can easily point to the successes of businesses like Amazon in the western hemisphere, and the likes of Rakuten, Alibaba and others in the Asian continent. 

It’s been fascinating, really, to see just how retailers are changing tact in order to re-invent and introduce themselves as digital marketplaces. The results are impressive; with many of them managing to grow their brand and increase the financial margins of their businesses too. 

Above all, they’re working to provide consumers with the much-needed choice on what they select and buy.

So would you say that Asia is leading the pack in terms of marketplaces and e-commerce?

Asia’s very interesting because you can just look at the success of Alibaba during Singles Day. Reports on sales over that 24 hour period reached $38.4 billion, which is staggering. This performance is hardly surprising when we look at the longer trend of consumers though; the vast majority of payments were made through domestic payment methods (AliPay, WeChat Pay), and disproportionately via mobile.

These trends are ones that we can see throughout the entire continent. All Alibaba and other businesses are doing are responding well to what they’re seeing in China and Asia, in general. But another key takeaway is the fact that marketplaces are able to really provide consumers with variety and ease of use.

It’s been fascinating, really, to see just how retailers are changing tact in order to re-invent and introduce themselves as digital marketplaces.

What do you think made Alibaba and a few others such a dominant force?

Well, there are a couple of things to consider here. Regarding population, I think China has a distinct advantage; having a population of 1.4bn give or take. But it’s also taking into consideration just how its population has reacted and adapted to these innovations. 

Asian marketplaces were able to provide a seamless shopping experience, encouraging mobile shopping and providing payment options used by local consumers. Credit where credits due: the population of Asia use these services at a faster pace than any other continent, thanks to the infrastructure created by marketplace players. 

You need to combine emerging middle class, rapid growth in internet penetration, high-capacity mobile networks and the state of the art payment ecosystem to realise just what kind of monumental potential exists here.

Put simply, what we provide is one single API integration, allowing merchants to take over 300 different payment methods, allowing them to increase their conversion rates in those countries and minimize the likelihood of cart abandonment. 

Do you think that this model will be replicated in other regions of the world? 

I think what you’re seeing at the moment in the West is a high street that is undergoing dramatic change. Consumers are after choice and ease of use; they want to shop for what they want when they want and how they want. 

In Africa and Latin America, it’s only now that we’re seeing more consumers getting online for their shopping, compared to a few years back. What they find is that there’s more choice, more accessibility, and much less hassle than if they’d have stuck to brick and mortar. 

It stands to reason that more people will make that migration from offline brick and mortar to online marketplaces. With all of this happening, the former will have to really look at how it can adopt, adapt and improve in the face of this rapidly digitalising game. 

How does Cardpay play in to that?

At Cardpay, we work to connect these digital merchants to the consumers that they’re looking for, allowing them to readily take payments from them using a wide range of international and domestic payments.

Put simply, what we provide is one single API integration, allowing merchants to take over 300 different payment methods, allowing them to increase their conversion rates in those countries and minimize the likelihood of cart abandonment. 

In essence: we help you unlock local markets potential and start generating sustainable revenue streams. 

What do you see the trends being as actual payment methods in those countries? 

We observe that a preference for a local payment method varies by country.

While debit and credit card payments are tried and tested in the western hemisphere, they may not be as widespread in other regions, let’s say Brazil as an example. Consumers will, instead, prefer to use a local payment system like Boleto. 

The reasons may vary too – from a lack of trust in online payments to a better convenience factor. Flexibility and ease of use are the names of the game when talking about eCommerce payments. It’s for this reason that we have an ‘open-door’ approach to payment methods, so we can help our customers find and use the right payment methods for the right country. 

Do you see an increasing demand for crypto payments? 

Yes, we do. We have our own crypto solution where we provide merchants easy access to accept cryptocurrencies as a payment method.  

We do the conversion in the background and settle in fiat currency so they don’t have to think about the rates, or what to do with the coins. This is an in-house solution as well, so we don’t use any third parties for it. As digital content consumption accelerates we see that more and more merchants are willing to let customers pay in crypto and our payment platform can easily accommodate this. 

