Financial Innovation Roundup e24: week of August 13 – 19, 2023
Here are my top 23 stories about financial services innovation from the past week.
#industryinsights
A handful of large deals prop up a slow week for the FinTech sector. A total of $789m was raised across 22 funding rounds, with the ten biggest deals pulling in $729m of that.?
The biggest deal of the week was an impressive $245m, which was secured by Teamshares, a US-based employee ownership company. This funding round included a $124m Series D round that was led by QED Investors. Teamshares buys small enterprises from retiring proprietors, ensuring that these businesses become 80% employee-owned within a span of two decades.
Notably, Canadian FinTech Finofo attracts $1.25m for its unique FX automation tool
Finofo, a Canadian-based financial technology start-up, has emerged with a vision to streamline the often complex world of foreign exchange (FX).
Today, the company, co-founded by Charles Maranda , Prateek Sodhi , and Malav Shah, has announced a groundbreaking platform that aims to provide businesses with a more transparent, efficient, and cost-effective method for handling cross-border transactions. Scroll all the way to the bottom for item #23 for more on the launch.
The company has secured an impressive $1.25m in pre-seed funding, with Motivate Venture Capital leading the round, according to a report from?TechCrunch . Notably, other participants include SaaS Venture Partners , Sweet Spot Capital, and Desjardins , a major player in the Canadian financial arena.
The Institute of International Finance (IIF) and Deloitte have been working together, speaking with public and private institutions, to better understand how these new ecosystems are impacting the industry. These ecosystems are evolving into dynamic networks who create value through complex models of collaboration, competition, and innovation.? We will look at this across several dimensions in a series of reports.
Digital transformation of financial services and moving from Open Banking to Open Data
In this report from the IIF and Deloitte we look at the impact of data policies and the importance of broadening the scope from Open Banking to Open Data, not just Open Finance. We explore how different data-sharing frameworks function as ecosystems with the potential to achieve goals for policymakers and market participants alike.?
Embedded finance: customer relationships and value web dynamics
Embedded finance is becoming an important strategic consideration for financial institutions (FIs). For this second report, we interviewed financial experts asking them a number of relevant questions for practitioners, policymakers, and consumers, including: What is embedded finance? Why has embedded finance flourished? How is it manifesting? And, where is the embedded finance trend headed?
?Both can be access from the link above.
#customerinsights
Shout-out here to the The Financial Brand . If you aren’t following, you should. What I like is A) They are a thought leader in what customers are looking for from financial services providers and B) their consumer needs content is evidence based – often with handy data points to back it up.
Just a couple examples from the past week here:
The micro-generation of Zillennials is distinct in their financial needs, despite being a mash-up of Millennials and Generation Z. They prioritize savings and crave guidance in managing their finances, building credit and handling debt. They’re also comfortable seeking such guidance from social media and artificial intelligence technology like ChatGPT. A study from Logica Research offers banks and credit unions insight on how to engage Zillennials as both customers and employees.
Mobile banking apps for small business customers have a long way to go before they meet the expectations of users. Keynova Group checked out the functionality of apps from 10 of the largest banks in the country — from giants like Bank of America and Wells Fargo to regionals like Huntington and PNC — to assess the areas where they are falling short. The research firm suggests smaller financial institutions have an opportunity to leapfrog their competitors. Here’s what Keynova says are the must-haves.
#artificialintelligence #ai
AI is the most effective method for improving anti-money laundering (AML) processes and efficiencies according to AML professionals, research from?Feedzai,? a leading provider of financial crime and risk management solutions.
Feedzai ’s?The State of Global Anti Money Laundering Compliance Report 2023?surveyed compliance professionals to discover what the biggest threats and opportunities are in the AML ecosystem. It found that 46% of AML professionals are concerned about increasingly sophisticated money laundering techniques, including generative AI. The threat from generative AI and linked technology is now the top challenge for AML professionals, overtaking regulation, cryptocurrency and blockchain, the top threats cited in 2022.??
Despite no longer occupying the top spot, crypto still remains front of mind for AML professionals. Over half (53%) of those surveyed said that the money laundering activities within their scope are predominantly linked to cryptocurrency transactions. Cryptocurrencies’ anonymous and decentralized nature is being exploited to conceal the origins of illicit funds, exacerbating the challenges in detection and monitoring.
Marqeta, a global modern card issuing platform, has revealed a groundbreaking AI solution for its customers.
Generative AI has swiftly risen to the forefront of technological innovation, and Marqeta has stepped up to harness its potential. With the prime aim to reduce time to value (TTV) for its patrons, the unveiling of Marqeta Docs AI is a significant move.
A pioneer in its field, Marqeta offers businesses ground-breaking embedded finance solutions that encompass various features, including virtual and physical card issuance, processing, digital banking, and more. Their platform stands out for providing embedded financial services solutions, promoting instantaneous revenue generation and bolstering customer loyalty.
