Hot on the heels of its latest Crowdcube funding campaign, Clim8 Invest has appointed three prominent figures to its investment committee, including James Millard of specialist global insurer Hiscox.
The provider of a digital consumer platform focused on climate-crisis tackling investments has also added Vivian Bertseka and Bart Dujczynski to its investment committee, after smashing its £400,000 Crowdcube funding target and as it begins to onboard more than 10,000 people to its sustainable investment app.
Clim8 allows investors to create a curated portfolio of publicly listed companies, covering sectors such as clean energy, clean technology, sustainable food, smart mobility and recycling. It aims to launch in the next few months.
Its three new appointments have a wealth of investment experience between them, along with renewable energy and cleantech expertise.
Millard is chief investment officer of Hiscox and the former head of multi-manager strategies at Aberdeen Standard Investments. where he was responsible for more than £27 billion of client assets.
Bertseka is a former director of Generation Investment Management, a sustainable investing firm co-founded by Al Gore, which manages more than $25 billion of assets in public and private funds.
Dujczynski, a renewable energy and cleantech expert who was previously chief financial officer of Polenergia. Poland’s largest listed independent renewables utility, and an investment professional at Kulczyk Investments, Oaktree Capital and Rothschilds.
Bertseka commented on her appointment: “Clim8 is addressing an enormous opportunity and it’s coming to market just at the right time to provide a product that solves a very big issue. Investing behind environmental priorities is not easy; it’s actually very hard to do. What Clim8 has that is differentiating is an experienced team that works to actively help manage clients’ money.”
Duncan Grierson, founder and chief executive officer of Clim8, said, “We’re really excited to have James, Vivian and Bart on our investment committee. They each have different and very relevant experience for Clim8, with deep expertise in large scale fund management, in sustainability investing and in renewable energy and cleantech. They are a fantastic asset to our investment team.”
CUNA Mutual Group has acquired digital lending platform provider CuneXus.
The acquisition of California-based CuneXus, whose one-click pre-approved lending platform serves banks and credit unions, marks a continuation of CUNA Mutual Group’s journey “into a more diverse, digital-first world”, according to president and chief executive officer Robert Trunzo.
He continued: “Our company is committed to using technology to enhance consumers’ access to financial solutions that work for them and create a more equitable financial system and society. This is a top priority for all of our core businesses.”
CUNA Mutual Group invested in CuneXus in 2017 through its venture capital arm, CMFG Ventures. The terms of the acquisition were not disclosed.
CuneXus, which works with more than 140 financial institutions, enables them to offer pre-approved, ‘click-to-accept’ consumer loans to customers where and when they need them.
The platform uses a combination of a bank’s or credit union’s customer information and lending criteria, as well as customer credit history, behaviour and location to identify the best potential loan offers for consumers.
Wisconsin-based CUNA Mutual Group provides retirement plans services and insurance products to businesses and credit union members.
Trunzo said: “CuneXus is on a strong growth trajectory, and adding their expertise and product solution to our company portfolio allows us to maximise its growth potential and enhance our long-standing efforts to make a brighter financial future accessible to everyone.”
Dave Buerger, chief executive officer of CuneXus, said: “We are genuinely excited to join the CUNA Mutual Group family. Our capabilities and culture align very well, and we believe we can greatly enhance CUNA Mutual Group’s digital evolution in the lending space.”
Here’s why you should register for access to the exclusive stream:
There is no cost or barrier to stream. Everyone in the fintech sector can watch it.
It’s a celebration during a remarkably tough time, so put your tuxedos or ball gowns on and have a drink with the entire sector!
Show your support for your business, colleagues and clients.
Be seen. While you’re watching the broadcast, use #UKFTAwards across social media to engage with your peers.
Find out if you, your team, your business or your clients have won an award!
Watch it on your smartphone, laptop or smart TV, wherever you like (shout outs on social media for the best examples!).
Fintech deserves to be recognised with an unrivalled production. It would have been easy to cancel the 2020 awards in light of, well, 2020, but digital innovation within financial services is crucial to consumers and businesses, and highlighting and rewarding best practice will contribute to its continued success.
When you do register for the UK FinTech Awards 2020, you’ll be sent access information and a password during the week of the event, along with regular reminders so you don’t miss the opportunity to discover the UK fintech champions of 2020, and learn how they are delivering such important products and services in these difficult times.
US-based challenger bank Greenwood has raised $3 million in seed funding from private investors to launch the first digital banking platform for Black and Latinx people and business owners.