Please follow and like us:

The Growing Trend of Ecosystems Within Financial Services

By Alan Donnelly, Head of Financial Services at Salesforce

The financial services industry is starting to wake up to the idea of ecosystems and partnerships between challengers and traditional banks.

In the coming year we will see the discussion evolve from old vs new and see real-world examples of financial services organisations of all shapes and sizes working together.

Many banks are realising that they need to harness the customer life-cycle through data and agility. They need to identify those “magical moments” that make up their customers’ life, such as setting up a pension or planning for a family, and offer seamless and personalised services for all stages.

“Competition in financial services will shift from individual banking products to shared marketplaces.”

Challenger banks are booming due to agility, ease and convenience of their platforms. They are digitally native, designed from the bottom-up for a customer base which is increasingly becoming reliant on mobile. But these organisations are young, and do not necessarily have the wealth of data that traditional banks do.

Traditional banks possess information from individual accounts, but they also have insight into how the individual or household spends and saves. They can see how accounts are used and start to plot these crucial life moments, a vital differentiator.

Ecosystems offer a marketplace of financial services that consumers can dip in and out of according to their needs, whether this be a mortgage or a student loan, accessing the best products out of a large portfolio. This gives traditional banks the agility they need to stay relevant, and challengers access to the data required to understand customer needs and habits. It also creates compelling new business partnerships as buying a home for example has many facets not just the need for finance.

“The future is all about partnerships between old and new.”

We are already starting to see movement towards ecosystems with concepts such as Facebook Pay, which is consolidating payments across all of its apps. The race is now on to provide platforms that consumers will go to for every aspect of their financial lives. Competition in financial services will shift from individual banking products to shared marketplaces.

The next year will be a crucial time for the financial sector. As banks get to grips with adopting and feeding into this ecosystem, consumers will see the agility and personalisation of financial services go to a whole new level. The future is all about partnerships between old and new.

Please follow and like us:

Christine Lagarde pioneers ECB climate change policies – what can Fintechs do?

Christine Lagarde made waves when she got chosen as the first woman president of the ECB. Now she is making waves with her push for climate conscious monetary policies.

In her new role as the ECB president, she is hitting the ground running with some amazing policy work around climate change. The vision is to make sure that the ECB considers climate change as a ‘mission critical’ priority. Some say, she won’t achieve it. But few have even tried it before.

Lagarde is keen to ensure that the ECB will start focusing more on Green assets (green bonds for example), and unwinding assets in their portfolio with high carbon footprint.

The COP25 climate conference is happening in Madrid this week. Just before it kicked off, the European parliament declared a climate emergency. On the contrary, the FED chose to dig its head into the sand, and stressed that Climate change was a political issue and not an economic/financial one.

I disagree with the position of the FED. Top down recognition of where we are with climate change, is very critical to get to a sustainable world for future generations. Climate change is not just a political issue, it is not just an economic issue, it is an existential issue – both literally and philosophically.


Image Source

So what needs to be done bottom up? A lot.

Let us take an example of how climate change affects all of us at the grass root level. Forget extreme weather conditions for a bit. Forget rising seas and melting ice.

I was at the Sustainable finance event on 04/12, in London, hosted by Finextra and Richard Peers. We had several interesting discussions, but there was one story that came out in the discussions that hit me hard was this.

Last year, several Scandinavian countries became net importers of corn, from being net exporters. This was largely due to dry weather and a fall in crop production, that they hadn’t really planned for. As a result, countries like Sweden had to import Corn from other parts of the world, as customer demand for the crop had to be met.

When they tried to scale the import activities, they found that, they didn’t have enough port capacity for the ships that carried corn – they hadn’t planned for that. They hadn’t planned for the logistics around getting the crops integrated into the country’s distribution network.

All this meant additional costs to get the crops to supermarkets and as a result, the price of the crops and products based on the crops went up.

When such sporadic occurrence happens at scale, we see a systematic risk leading to inflation – and then perhaps the FED will start looking into it. This is also an example of how climate change can affect global trade balance, which is another key economic issue that the FED can’t ignore either.

