The battle of Fintech is over, the battle of TechFin is about to begin

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Jack Ma famously called Alibaba and their tech giant peer group – TechFins, declaring their intention to sneak into financial services. Banks were too focused on their battle with Fintechs then, that they perhaps were blindsided by the rise of TechFins. The first quarter of 2019 has been eventful, with major headlines from big tech firms like Facebook, Apple and Alipay.

Over the past few years, since the Fintech boom has been afoot, talks of Fintechs vs Banks have been rife. But only when China saw leap frog moments in its payments landscape, via, Alipay and WeChat, did the industry (both banks and Fintechs) pay any attention to the big tech giants. I have always said that the Tech giants had two big advantages.

They have what the banks don’t have – agility in innovation, and they have what the Fintechs don’t have – Massive Customer base (and their data).

The challenge in exploding into Financial Services for the tech giants was that, it was non-core to them. However, the evolution of Fintech use cases, and the seamless integration of these applications into consumer’s routine, have made them almost invisible. So, all the tech giants had to do was pick use cases where they could be mostly invisible – payments was a low hanging fruit.

Two weeks ago Barclays and Alipay announced their partnership. Alipay will now be available with several merchants across the UK, and allow for seamless payment experience for half a million Chinese residents, tourists and students in the UK.

Barclaycard, which processes nearly half of the UK’s credit and debit card transactions, today announced a new agreement with Alipay, the world’s leading payment and lifestyle platform, which will allow retailers to accept Alipay transactions in stores across the UK

The partnership is for UK retailers to accept Alipay payments without replacing their existing point-of-sale system. Alipay users on the other hand will enjoy the benefits of the seamless journey that they have at home.

The other key event of the last couple of weeks has been THE APPLE CARD. If you haven’t yet heard, good for you and I suggest you google at your peril. But atleast for me, the social media reaction was a bit too overwhelming. My take on the announcement –

THE GOOD

  • Secure card numbers – many of us have faced credit card frauds, but most of us wouldn’t have thought of getting rid of the card details from the face of the card.
  • No fees – Really? Is there a catch? I still can’t believe that. Especially on international transactions.
  • User experience in staying on top of expenses, card balance, interest etc.,
  • Data privacy – Apple have declared that they would stay away from customer data

THE BAD

  • Cashback of 2% is underwhelming. Many providers, including Amazon offer better benefits.

THE UGLY

  • Plastic cards? Let’s all go back to the cave. For how long are we going to hang on to plastic credit cards? That was perhaps the most disappointing thing about the launch for me. And the worst part is, the card only supports chip and pin and won’t support contactless.
  • No Android compatibility – of course, they have always been a closed ecosystem.

Irrespective of the disappointing aspects of the card, I believe, Apple has rocked the boat, and banks are feeling the heat. They are cash rich, know how to create digital+physical products, have a brand following, and can disrupt payments in a bigger way, if they chose to.

With IBM entering the remittance market through World Wire, Facebook testing out Whatsapp payments, Alipay entering the UK market in a big way, and Apple’s recent announcement, the Penny should have Dropped for the banks. And the realization should hit them that Fintechs were more of a distraction, the real battle has just begun.


Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion and a podcast host.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

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Schwab Is Betting Big On Switching Investing To A Subscription-Based Model

Investing and financial planning company Charles Schwab is moving from its current payment model to a subscription-based one that will provide more hands-on assistance, according to a report by Bloomberg.

The company, which handles $3.5 trillion in assets, is hoping the switch will attract customers who are used to paying for services like Netflix every month and who are comfortable with subscription models as methods of payment.

“We are making this change on behalf of our clients to be simpler and more transparent, but we’re also paying attention to the broader landscape,’’ said Cynthia Loh, vice president of digital advice at San Francisco-based Schwab. “Customers are used to engaging with subscription services.’’

The new plan — previously called Schwab Intelligent Advisory — will be renamed Schwab Intelligent Portfolios Premium, and it includes guidance from a financial planner and a plan for finances. The old plan used to cost .28 percent of assets. The new one will cost an upfront fee of $300 and a flat fee of $30 a month.

Customers currently using the service won’t have to pay the upfront fee, but they’ll be transitioned into the new pricing model. However, they’ll only be moved if they have enough in assets to make it cheaper for them, which would be around at around the $125,000 mark.

There’s also a free version called Schwab Intelligent Portfolios, which will automatically build and rebalance exchange-traded fund portfolios.

“There aren’t many firms that have tens of millions of customers,” said Devin Ryan, an analyst with JMP Securities LLC. “That being said, for certain parts of the industry that are maybe tech-driven, incredibly scalable and could potential service millions of people, absolutely I could see there being value to a subscription model.’’