Greenwood was founded by civil rights legend and former Atlanta mayor and ambassador to the United Nations Andrew J Young, and Michael Render, also known as Killer Mike, a rapper and activist in Black financial empowerment. Its third co-founder, Ryan Glover, who launched Bounce TV network, serves as its chairman.
The Greenwood name pays homage to ‘Black Wall Street’, a part of the Greenwood district in Tulsa, Oklahoma during the early 20th century that served as a centre of African American enterprise, entertainment, skills, wealth and investment capital. It was destroyed during the 1921 Tulsa race massacre.
Explaining why launching Greenwood to serve Black and Latinx people and business owners was necessary, Render said: “Today, a dollar circulates for 20 days in the white community but only six hours in the Black community.”
“Moreover, a Black person is twice as likely as a white person to be denied a mortgage. This lack of fairness in the financial system is why we created Greenwood.”
“It’s no secret that traditional banks have failed the Black and Latinx community,” continued Glover. “We needed to create a new financial platform that understands our history and our needs going forward, a banking platform built by us and for us, a platform that helps us build a stronger future for our communities.”
“This is our time to take back control of our lives and our financial future. That is why we launched Greenwood, modern banking for the culture.”
Greenwood’s initial products are savings and spending accounts that come with a black metal debit card for customers who sign up by the end of the year.
Advanced features such as Apple, Samsung, and Google Pay, virtual debit cards, peer-to-peer transfers, mobile check deposits, and free ATM usage in more than 30,000 US locations are offered with no hidden fees.
Greenwood also plans to work with brick and mortar minority-owned banks to provide deposits to help strengthen historically black banks.
Young said: “The work that we did in the civil rights movement wasn’t just about being able to sit at the counter. It was also about being able to own the restaurant. We have the skills, talent and energy to compete anywhere in the world, but to grow the economy, it has to be based on the spirit of the universe and not the greed of the universe.”
“Killer Mike, Ryan and I are launching Greenwood to continue this work of empowering black and brown people to have economic opportunity.”
Greenwood also committed to providing five free meals to a family in need for every customer sign-up, a donation to one of several charities serving education, fighting hunger and supporting civil rights for every swipe of its debit card, and a $10,000 grant every month to a Black or Latinx small business owner that is a customer.
Insurtech company Cover Genius has raised A$15 million as it expands its product suite and partner network globally.
The funding announcement comes as the company launches its product and parcel insurance products on Shopee Thailand.
Within the last month, Cover Genius has successfully integrated commercial, shipping and product insurance for six global ecommerce platforms, including Tile and Wayfair.
The latest funding round, led by King River Capital, supplemented by a loan from Leap Capital, is aimed at supporting Cover Genius integrations with significant names in technology and ecommerce across South East Asia, India, the US and Europe.
Angus McDonald, chief executive officer and co-founder of Cover Genius, said the latest funding round, backed by the company’s existing shareholder group, showed continued investor support for its international expansion plans.
McDonald said: “Our global partner network is rapidly growing and this recent raise will support the ongoing development of high volumes of strategic partnership deals, across a broad range of insurance lines, verticals and geographies.”
Commenting on how customer adoption of insurance has increased dramatically in recent times with the surge to online shopping, McDonald said: “Customers want to protect their purchases, big or small, and given the option many will take insurance cover at the point of sale from their favourite online brands.”
“The confidence this gives customers is driving an increase in purchase volume with 32% of customers happy to buy and spend more if offered insurance. Our partners are certainly ahead of the curve and can see the value of insurance not only to their customers, but also their business.”
Chris Barter, partner at King River Capital, continued: “It’s no surprise that many businesses are looking at partnerships and integrations that can help grow their business in these challenging times. Cover Genius has a long history of actively contributing to the growth and prosperity of some of the world’s biggest ecommerce brands and we are excited to see them expand so quickly into new territories and verticals.”
UK-headquartered fintech company Revolut is using the infrastructure of Fireblocks to support the introduction of new crypto services for its 13 million retail customers.
Revolut already provides access to cryptocurrencies such as Bitcoin, Ether and Stellar but is in need of a secure platform that allows digital assets to be transferred outside of its own app.
Fireblocks provides a platform and secure infrastructure for digital asset transfers. Its founders launched the company after working on the investigation into the 2017 hacking of four South Korean exchanges and theft of $200 million in Bitcoin.