The BoE on the other hand has already planned to integrate climate risks into the stress testing framework for banks. It is good to see that the UK and Europe are moving in the right direction – they often have.

That’s the top down work that is ongoing and more needs to be done. Let’s look at how Fintechs can help the bottom up push. There are several use cases where they can help. Some of my favourite ones are are,

  • A climate rating startup for corporates – like an Experian for credit
  • Climate risk calculators using alternative data
  • Trade and supply chain data capture – to identify climate efficiencies and spot pain points
  • Crop insurance that triggers claims when there are climate anomalies
  • An IoT based data capture mechanism that will give retail customers climate points – that they can cash out or use for borrowing

.. and I haven’t even scratched the surface with that list. We should see more such Fintechs starting to become main stream in the near future.

I have touched upon ET Index – a startup based out of Level 39 in London before. We will need more such firms to gather data about corporates and how green they were. We also have firms that are looking at climate credits – however, we will now see some of them going big.

On supply chain and trade finance – startups can add a lot of value by capturing and sharing climate data across the value chain. Data captured need to be validated and validated data could be used as a credibility score for different stakeholders in the supply chain. It could be everything from how green the manufacturing process was, what the carbon footprint of the logistics was, usage of plastics, water footprint etc.,

These are all pretty basic use cases that can add value for future generations. The key question is, will startups see these as major opportunities? And if they did, will the innovation ecosystem be supportive?

Now, as the bottom up tech driven initiatives ramp up in the next few years, we should ideally see a point of convergence with top down climate policies. A massive challenge and an opportunity to get there – may be that’s the next big thing in Fintech.

Radius Bank bets on automated customer acquisition

Radius Bank, a digital bank with one branch and $1.4 billion in assets, is joining the growing movement among financial institutions that want to move away from paid search to automated customer acquisition methods. The bank announced Thursday that it’s integrating its savings account with financial advice platform and referral engine NerdWallet, allowing customers who …Read More

Start Your Free Week Trial Today!

Subscribe now to start your free trial and continue reading. Just $5 per week after.*

Keep Reading

*Option to choose between monthly and annual billing.

Already subscribed? Log in below.

BIS wants central banks at center of digital cash revolution

Central banks must embrace the revolution under way in digital money to ensure they remain at the heart of the global payments system, according to the head of the Bank of International Settlements.

Agustin Carstens’s argument is that while the private sector “excels at customer-facing activity,” central banks provide the basis for trust, ensure liquidity and set standards. He’s unenthusiastic about Bitcoin and is worried that big tech companies like Facebook offering payment services means they could become unfairly dominant because of their existing data resources.

“We have a responsibility to be at the cutting edge of the debate,” BIS General Manager Agustin Carstens said in a speech on Thursday. “There is really no choice but to do so, as otherwise events will overtake us.”

Carstens, who kicked off his BIS term urging authorities to rein in digital currencies, has since overseen the implementation of a hub to foster collaboration in financial technology. But his caution is clear, and he warns that people shouldn’t be blinded by shiny new things at the expense of stability in the financial system.

“A gleaming skyscraper is an awesome sight. But when we admire one, we often overlook its foundations. These are out of sight, below ground level. But just because they are not visible, it does not mean that they don’t matter. On the contrary, they matter a lot.”

In his speech at Princeton University, Carstens addressed central bank issued digital currencies. While institutions are looking into the idea, caution still rules. Speaking in the European Parliament this week, ECB President Christine Lagarde said it’s “an area where we have to rush slowly,” noting risks for customer security and financial stability.

Carstens gave a green light to wholesale CBDCs, as they’re known, because they’d be restricted to institutions that already have access to central bank deposits, but said issuing them to the general public is perilous.

“Imagine if anybody could open an account at the central bank” he said. “In extreme cases, the central bank could become the one-stop banker for almost everybody in the economy,” which would constitute a “daunting” risk.