Tech companies have increasingly gravitated toward subscription models, with Amazon, Netflix and Apple being notable examples. Companies with millions of users can see significant revenue from the model. Schwab has about 300,000 accounts and $37 billion across all of its digital offerings.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Amazon’s Alexa For Business Lets Workers Make Custom Voice Apps

Amazon has launched Alexa for Business Blueprints, which are templates for the company’s voice assistant that will allow users to make and publish private voice skills without having to code them, according to reports.

“Private skills are voice-powered capabilities that enhance the Alexa experience while remaining private to members of an Alexa for Business organization. Skill Blueprints are so easy to use, people have used them extensively to create Alexa skills for their households,” Amazon Product Marketing Manager Ben Grossman said in a blog post. “Now anyone at the office can do the same for their workplace, simply by filling in custom requests and responses in one of dozens of easy-to-use Blueprints. IT administrators can then review and enable that content for the company’s users and managed Alexa-enabled devices.”

Some of the available Blueprints are queries like “What’s the guest Wi-Fi password?” or “What are the hours for IT?” Queries might be time-focused, as in “When does open enrollment start?” Other questions could be location-related, such as “Where’s the mailing center?” or could be regarding equipment setup, like “How do I set up corporate email on my phone?”

“Using a link provided by the company’s Alexa for Business administrator, anyone, whether an executive assistant, salesperson, line of business owner, or IT admin, can use any available Skill Blueprint on the Alexa Skill Blueprints website to create, test, and then publish a private skill to their organization,” Grossman said. “Once distributed, the company’s IT admin can then review and enable the skill for the organization’s shared devices and enrolled users.”

Kyle Collins, assistant VP of technology transformation for Saint Louis University, said he plans to use Blueprints to drive student and worker engagement at the university.

“Our resident students have quickly adopted Alexa in assisting them in their daily lives at SLU, which has been made possible through the Alexa for Business platform,” Collins said. “We are also rapidly expanding Alexa out to support our faculty and staff in their workday as well. A main challenge we have faced to date is developing Alexa skills and content fast enough to meet demand. With the new capability to create Alexa private skills based off of Skill Blueprints with no coding required, we have the solution we were looking for.”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Smart Cities? Sure, But Not Without Big Roles For Payments

It started, arguably, with mass transit, though with many bumps along the way, as the problems are slowly being solved while still bedeviling many cities. But transit will very likely be key – whether that means subways, buses or other, more individual forms of motion, such as rideshares or even scooters.

It will certainly involve parking, and then tolls, and then other forms of commerce tied to transportation. Utilities are in the mix, and most likely other services that all citizens must pay for. The rise of smart cities – the “it” – depends on the spread of digital payments, and as progress continues on those goals, it’s worthwhile to take a quick look at the evolving ecosystem and see where things stand as the midpoint of 2019 approaches.

Payments stands as a massive opportunity when it comes to smart cities. Various estimates support that statement, but among the most reliable – and most cited, which means most influential – comes from Visa, which has said the spread of digital payments across 100 cities (including via smart city efforts) would result in a net benefit of some $470 billion annually. According to Visa, the rise of what is called “cashless” cities “could have a catalytic effect on the city’s overall economic performance, including GDP, employment, wage and productivity growth.”

Small Moves First?

Some locations on the smart city path are starting relatively small, at least at first, on the path to more digital payments and the efficiencies they bring.

That includes Birmingham, Alabama, where city leaders are touting “smart” utility payment options – a program that basically means giving consumers many more places to settle their power bills, including common retail locations. Expect to see more such efforts as cities become smarter (a definition that can vary from location to location, but generally means using data, digital payments, sensors and other tools to bring new efficiencies to daily life). Of course, such efforts involve not only a city, but also a utility provider (and sometimes regulators), making even such a small move somewhat complex.

Bringing more digital payments power to parking can sometimes be – or at least seem like – an easier task, depending on ownership issues. No matter what, parking promises to carry a heavy load when it comes to making digital payments even more prominent in the lives of consumers residing in smart cities. So far, only 11 percent of “global public parking spaces are smart,” according to one report from late last year, but “market spending for smart parking products and services is expected to grow at a compound annual growth rate (CAGR) of 14 percent and surpass $3.8 billion by 2023.”

Parking Growth

In addition to parking, transportation-as-a-service providers and investors are still betting big on shared scooters (and bikes), even as some city residents and lawmakers push back on those instruments of last-mile human motion. As shown by new PYMNTS research, one key to making scooters an even more important part of cities – and smart city efforts – is offering consumers a variety of payment options, even if that means using tools such as QR codes. That holds especially true for cities in Asia.

Payments have another, perhaps subtler, role in the ongoing rise of the smart cities and their prospects for success, according to some observers and analysts. Smart cities will operate not so much on technology as on the data that runs, guides and governs that technology, whether that means its deployment or day-to-day use. And when it comes to data, there is much more involved than just collecting it.