Revolut has rapidly expanded since its launch in 2015 and is now worth $5.5 billion. It offers features and services such as salary advance, instant peer-to-peer payments, and budgeting controls.
Its user base of more than 13 million is making more than 100 million transactions per month, suggesting there is significant room for growth and the addition of new services.
Revolut chose Fireblocks to support its introduction of new crypto services because the platform gives the fintech company “a competitive edge over other financial applications”.
Ed Cooper, head of crypto at Revolut, said: “[Fireblocks] enables us to rapidly add more advanced crypto features as the space continues to evolve at breakneck speed.”
Streamlining liquidity settlements through its network guarantees an excellent price for Revolut users while reducing counterparty risk, according to Fireblocks.
Fireblocks’s MPC-based wallet infrastructure and network also make it possible for Revolut to add additional product lines and retail-facing capabilities, bringing more traditional banking services alongside crypto to the platform.
With Fireblocks support, Revolut can efficiently scale the framework of its crypto services by streamlining storage, liquidity access, and settlements, while maintaining governance and compliance.
Fireblocks revealed that Revolut was its 100th customer. The platform was backed with $16 million in series A funding when it launched in 2019.
Other customers are based in New York City, Tel Aviv, Hong Kong, Singapore, London, Berlin and Paris.
The UK Financial Conduct Authority has banned the sale of crypto-derivatives to retail customers.
The financial services regulator in the UK considers these products to be “ill-suited for retail consumers due to the harm they pose”.
Among the reasons provided for the ban, the UK FCA said crypto-derivatives have no reliable basis for valuation because of the inherent nature of the underlying assets.
There is also a prevalence of market abuse and financial crime in the secondary market, extreme volatility in cryptoasset price movements, inadequate understanding of the assets among retail customers, and a lack of a legitimate need for them to invest in these products.
The ban, scheduled to come into effect on 6 January 2021, prohibits the sale, marketing and distribution to all retail consumers of any derivatives (contracts for difference, options and futures) and exchange-traded notes that reference unregulated transferable cryptoassets by firms acting in, or from, the UK.
The UK FCA estimates that retail consumers will save around £53 million from the ban on crypto-derivatives.
Sheldon Mills, interim executive director of strategy and competition at the UK FCA, said: “This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.”
“Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives. We have evidence of this happening on a significant scale. The ban provides an appropriate level of protection.”
The UK FinTech Awards 2020 ceremony is moving online and will be broadcast on 17 November, exclusively via ukfintechawards.co.uk at 7pm.
The Covid-19 pandemic is demanding innovation from everyone as we navigate this new normal—and the UK FinTech Awards is no exception.
As it remains unsafe to hold the in-person event scheduled for 27 October, the awards ceremony will be broadcast on 17 November.
All you have to do to watch the ceremony on 17 November is register here. That’s it! You’ll receive access information and a password, along with regular reminders so you don’t miss the opportunity to discover the UK fintech champions of 2020, and learn how they are innovating in these difficult times.
Why don’t you take a moment to peruse the shortlist, and find out who this year’s finalists and most innovative financial services technology companies and developers are?
You’ll be able to stream the awards via your desktop, laptop and mobile devices. Or you could cast the ceremony to your smart TV as you sit back and find out whether you or a colleague has brought home the gold.
The independent panel of judges, led by Steve Harper of Invest Northern Ireland, met earlier this year to assemble the shortlist of finalists, all of which deserve special credit for finding the time to enter and seek recognition for all of their hard work.
Japanese electronics conglomerate NEC has struck a deal to buy Switzerland-based Avaloq, a provider of digital banking solutions, core banking software and wealth management technology, for $2.2 billion.
Warburg Pincus owns a 45% stake in the core banking software company, with the rest owned by Avaloq’s founder and employees.
Following completion of the acquisition by April 2021, Avaloq will continue to operate as its own entity, headquartered in Switzerland.
Avaloq represents an entry into fintech for NEC. The conglomerate is acquiring a proven provider of cloud solutions for banks and wealth managers around the globe, with more than 30 years of experience under its belt.
NEC has ambitions to build ‘smart cities’ and is investing in research and development for biometrics, blockchain and artificial intelligence technologies, in order to take advantage of digitisation and big data transformations around the world.
The conglomerate believes Avaloq has the potential to complement this work by democratising wealth management and making asset classes and advice-led banking services available to mass affluent investors, which represent a highly attractive segment of new clients for private banks and wealth managers.