Marqeta Docs AI serves as an AI-driven question-answer tool, built using OpenAI’s Large Language Models. This transformative tool allows customers to effortlessly sift through the Marqeta Docs site, providing them with quick solutions tailored to their individual use cases. It equips users with a rapid grasp of the platform’s vast offerings and intricacies surrounding payment solutions. Reflecting Marqeta’s commitment to continuous innovation, this tool facilitates a seamless integration with Marqeta’s APIs. Presently, Marqeta Docs AI is in its beta phase, with plans for wider availability in the upcoming quarter.
?#blockchain #crypto #cbdc?
Coinbase announced its Canadian expansion with a series of new offerings that demonstrate its commitment to Canada as a priority Go Deep market.
Through its partnership with Peoples Trust Company , part of Peoples Group, Coinbase is now providing access to Interac Corp. e-Transfers? to 100% of Canadian Coinbase users, making it secure and simpler than ever to move money in and out of your account. This will make cryptocurrencies more accessible to millions of Canadians. Interac availability was the most requested feature by Canadian users, and today’s news demonstrates Coinbase’s plan to build a platform that is for Canadians, by Canadians. Depositing funds to Coinbase using Interac is free and almost instant. In the last month, over 50% of deposits have been made through Interac e-transfer. Starting today, Canadian Coinbase users can also maximize the full potential of crypto with the best of Coinbase through membership with Coinbase One. Free for all users for 30 days, Canadians now have access to zero trading fees, boosted staking rewards, priority 24/7 support, and more.
These announcements are the latest of several commitments Coinbase has made to grow in Canada.
Customers will soon be able to directly access futures through Coinbase Financial Markets?
Regulation and transparency are critical and build confidence for individual customers and institutions, and access to a CFTC-regulated crypto derivatives market is essential to unlocking significant growth and enabling broader participation in the cryptoeconomy.? In September of 2021, Coinbase Financial Markets filed an application with the NFA to register as an FCM. Our team has worked with regulators since then to ensure we will comply with all the necessary regulations and that our FCM’s business model meets the CFTC’s customer protection requirements.
Coinbase Financial Markets believes this is a watershed moment to be able to bring regulated crypto derivatives products to US customers. Where regulations are clear and sensible, Coinbase Financial Markets and our affiliates will work with regulators to receive the authorizations needed to offer products that align with our purpose of using crypto to update the financial system to advance economic freedom and opportunity. We support this purpose by always seeking to build the most trusted and secure products and services.?
#digitalbanking
Zolve, a neobank for immigrants to the US, has teamed up with telecom-as-a-service platform Gigs to launch its own branded mobile phone plan service.
The Zolve app already offers new arrivals to the US a FDIC-insured bank account, and a high-limit credit card. Now, customers can also activate their phone plan in the Zolve app with just a few taps - bypassing the bureaucracy of providing an address, credit card, and social security number that often faces new arrivals. The firm says that by bundling financial services with a phone plan, it provides expats with two essential needs from one and the same app, ensuring a smooth start to life in the US.
Veteran-led Citizens Bank of Edmond publicly launched Roger, the only digital-first bank tailored to service members, under the leadership of President and CEO Jill Castilla.
Established in 1901 with $375 million in assets, Citizens Bank of Edmond is renowned for its community-focused banking and lending services. Inspired by her own experience, Castilla, a U.S. Army and Oklahoma National Guard veteran, spouse of an Army retiree, and a Blue Star mother, sought to identify ways to support service members and their families from day one.
“When I enlisted at 19, I had little access to my bank accounts and financial tools,” explained Castilla. “Working with Nymbus, we set out to make the transition into service easy with a digital-first approach for account set-up and management. America’s service members are strong, courageous and deserve a financial partner that will work alongside them as they build their future wealth.
In this groundbreaking move, Citizens Bank of Edmond has forged a strategic partnership with Nymbus, the frontrunner in next-generation digital banking solutions. This alliance is poised to redefine industry standards by focusing on creating an unparalleled digital banking experience for military service members. The collaboration underscores both parties' commitment to industry innovation and an accountable partnership that prioritizes the financial well-being of America's military community.
#digitalwealth ?#wealthtech
Conquest Planning Inc., a technology platform modernizing financial planning with customized and convenient advice, announced an integration with?Vancity, Canada's largest community credit union. With assets exceeding $34 billion, including assets under administration, Vancity is the first credit union to join forces with Conquest. As a result of this partnership, Conquest will integrate its cutting-edge digital financial planning tools into Vancity's services, potentially extending this valuable resource to its more than 560,000 members. This will further empower these individuals to take control of their financial futures.