“Payments data is, of course, affected by some of the same issues that have blighted previous smart city data analysis, because people can only spend money on the things that already exist,” reads one recent overview of the issue. “But one big difference of payments data is that it has a clear elective component.”

Just consider it this way: “Credit cards, mobile wallets and pre-paid cards all have very different demographics and usage patterns, so understanding who used what, when and what for can be a powerful tool in planning future services, rather than simply relying passively on monitoring of choices made from default options.”

No doubt the digital payment choices that city residents make over time will help “city developers … tailor their services in accordance with the preferences and characteristics of those consumers, adding another contextual layer to the crucial insight of the city’s inhabitants,” the analysis said.

All of this may seem obvious, but that doesn’t mean any of it will be easy. But rest assured that when it comes to smart cities, payments will have a big seat at the main planning table one way or another.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Wirecard Files Suit Against FT Following Investigative News Reports

German financial and payments company Wirecard has filed a lawsuit against the Financial Times for a series of articles the news organization wrote alleging misconduct and fraud in its accounting, Reuters reported.

The suit was filed on Thursday (March 28) at the Munich regional court in Germany, and named both the FT and the reporter who wrote the stories, Dan McCrum. Wirecard would seek compensation if the suit is successful.

“Our objective is to seek a halt to the incorrect use of business secrets for the purposes of reporting, as well as damages,” Wirecard said in a statement.

The basis of the articles was a whistleblower at Wirecard who said the company’s Singapore office was engaged in faulty accounting. After the articles came out, Wirecard’s value tanked and the company lost billions in value. Singapore police also started an investigation.

The company fired back in response to FT’s articles, saying the reporting was “false, inaccurate, misleading and defamatory.”

On Monday (March 25), Wirecard said an outside investigation by law firm Rajah & Tann found that the office in Singapore might have committed some crimes, but that the German office wasn’t part of it.

“The review … did not reveal findings of criminality in respect of the headquarters of Wirecard,” the company said. “Criminal liability may, however, be attributable to individual local employees in Singapore, according to local law.”

As Wirecard pointed out, “The independent review had no findings of round-tripping or corruption.” The company’s shares climbed 30 percent on the news of the report.

“This underpins our view that the whole negative stance from FT was exaggerated, and once more created a strong buying opportunity for fundamental investors,” said Hauck & Aufhaeuser Analyst Robin Brass about the investigation.

Wirecard plans to delay the release of its 2018 annual report until April 25 in order to add the law firm’s account.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

TCH Releases Business Principles, Adds Seats To RTP Committee

The Clearing House (TCH), which operates the RTP Business Committee, has added four seats to the committee to incorporate community bank and credit union representation, and also released a set of business principles to outline the RTP’s work.

TCH announced the news on Thursday (March 28), and said the four new representatives will meet with the RTP Business Committee monthly to help guide the committee and make sure it follows prudent risk management practices, as well as to establish rules.

“The RTP network was built for financial institutions of all sizes,” said Jim Aramanda, president and CEO of The Clearing House. “Having four new financial institutions at the table representing system users of different sizes will help ensure that the network fully incorporates the needs of all users as real-time payments become universally available throughout the country.”

The RTP network was created to help depository institutions with their needs.

“The RTP network has a single price for all participants regardless of size, with no volume discounts, no volume commitments and no monthly minimums,” TCH said. “The network’s technology is designed to support commercial innovation and is expected to lead to the development of a wave of products that will allow users to exchange non-payment messages, images and other value-added features.”

TCH also released a set of principles for the network to show how it will be managed and also specified pricing for the system.

“We are releasing the business principles for the RTP network after listening to the industry and responding to their requests for more information about the network,” said Jim Aramanda, president and CEO of TCH. “The RTP network was built for financial institutions of all sizes throughout the U.S. financial system, and our goal is to ensure that these depository institutions are provided with a clear understanding of the system, including its pricing and ongoing governance. In addition to the business principles, the RTP pricing schedule, operating and participation rules, message specifications, security requirements and more have been – and will continue to be – publicly available on TCH’s website.”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Citi Releases Annual Digital Money Index Report

Citi and the Imperial College Business School have released the latest Digital Money Index, a report that tracks 84 countries and their digital money readiness, Citi said in a news release.

The index is in its sixth year and compares collated data from five consecutive years. The report concluded that there’s been a 5.5 percent improvement in the digital money readiness for all countries tracked.

“The benefits of digital money have long been apparent and well-articulated by Citi. Increasingly, there is clear evidence that countries are recognizing the potential gains offered by digital money,” said Citi Global Head of Treasury and Trade Solutions Naveed Sultan. “We are delighted to be working with Imperial on the next edition of the index, and believe that this data and associated case studies provide truly valuable information and reflect Citi’s approach to collaborate with academia, policy makers and regulators to advance the financial infrastructure around the world to be compatible with today’s increasingly digital economy.”