Juerg Hunziker, chief executive officer of Avaloq, said of the acquisition: “Due to very similar values of professionalism, reliability, quality and excellent service for clients with a focus on precision, we firmly believe that this partnership will be a successful one for employees, clients as well as other stakeholders.”
Francisco Fernandez, founder and chairman of Avaloq, added: “Talking to NEC’s top managers, it became clear to me that they share my ambition for Avaloq to continue to shape the future of the financial industry by continuing to invest heavily in R&D.”
Takashi Niino, president and chief executive officer of NEC Corporation, said: “NEC strongly believes in the importance of safety and security around financial institutions, which is absolutely crucial for sustainable prosperity and digital inclusion. Avaloq is a recognised global leader in their field, and their compelling offering is expected to complement our current solutions. NEC aims to further expand its business in the digital government and digital finance areas, by globally developing SaaS and BPaaS business models that utilise software and technologies from throughout the NEC Group, including Avaloq’s.”
Clim8 Invest, the digital consumer platform focused on climate-crisis tackling investments, has launched a Crowdcube funding campaign and already smashed its £400,000 target.
The new funding round builds on the £2 million that UK-based Clim8 raised earlier this year, which included an investment from a venture capital fund backed by the British Business Bank, and aims to capitalise on an increased interest in impact investing.
At the time of writing, Clim8 had already raised more than £550,000 from the Crowdcube funding campaign, with 29 days left to run.
Duncan Grierson, founder and chief executive officer of Clim8, said: “This year we’ve seen a dramatic increase in interest in climate change and impact investing. Due in part to Covid, people are more aware of their immediate environment, the clean air, and have gained clarity on the things that are most important to them. We are doubling down to make the most of this momentum.”
He continued: “Our mission at Clim8 is to raise awareness of the sustainable options available and empower more people to make the best choice for themselves and for the planet. This funding round will enable us to spread our message and also fund further product development. Our community has grown fast to over 10,000 people and we want to reach many more.”
Clim8 has started onboarding users from its waitlist and will launch the platform officially this autumn.
Mike Barry, former head of sustainability at M&S and a Clim8 adviser and Investor, said: “We need a new economy. One that works for everybody. And that’s what Clim8 does. It empowers people to be part of the economic upside of change and build a better future. One that’s low carbon, fair, equitable, and commits to wellbeing.”
UK-based fintech company B-North has raised a further £1 million in funding as it moves closer to obtaining regulatory approval to become a lending bank to small- and medium-sized enterprises (SMEs).
The £1 million in funding, from Growth Capital Ventures (GCV), is a part of the fintech company’s £20 million series A round designed to give B-North the necessary capital to finalise its banking licence process.
B-North plans to deliver loans of between £500,000 and £5 million to UK SMEs. Its business is built on the premise of operating regional ‘lending pods’, which include underwriters, valuers, and account managers, across the UK to facilitate a borrowing experience and to develop face-to-face relationships with growing businesses and the brokers that support them.
Teamed with the latest in cloud-based technology, B-North aims to deliver finance up to 10x faster than the market standard.
Jonathan Thompson, chief executive officer of B-North, commented: “We are using this ‘bridge’ round to extend our cash runway and enable us to complete our Series A fundraising as efficiently as possible in the coming months, at which point we will bring the business to market.”
“The last couple of years have seen us painstakingly bring together the different, important elements required to deliver fast, efficient lending to the UK’s SMEs. We are very much ready to go and are excited to get out there and start helping businesses realise their ambitions.”
Craig Peterson, co-founder and chief operating officer of GCV, said: “This fundraise has created a rare and attractive opportunity to own a stake in a business that’s about to bring to market a technology-driven UK bank focused on providing finance to scale-ups and SMEs.”
“The levelling up of the UK economy simply cannot be achieved in the current financial landscape and I am very confident that B-North and its unique regional bank model will be an important addition to the supply side of credit to UK SMEs.”
“Getting more funds to high-growth SMEs will be vital as the UK attempts to reinvigorate an economy that has been damaged by the COVID-19 pandemic. SMEs account for around 60% of private sector employment and have been the major driver of job growth over the past ten years.”
UK-based regtech company Acin has raised $12 million in series A funding to spearhead efforts to create a complete front-to-back-office solution to assess and manage operational and non-financial risks.
European software-as-a-service investor Notion Capital led the $12 million funding round and will work closely with Acin to drive rapid growth. Fitch Ventures, the investment arm of US-based ratings agency Fitch, supported the round.