— Catherine Bosley (Bloomberg)

Temenos Teams Up with Egyptian National Post

Egyptian National Post Organization (ENPO) has selected Swiss technology firm Temenos and its T24 Transact core banking system, replacing 20 legacy systems in the process, reports Alex Hamilton of Fintech Futures (Finovate’s sister publication).

T24 Transact will be deployed in the cloud alongside the vendor’s Infinity digital front office solution. Both will be used to underpin the firm’s drive to meet the Egyptian government’s financial inclusion initiatives.

ENPO has a network of 4,000 branches via its iPost, Post Express, and Post Cars channels. It provides financial services, including current and savings accounts, instant remittances, electronic collection with notification services.

Temenos said that it will be delivering a “single, packaged and upgradeable banking platform” and help EMPI create an “omnichannel, unified teller for all financial and non-financial services.”

“Egypt is a country of great importance for Temenos; we are the leading banking software provider serving over 12 banks in the country and have been in the region for over two decades,” said Andreas Andreades, executive chairman at Temenos.

Egypt’s National Financial Inclusion Initiative, sponsored by Egypt’s Government, aims to promote the use of digital financial services throughout the nation.

“Temenos is committed to enabling Egypt’s Digital Economy Transformation and Financial Inclusion program,” added Andreades. “We believe that ENPO’s end-to-end digital transformation will help them realize this digital vision and promote financial inclusion in Egypt.”

Temenos demonstrated its Connect Mobile Banking solution at FinovateEurope 2015. The company is also an alum of our developers conferene, FinDEVrSiliconValley 2015, where it discussed the evolution of and opportunities in its B2B financial apps marketplace.

Portag3 Ventures closes $320m fund for consumer and infrastructure plays

Canadian venture capital firm Portag3 is continuing its global push with the close of a C$427 million ($320 million) fintech fund this week.

The firm’s second fund will focus on early-stage startups that cover wealth management, banking and insurance, including direct-to-consumer and business-to-business models. The fund broadens Portag3’s institutional backing and diversifies its corporate limited partner base.

“Our mandate has always been global and we’ve been [focused] on where we thought the best opportunity was regardless of where it was domiciled, but having limited partners in different parts of the world will drive origination,” said Adam Felesky, Portag3 CEO. “I would think it will enhance our [outside] Canada origination.”

According to Felesky, the geographic spread of Portag3’s investments will include 50% in North America, 40% in Europe and 10% in Asia.

The firm said it’s interested in direct-to-consumer businesses that are beginning to scale, and are building adjacencies in their models while cross-selling new products and services. For business-to-business solutions, Portag3 is interested in the infrastructure layer, particularly the shift to flexible cloud-based platforms from mainframe, legacy solutions.

See also: Luge Capital’s Gillani: Canada is becoming a test market for fintech founders

Felesky acknowledged that the business-to-business infrastructure field is particularly crowded. The platforms that will stand out, he explained, are companies that offer a tech-first approach, a skilled technical team and a solution that’s easy to implement.

“We look for modularity [with these solutions], so that the incumbents aren’t looking to rip and replace everything at once,” noted Felesky. “They’ll see the ability to take some risk on one part of the solution and build trust over time, and slowly land and expand.”

While Portag3’s approach is global in scale, he emphasized that the Canadian market is still attractive to fintech investors, given the opportunity for a “winner take all” scenario for companies that offer compelling value propositions.

“What’s great about Canada is that once you establish a leadership position, it becomes easier to become the leading brand and it becomes more difficult for others to raise capital against your leading solution,” said Felesky.

New strategic investors committing funds to this round include Alterna Savings and Credit Union, Aviva France, BDC Capital, Caisse de dépôt et placement du Québec and the Public Sector Pension Investment Board.

To date, Portag3’s second fund has made investments in 17 companies, including banking startup Koho, insurance platform Clark, enterprise software company and Diagram Ventures. Through Portag3’s first fund, which was valued at C$198 million ($150 million) the firm invested in large fintech startups including Borrowell, Wealthsimple and Clearbanc.

Bank Innovation Ignite, which will take place on 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.