Countries are grouped into four “clusters” that illustrate digital readiness: incipient, in-transition, materially ready and emerging. There have been improvements in every cluster, Citi said, but especially in the incipient and in-transition countries.

“The index has shown that countries at an earlier stage of readiness typically face challenges relating to lack of financial and communications infrastructure, as well as access to basic financial services,” said Sultan, who also chairs the advisory board for the Centre for Global Finance and Technology at Imperial College Business School, part of Imperial College London. “Those that are more mature face challenges relating to availability and adoption of digital money solutions.”

Of all the countries in the index, 18 have moved from one cluster to another in the last five years, which indicates an increase in digital readiness. The cluster shift means there are 50 percent more materially ready countries in 2019 and 20 percent less in the incipient cluster.

“For the first time in the Index’s six year history, we’ve been able to track changes across the time period, highlighting trends which are more cumulative than annual,” said Andrei Kirilenko, director of the Centre for Global Finance and Technology at Imperial College Business School. “This is reflective of how digital transformation actually works, while illustrating key bottlenecks. This information is tremendously valuable to policymakers from incipient and in-transition economies.”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Wells Fargo And Mastercard On Blockchain: Oversold?

Along any avenue of technology, there is hope … and there is hype … and then there is reality.

Blockchain has long been in the process of being divorced – operationally as well as conceptually – from its crypto connection.

The hope has been that as blockchain moves beyond bitcoin, the decentralized way of moving data, assets and communications would find a wide berth in business. Indeed, headlines have trumpeted blockchain as a way to trade bonds and stocks, send money and execute contracts, and yet…

A bit of cold water may have been splashed on the hype, as reported by CNBC: Executives from two firms with roots in financial services and payments noted at the FinTech Ideas Festival in San Francisco on Wednesday (March 27) that the technology has not delivered how some observers had expected. The idea of an immutable system of recordkeeping, of agreement and visibility between all parties in a transaction, should have the firepower to change any number of industries. That has been the conventional wisdom, anyway.

Investors seem sanguine, as financing in the sector from venture capital firms, as estimated by Autonomous Research, has topped $5.4 billion compared to $1.5 billion in 2017. PYMNTS’ own tracking of blockchain projects reported across any number of outlets, from news reports to trade journals and even interviews with executives in the space, has found no dearth of excitement, and plenty of one-off projects. But widespread adoption proves elusive.

And it seems that even holding patents does not necessarily translate into bullishness.

As noted by Tim Sloan, chief executive officer of Wells Fargo, “blockchain has been way oversold.” And separately, as stated by Mastercard Chief Executive Ajay Banga – whose firm, said CNBC, has the “third-most” blockchain patents – blockchain’s business model is “not proven.”

Interestingly, we note, these are not just observers. Banga and Sloan helm firms that have put money where their corporate mouths are, and have invested time and effort into developing and deploying blockchain. Sloan said that though the technology has been “interesting … it’s been slow to roll out.”

That assessment comes as the programs being put in place have shown limited adoption. Consider the example of the Wells pilot with a fellow financial institution, the Commonwealth Bank of Australia. The focus has been on trade activity – and has resulted in a single transaction.

“If you turned the clock back a few years ago, it should have completely changed the industry – that’s just not the way it works,” Sloan said. “Over time, I think it’ll have an impact.”

The Mastercard executive, Banga, said that though the card giant remains “deeply invested”  in blockchain, there still is a need where “a lot of this has to improve and change over time.” The use cases that could come in the future extend to supply chains and even countering counterfeiting efforts.

Banga’s and Sloan’s comments come in the wake of similarly reserved commentary from Cathy Bessant, operations head at Bank of America, who told CNBC earlier in the week that, even with 82 patents under Bank of America’s belt, “what I am is open-minded. In my private scoreboard, in the closet, I am bearish.” She went on to say that “I haven’t seen one [use case] that even scales beyond an individual or a small set of transactions. All of the big tech companies will come and say ‘blockchain, blockchain, blockchain.’ I say, ‘Show me the use case. You bring me the use case and I’ll try it.’”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

ICBA Bancard And MK Decision Team For Loan Approvals

ICBA Bancard, the payments services subsidiary of the Independent Community Bankers of America (ICBA), announced a new partnership with MK Decision (MK) for its online loan-origination system.

In a press release, ICBA Bancard said the partnership with MK Decision streamlines its credit card application process to make it easier for customers when shopping and applying for cards. “MK’s digital lending platform is a high-tech lending solution that reduces the decision-making process down to minutes, saving customers valuable time without sacrificing the exceptional service that they have come to expect from their local relationship banker,” said ICBA Bancard President and CEO Tina Giorgio in the press release. “Through this collaboration, ICBA Bancard continues to push the innovation envelope with solutions that are focused on delivering the very best products to community banks and their customers.”