The “Vancity Advice Plan” tool allows Vancity members to leverage Conquest’s software for the delivery of meaningful financial advice. Most notably, Vancity’s network of financial professionals can now use Conquest’s Strategic Advice Manager (SAM). Powered by artificial intelligence, SAM is a digital assistant that draws from every piece of member information in its system to perform thousands of complex calculations. In doing so, it can help to build flexible plans quickly and with a high degree of accuracy.
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“As a values-based financial co-operative, we place great importance on collaborating with organizations that share our commitment to being a financial force for change,” said Joe Reid (pronouns he/him) , VP of Wealth Management and Impact Investing at Vancity. “Introducing Conquest's intuitive financial planning software into our operations enables us to extend the personalized financial advice we offer free to our members.”
UK FinTech Growth Partners is pleased to announce that it will launch the FinTech Growth Fund, the first investment fund of its kind focussed on supporting growth stage FinTechs as they scale.
With backing for the initiative already secured from industry leaders Barclays, NatWest, Mastercard, London Stock Exchange Group and Peel Hunt, the FinTech Growth Fund will invest in UK FinTechs, predominantly between Series B and pre-IPO, to enable them to scale into world-class global organisations. The first deployment of capital into businesses is scheduled for Q4 2023 with a strong pipeline of opportunities already identified. The fund will look to undertake, on average, four to eight investments per year, with investments between ￡10 million and ￡100 million. The fund will make minority investments and all investments will be for equity and equity-linked securities.
Alongside the investment capital, the FinTech Growth Fund will provide strategic support to its portfolio companies to help them achieve their corporate ambitions, giving them access to an ecosystem of deep, relevant experience across FinTech, venture capital, and the wider financial services ecosystem.
#esg #sustainability
Validere, an emissions measurement, reporting, and verification (MRV) SaaS company, unveiled Carbon Hub for the Canadian market - a groundbreaking platform designed to reshape the landscape of environmental compliance and emissions management.
Carbon Hub addresses the complexities faced by companies operating in carbon-intensive industries, as they navigate through evolving environmental regulations and strive to reduce their carbon footprint. With Carbon Hub, businesses in Canada and the U.S. gain unparalleled access to streamlined regulatory reporting, real-time operational alerting, and advanced scenario modeling, fostering sustainable practices and driving environmental stewardship to new heights.?
Aspiration, a leading climate finance company, has partnered with Fareportal, a global travel technology company, to help travelers mitigate their carbon footprint when they book flights, hotel stays, and car reservations through Fareportal and their affiliates, including online travel agencies CheapOair and OneTravel.
Utilizing Aspiration's APIs and proprietary greenhouse gas emissions methodologies to estimate the carbon emissions of each transaction, Fareportal customers will soon be able to calculate their estimated carbon footprint for reserved flights, hotels and rental cars. Fareportal customers will then be offered the opportunity to reduce these emissions through Aspiration's third-party reforestation program.
"We're thrilled to begin offering this tracking technology to our partners at Fareportal, which will help their customers better understand their carbon footprint from travel," said?Olivia Albrecht, CEO of Aspiration. "Reducing travel isn't always practical, so providing a seamless option in their booking platform to mitigate emissions provides an important tool in our shared goal to reduce climate impact."
#financialwellness
Montreal-based Kaira Technologies announced a Proof of Concept (POC) with ATB Wealth, on LinkedIn. The POC will provide ATB Wealth employees with access to Kaira Technologies Financial Wellness and coaching platform. This will enable ATB Wealth to evaluate the app and AI coaching solution, while providing insight and recommendations to optimize financial wellness programs for their employees.
INVRS CEO Jennifer Cameron CPA CFA is seeking partners/sponsors for platform components like FinTrivia or FinEd. Reach out to Jen if Financial Literacy is important to you, and you want your brand to benefit from the positive emotional connection of Gamified Financial Education.
FinTrivia is our thrice daily dose of fun and engaging financially themed?#trivia .?FinEd is our deeper dive?#education ?pieces.?Playdough is our platform currency used to reward INVRSers for answering questions and polls, and voting on Investment Motions?, which are voteable, actionable investment ideas.
We use gamification and microlearning to deliver financial education the way young people want it - in a fun, social and collaborative framework. INVRS gamification system has three pillars: Learn, Earn and Compete.
Learn
FinTrivia: get your daily dose of fun and engaging financially themed trivia FinEd: take a deeper dive on financial education pieces
Earn
Playdough and Badges (Coming Soon!): platform rewards – earn rewards for engaging on the platform
Compete
FinQuests? (Coming Soon!): The learning journey culminates in FinQuests, which are challenges and competitions, that put INVRSers new skills to work.