ICBA said MK’s loan-origination system is mobile-optimized, ADA-compliant and paperless and features easy-to-use marketing pages that educate borrowers to improve the online credit shopping experience for users. ICBA noted that MK Decision also provides community banks with a database of criminals so the banks can scan for aliases, IP addresses and mailing addresses to prevent fraud. It also uses advanced technology integration with credit bureaus and other data providers to offer a better lender experience as well, noted the company in the press release.

“We are excited to partner with ICBA Bancard to deliver a safe, digitized lending experience that is as frictionless as possible for the customer, resulting in higher conversion rates for card issuers,” Har Rai Khalsa, co-founder and chief executive officer at MK Decision, said in the same press release. “Our mission — to stimulate local borrowing and local lending — is well aligned with ICBA Bancard and its community bank clients. We truly believe that we can help local economies, and community banks are a key part of that.”

MK Decision is one of eight emerging FinTech companies chosen for the ICBA ThinkTECH Accelerator program.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

ICBA Bancard And Urban FT Link Up For Prepaid Cards

ICBA Bancard, the payment services arm of the Independent Community Bankers of America (ICBA), has partnered with Urban FT, a New York-based software company, to bring prepaid cards to community banks, the companies said in a press release.

The prepaid card market is growing — it’s currently valued at $896 billion but it’s expected to reach $3.65 trillion by 2022. Growth is driven by internet access, eCommerce and an increased desire for cashless alternatives. The proliferation of prepaid cards is an opportunity for community banks to provide cashless services to customers.

“This is a tremendous opportunity for community banks to expand their suite of card services to meet the diverse payment preferences of their cardholders with limited cost and risk exposure,” ICBA Bancard President and CEO Tina Giorgio said. “We’re excited to partner with Urban FT, a leader and trusted provider in this space, as we bring innovative solutions to market that offer greater choice and convenience without sacrificing the standard of service for which community banks are known.”

The partnership will support a slew of Mastercard consumer and commercial prepaid cards, and it will have incentives like fuel rewards, Wi-Fi access and mobile phone insurance. Community banks offering the cards will also be able to use Urban FT’s remote deposit capture and its banking app.

St. Paul, Minn.-based Sunrise Banks, a $1.1 billion-asset community bank, is going to be the correspondent bank for the program and it will handle the card servicing and support, along with compliance issues and requirements.

“We know that developing innovative programs supported by the best technologies drives interest in these payment offerings,” said Urban FT Chief Growth Officer Hunter Wolfe. “Urban FT anticipates a long and collaborative partnership with ICBA Bancard as we work to empower community banks with new payment solutions and digital experiences that allow them to retain their role as the go-to source for their customers’ payment needs.”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

DocuSign Invests $15M In Seal Software For AI Contract Analysis

San Francisco-based DocuSign has invested $15 million in Seal Software, a contract discovery and analysis startup, to help with the development of artificial intelligence (AI) that can read and analyze contracts, according to reports.

The two companies have a previously existing partnership in which Seal’s technology is distributed through DocuSign’s platform extension program.

“We are thrilled by DocuSign’s confidence in Seal Software as a partner and now as a strategic investor, as we build the next generation of agreement discovery and analysis tools using artificial intelligence,” said Co-founder and CEO Ulf Zetterberg. “Working together, we will continue to unlock the full potential of all the agreements that are pervasive across every size and type of business.”

Seal’s technology works with DocuSign’s Total Search, which lets users locate and organize digital agreements with metadata, and search throughout them using natural language terms. It also helps to power DocuSign’s Intelligent Insights, which uses AI to extract important contract linchpins like warranty and indemnification.

The combined technologies could help customers pinpoint contract issues for renegotiation, which could result in cost savings, DocuSign noted.

“AI lets organizations analyze their agreements for hidden risks and opportunities in new ways,” said DocuSign Chief Product Officer Ron Hirson. “As we have continued to invest in adding intelligence to our suite of products, this investment in Seal’s discovery and analytics is just another step in making our Agreement Cloud offering smarter.”

DocuSign has been investing heavily in AI and machine learning technologies recently. It acquired intellectual property rights from machine learning startup Appuri in December of 2017, and bought text search and indexing startup SpringCM last year.

Seal has shown impressive numbers since it was founded in 2010 by Zetterberg and Co-founder Kevin Gidney, recently reporting 85 percent year-over-year growth. The company also raised $30 million from Toba Capital, which brought its total amount raised to $43 million.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Creating Content Management Support For A Still-Emerging Ecosystem

Seattle-based Jargon spent a lot of time in advance of its recent $1.8 million seed round trying to explain to investors what it wasn’t. The trouble with work in the voice ecosystem, Jargon Founder and CEO Milkana Brace told PYMNTS, is that venture capitalists and other investors already have a lot of ideas about what you do when you hit the doorway.

That becomes a problem when you don’t actually do the things that all VCs think you do: natural language processing, generation, speech recognition or machine translation services.

Brace told PYMNTS there is a good reason the firm decided to focus on something different: there’s too much competition from amazing tech companies that simply have more money and resources to invest there.

“We believe that the tech giants, including Google and Amazon, are in the best position to advance the state of the technologies [mentioned above], given their scale and level of investment,” she said.

But what Jargon can be, she said, is a successful collaborator with any of those firms — and if all goes according to plan, an accelerating agent in the voice ecosystem. Amazon’s Alexa Fund was one of the investors in Jargon’s seed round, joined by Ubiquity Ventures and Crosslink Capital. Jargon was also one of nine startups chosen by Amazon’s Alexa accelerator program nine months ago.

What Jargon does, according to Brace, is enable a content management system for firms building voice apps for smart assistants like Alexa or the Google assistant to manage and continually develop their voice apps over time.   Jargon’s offering is based around its software development kit (SDK) that deals with the fact that most voice apps are hard-coded — which means they are hard to change, customize or localize.

“So our SDK is a free and open-source tool box that lets developers easily separate the content of their voice app from its source code because it’s easier to modify it and localize for new markets,” Brace said.

While there are other firms working to develop content management tools, what she believes makes Jargon unique is that it does not come from a traditional app design background. Instead, the firm is voice-first, she noted, and voice is an unusual medium in many regards. There are considerations that simply don’t exist on mobile applications.

“To take a really simple example, voice assistants have to offer a variety of responses or it begins to feel very unnatural quickly,” she said. “That’s not a factor on a medium a consumer is reading — but it a big issue in early adoption if it is a medium the customer is talking to an expecting responses from. The SDK has built-in support for such variants.”

And that’s just the simple stuff.  The ways and areas that brands, advertising firms and other app creators want to control and optimize their content vary quite widely. Some, she explained, are going to optimize for discovery, others are going to want to support transactions, or make locally-linked offers to their consumers in real time.  Those kinds of functions, she noted, by nature need to be flexible to be useful, and things that are hard-coded into the app aren’t going to offer up that kind of flexibility.

“As we are coming out of fundraising, right now we are  focused on working closely with our customers who have a laundry list of needs and ideas on how they want to very finely tune their apps. And we are working with all kinds of brands and honestly this is just the beginning,” she said. “Voice is an emerging industry; we are expecting the needs of our customers to evolve rapidly. We built a flexible SDK because we are counting on it.”

And though that open-source SDK is free, the company offers specialty tools and management services for firms for a fee — which is how the service actually makes money.

The firm’s focus, apart from expanding its paying customer base, is building out support for frameworks beyond Google and Amazon home voice assistants. Those were the natural places to start, given their relative market dominance, but they are far from a stopping point — support for Siri and Bixby are on the agenda to be completed by the end of 2019.

Because, Brace said, while voice seems like an open field today, she and her firm are assuming that speed is going to be a telling advantage over the next 12 months, because the pace of development is quickening, not slackening.

“Voice assistants have seen customer adoption at higher rates than any other prior technology. We are far from close to having even uncovered all the applications for this  and there is a long, long way to go,” she said. “But the rate of progress is incredibly exciting, and it is exciting to be a part of it.”

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

TransferWise Formally Rolls Out PayNow Payments; Klarna Unveils Open Banking Platform

Welcome to The Axis, your late look at payments news from around the world. Coverage includes the formal rollout of payments via PayNow with the U.K.’s TransferWise. In addition, European payment provider Klarna has unveiled an Open Banking Platform, and GM Cabs is offering to take payments via Alipay to help serve consumers in Australia.

TransferWise, a FinTech firm in the U.K., now formally allows payments via PayNow after experimenting with the service, The Business Times reported. Through TransferWise, users can scan a quick-response (QR) code or enter a unique entity number of a company. As it stands, the FinTech allows payments such as bank transfers, debit cards and credit cards. TransferWise Lead Product Engineer Timothee Ledure said, according to the report, “When our customers told us they like PayNow for its speed and convenience, we added the implementation of PayNow to our engineering plans and worked to launch the feature as quickly as possible.”

And, also in Europe, payment provider Klarna has unveiled the rollout of an Open Banking platform, according to reports. The company said that a single Access to Account (XS2A) application programming interface (API) would pave the way for access to over 4,300 European banks. FinTechs, along with newer and established banks, will be able to create personalized offerings to meet the needs of European customers. Klarna Chief Technology Officer Koen Köppen said, according to the report, “Now in the midst of further change and transformation from the PSD2 legislation and steps towards European Open Banking, we can enable other FinTechs, banks and others to develop, test and bring new services and products to the market at a faster pace, through our platform and by integrating with our single API.”