#openbanking
By now, you're likely familiar with the concept of open banking. This idea enables banks and fintechs to exchange data and payment requests. One intriguing feature is VRP (Variable Recurring Payments). While the Brazilian Open Banking agenda doesn't explicitly touch on VRP, the country's central bank intends to introduce it through another one-off it's open finance instruments: PIX, the local peer-to-peer payment solution akin to the US FedNow and India's UPI. This initiative, referred to as "PIX Automático" (Automatic PIX), is set to launch as early as April 2024.
The British government is planning to look into harnessing open banking for online payments for public services.
The integration of open banking would allow people to use their own banking apps directly to pay for government services.?
Amanda Dahl, deputy director of Government Digital Services, shared the update in a blog post, where she outlined the development of digital products for GOV.UK .
The site currently offers Apple Pay and Google Pay for central government digital services, but will be extending mobile wallet payments to local authority services for charges such as the Clean Air Zone.
#payments #spending #borrowing
We’re excited to announce that Just Eat Pay, the flexible employee benefits solution, now includes the option to have virtual Just Eat Pay cards!?
Designed for a hybrid workforce, a virtual Just Eat Pay card allows companies to provide parity of benefits to their teams wherever they're working. It's a fully flexible solution, meaning that you can add it to your Apple Wallet/Google Wallet and order?food and drinks on the go from a wide variety of restaurants and eateries.
The virtual card is perfect for companies with employees in many different locations, as it instantly allows team members to access their balance after they add it to their digital wallets.
Checkout finance platform, Deko, has announced a milestone BNPLaaS partnership with Aero Commerce, bolstering the e-commerce platform's offering and technological capabilities.
Among the checkout finance capabilities available through this partnership, Aero has directly integrated Deko's Newpay product, a digital credit account, that improves conversion rates and encourages repeat spending. Aero is a powerful e-commerce platform, designed with the evolving needs of retailers in mind. Aero Commerce works closely with a carefully curated network of over 150 specialist e-commerce development agencies, who craft online stores for ambitious retailers. Richard Bendelow, CEO of Aero Commerce, said: “We’re pleased to have partnered with Deko to deliver the Newpay product to our platform. The flexibility of the Newpay digital credit account, seamlessly integrated into our checkout, helps drive conversions on higher value baskets and we’ve already had numerous requests to integrate the solution”
#smallbusinessbanking
British digital bank Starling is planning its first expansion outside of Europe, targeting a move into Asia-Pacific, CNBC has learned.
The digital lender, which is backed by Goldman Sachs, is in talks with an Asian bank about taking its Engine banking-as-a-service platform into a country in Asia, Nick Drewett, chief commercial officer at Starling, told CNBC.?
Starling declined to identify the country or Asian bank, given the confidentiality of the arrangement. However, Drewett said the bank Starling is partnering would use the company’s software to launch small and medium-sized enterprise (SME) accounts, rather than to provide personal banking services.
South Africa's leading fintech, Lula, which rebranded from Lulalend, is now offering an array of first-to-market services poised to redefine the SME banking landscape thereby taking a giant leap forward in its mission to support SMEs.
The local SME-focused fintech said it has now evolved into Lula, a one-stop, cash-flow management and business banking solution. The rebranding marks a critical evolution from a funding provider to an 'all in one cash flow management platform designed to simplify financial management for SMEs.
Trevor Gosling , Lula’s Co-founder, and CEO said that guided by their core belief that SMEs were the lifeblood of the South African economy, Lula aimed to broaden its service offering to solve even more of the most common financial challenges small businesses face. “To this end, we’re launching a business banking account tailor made for SMEs, complete with advanced financial management capabilities - such as an AI-driven cash flow analysis tool to enable better decision-making,” Gosling said.
Canadian currency risk management startup?Finofo?launched publicly today. The company, headquartered in Calgary, Alberta, calls its platform an “all-in-one” solution for businesses’ financial needs and has unveiled tools for cross-border payments as its first offering.
In an?extended blog post, Finofo co-founder Prateek Sodhi announced the company’s launch and its mission to help businesses manage currency risk. Sodhi underscored the challenge of managing currency risk, calling it a “multifaceted task that requires specialized talent in finance.” He noted that larger companies can often afford to hire the specialized talent required to effectively manage currency risk. However, Sodhi said, “most regular businesses are left grappling with these complexities with a team consisting mainly of trained accountants and corporate finance specialists.”
To this end, Finofo has built a digital platform that leverages advanced algorithms to examine the intricacies of currency fluctuations for individual businesses. If currency fluctuations become an issue, the platform quantifies the value of the risk. This enables the platform to develop tools and strategies, specific to individual businesses and their financial condition, to manage this risk.
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11 个月Thanks for sharing!
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1 年Superb Matt, Thank you. More to come shortly making a positive difference in everyday people life, companies, investors, and communities.
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