In Australia, GM Cabs is offering to take payments via Alipay to help serve consumers from China, ITNews reported. As it stands, the solution was said to be rolled out to a fleet of more than 250 branded taxis for GM Cabs. The company’s payments are said to “underpin” taxi networks in addition to booking app Rydo per the report. George Mikahel of GM Cabs said, according to the report, “GM Cabs has provided services to the tourist and hotel markets for many years and with the growth of Chinese tourism we recognise the value in service that Alipay offers.” And, in February, it was reported that Alipay and Tourism Australia were working together on an experimental Sydney City Card program to market the city’s attractions to visitors from China.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Fourth-Quarter GDP Growth Was Revised Lower

In spite of the $1.5 trillion tax cuts put into place at the end of 2017 by President Donald Trump, the economy slowed more than anticipated at the end of 2018.

According to a report in TheStreet.com, citing the Commerce Department’s Bureau of Economic Analysis, gross domestic product grew at a seasonally adjusted 2.2 percent pace during the fourth quarter as compared with the third quarter. That was below the 2.6 percent increase initially reported and under the 3.4 percent rate of growth seen in the third quarter.

For all of 2019, economists polled by FactSet expect growth to be 2.4 percent, which would be lower than the 2.9 percent total growth for 2018, noted the report.

In a statement, the Bureau of Economic Analysis said, “The deceleration in real GDP growth in the fourth quarter reflected decelerations in private inventory investment, PCE and federal government spending, and a downturn in state and local government spending. These movements were partly offset by an upturn in exports and an acceleration in non-residential fixed investment. Imports increased less in the fourth quarter than in the third quarter.”

TheStreet.com noted that in the second quarter of last year, GDP growth jumped 4.2 percent as the tax cuts were put in place. Economists told the news outlet that many companies used the tax breaks to increase dividends to shareholders or to repurchase shares, enabling companies to see a short-term increase in earnings. The tax break did not go toward factories, technology or equipment.

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, told TheStreet.com that the slowdown in GDP growth shows the benefits from the tax cuts have ended and weren’t going to last long in the first place. The output for the fourth quarter was also reduced to 3 percent from 3.1 percent. The report did note that the federal government had said it would reach 3 percent annual growth for 2018.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Fundbox Strengthens Synchrony’s SMB Financing Position

B2B payments and finance company Fundbox is expanding its partnership with consumer financial services company Synchrony in a deal that will expand the latter’s position in small business funding.

In a press release issued on Thursday (March 28), Fundbox and Synchrony announced a collaboration that will enable Synchrony to link its small business customer base to financing by integrating Fundbox‘s artificial intelligence-powered business capital technology. The solution is geared toward merchants using the Synchrony Business Center, a holistic tool that helps merchants manage operations and implement financing solutions for their own customers.

Now, via the Fundbox integration, those same merchants can access capital themselves.

“At Fundbox, we have built our entire business experience around the needs of our customers, be they SMEs, B2B platforms, vendors or services like Synchrony,” said Fundbox CEO and Founder Eyal Shinar in a statement. “With the increased availability of business data, advances in machine learning and the growth of APIs to make integrations easier, Fundbox is bringing risk analysis and on-demand access to capital directly at the point of the B2B transaction.

“We are consumerizing B2B commerce in a way that no one else has done before, at a time when the B2B market needs it most,” he added.

In another statement, Synchrony Connect Senior Vice President Karen Nash Mirkin said the ability for merchant customers to seek a credit line “can make a huge difference in helping drive growth.”

In a recent interview with PYMNTS, Fundbox CBO Sebastian Rymarz gave additional details about the partnership that can link small businesses with up to $100,000 in revolving lines of business credit, which he said will address the “funding gap” that can prohibit small business growth.

“SMBs deserve more credit, and with more credit these firms can thrive,” he said, adding that Fundbox is able to integrate with bank accounts, invoicing, ERP and other kinds of data to obtain a holistic view of the small business and mitigate risk.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Bank Branches Embrace New Strategies as Closures Abound

The migration of consumers to online and mobile banking options, in addition to automation and other technological forces, has helped fuel thousands of bank branch closures over the past few years. However, banks have hardly given up on figuring out new ways to transform branch banking. A net decrease of 1,947 branches in the U.S. …Read More

Amazon To Create 800 New Jobs At Austin Tech Hub

Amazon announced on Thursday (March 28) that it is expanding its Austin Tech Hub, and will be creating 800 new tech jobs.

In a press release, Amazon said the jobs will be in the areas of software and hardware engineering, research science and cloud computing. Amazon said that since it opened its Austin Tech Hub, it has created more than 22,000 full-time jobs in Texas and has invested more than $7 billion in the state, including on infrastructure and compensation to workers.

“In the last four years, we have created more than 1,000 jobs in Austin,” said Terry Leeper, general manager of Amazon’s Austin Tech Hub, in the press release. “With a strong pool of technical talent in Austin and a dynamic quality of life, we are excited to continue to expand and create more opportunity in this vibrant city.”

The addition of jobs in Texas comes a few weeks after Amazon pulled out of creating its second headquarters, partly in New York City. Citing opposition from local lawmakers, Amazon said it wouldn’t move forward with its plans. Unlike local lawmakers in New York, Gary Farmer, chair of Opportunity Austin of the Austin Chamber of Commerce, said he was pleased that Amazon’s investment in Austin continues to grow. “This expanding presence is indicative of our region’s ability to provide creative and innovative talent. We’re proud to call Amazon a partner in our efforts to achieve regional prosperity,” he said in the press release.

The Austin Tech Hub is one of Amazon’s 17 North American tech hubs, housing more than 20,000 employees who are working on new products and services for the eCommerce giant. The Austin hub is focused on Amazon Web Services, Amazon Business, Amazon devices, video game design and advertising, among other initiatives. Amazon said it will expand into a new 145,000-square-foot Austin office in 2020.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Swedbank Fires CEO Amid Investor Revolt

Swedbank fired its chief executive officer as investigations into money laundering at the bank have expanded.

According to a report in Reuters, citing Swedbank, CEO Birgitte Bonnesen was let go ahead of the company’s annual shareholder meeting on Thursday (March 28). The move comes as investor criticism is increasing about the bank’s role in a series of money-laundering scandals coming from the Estonian branches of some major banks. Bonnesen has said in the past she’s confident the bank has strong anti-money laundering procedures in place and that the bank has reported any suspicious transactions to the proper authorities. Despite those assurances, investors have been growing increasingly critical about her handling of the scandal and were gearing up for a fight at the annual shareholder meeting. Ahead of the meeting, Swedbank’s biggest investors said they won’t give the CEO freedom from liability for the 2018 fiscal year, making it hard for her to keep her job.

“The developments during the past days have created an enormous pressure for the bank. Therefore, the board has decided to dismiss Birgitte Bonnesen from her position,” Swedbank Chairman Lars Idermark said on Thursday (March 28), according to the news report. Swedbank said current Chief Financial Officer Andres Karlsson has been named acting CEO and will hold the role until further notice. The bank said it has begun the process of finding a replacement, the report said.

The departure of Bonnesen comes in the same week Swedbank’s offices were raided and it was revealed that U.S. regulators are looking into the Baltic bank’s actions. The Financial Times reported Wednesday (March 27) that the New York State Department of Financial Services (DFS) alerted Swedbank in a letter in February that it was looking into seven different cases at the bank. The New York regulator says it has engaged in several inquiries related to Swedbank and its ties to the money laundering scandals that have broken out, including those at Danske Bank, Latvia’s ABLV, Cyprus’ FBME Bank and Lithuania’s Ukio Bank. It is also looking at its ties to Mossack Fonseca, the law firm at the heart of the Panama Papers.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our March 2019 AML/KYC Tracker Report 

Conversational AI Firm Kasisto Partners with U.A.E. Digital Bank Liv

United Arab Emirates-based digital bank Liv on Wednesday launched its virtual assistant Olivia, which was built by conversational AI company Kasisto. Olivia, a play on the bank’s name Liv, can check balances and give spending insights through text and the bank’s mobile app. Liv, a digital bank geared towards millennials in the U.A.E, has 210,000 …Read More

Ellevest raises $33M from Melinda Gates, Google's Eric Schmidt, PayPal

Ellevest, the digital investment platform for women, has said it raised $33 million in funding with a high-powered field of new investors, including Melinda Gates’ Pivotal Ventures, former Obama administration official Valerie Jarrett, former Google executive chairman Eric Schmidt and PayPal.

The round was led by Rethink Impact and PSP Growth, and also includes Elaine Wynn, co-founder of Wynn Resorts and Gingerbread Capital, founded by Linnea Roberts and Mastercard.

Returning investors include Aspect Ventures, Khosla Ventures, Morningstar, Astia Angels, Creditease Fintech Investment Fund and Ulu Ventures.

Funds will be used to invest in new technology and expand into new product categories, the announcement said.

“Today we bring in a group of rockstar investors deeply aligned with our mission,” Ellevest co-founder and CEO Sallie Krawcheck said in the announcement. “And its no coincidence many of them are unparalleled changemakers and advocates for women who understand being underinvested can cost a fortune over their lives.”


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