Acin is a data and knowledge-sharing network focused on quantifying, standardising and digitising operational risk.
Its cloud-based Terminal solution digitises non-financial risk management for financial services organisations, providing standardised, industry-wide inventories. Acin has 14 tier-one member banks, including Société Générale, Credit Suisse and Standard Chartered, in its network.
The series A funding will be used to enhance Terminal with additional inventories of risks and controls, software extensions, and integrated benchmarking.
Acin also plans to expand its solution into further sectors beyond financial services over time.
The regtech company’s platform is “addressing one of the largest ‘white space’ opportunities in the overall risk landscape”, according to Stephen Chandler, managing partner at new investor Notion.
Chandler said: “Numerous billion-dollar tech companies have been created in market and credit risk but operational risk remains under-served, with static data and antiquated processes and systems.”
“We at Notion are delighted to be supporting them on their journey to define and lead this category.”
Paul Ford, chief executive officer and founder of Acin, said: “Notion is the perfect partner for Acin, as they share our belief in the market opportunity and in the value of our solution. They have a wealth of experience and connections, and we’re extremely excited about working with them to realise our potential.”
He added: “To have Fitch invest in Acin is a testament to the importance of the opportunity we are addressing and a commitment to seeing it through—we are delighted to have their backing.”
Shea Wallon, managing director of Fitch Ventures, said: “We have been tracking Acin and talking to the team over the last 18 months—we have been impressed by both their client engagement and the dedicated focus they bring to the questions they are answering as they build their operating system. We are excited that Acin is the first European investment for Fitch Ventures.”
US-based open banking solutions provider Finicity has launched a new credit-decisioning product.
Finicity Lend provides banks, lenders and fintech developers with access to tools that enable their borrowers to directly permission data and insights into lending decisioning processes.
Leveraging the Finicity open banking platform’s data intelligence layer, Finicity Lend provides a new alternative data service, Cash Flow, that analyses financial account data, delivering a broad set of cash flow attributes and giving lenders more accurate insights into a small business or individual’s creditworthiness.
The new product also uses transaction and statement data services, as well as sources covering assets, income, employment and scoring attributes.
Finicity’s decision to position itself as a consumer reporting agency also ensures consumers have the ability to review, dispute, and correct any inaccurate information.
The open banking solutions provider says its new product addresses the need for more efficiency and accuracy, better risk management, real-time insights, and enhanced credit-decisioning.
Steve Smith, chief executive officer and co-founder of Finicity, said: “Our new Finicity Lend integrated solution set will complement the current credit rating system while leveraging the tremendous advantages of open banking to create an industry standard for assessing a borrower’s ability to manage a loan going forward.”
“Real-time, permissioned data from multiple financial accounts is the lifeblood of our secure open banking platform, and empowers consumers to make better financial decisions, to mitigate risk for lenders and can increase overall financial inclusion.”
Software and payments company SpotOn Transact has raised $60 million in series C funding.
Internet investment firm DST Global led the funding round, with participation from existing investors including Dragoneer Investment Group and Franklin Templeton.
The new funding comes on the heels of US-, Mexico- and Poland-based SpotOn’s series B funding round in March and reflects the company’s rapid growth over the last six months.
Focused on small- and medium-sized retail, services and restaurant businesses, SpotOn offers products specifically designed for each vertical, such as appointments, ecommerce, online ordering and reservation management, as well as marketing, website development, omnichannel payments and point-of-sale solutions.
“We’re excited to partner with the SpotOn founders and management team in their vision of empowering small businesses by offering a suite of integrated payments and software products at low transparent prices,” said Rahul Mehta, managing partner at DST Global.
“We’re very impressed with their quality of execution, product cadence and customer centric approach in these unprecedented times.”
Matt Hyman, co-founder of SpotOn, welcomed DST Global onboard as a new investor. He said: “SpotOn is committed to small- and medium-sized businesses by providing them with the tools they need to thrive in any climate.”
“We will continue to create innovative products and further our go-to-market approach to ensure merchants nationwide have access to the tools they need to run their businesses. This fundraise, and partnering with a firm like DST Global, allows us to accelerate our pursuit of that goal.”
Raiffeisen Bank International has launched a virtual branch service in partnership with US-based fintech company Moxtra.
RaiConnect features a full suite of collaborative modules and ePaper workflows, and is available as an app to RBI’s premium private individual and corporate clients.
Through RaiConnect, Raiffeisen Bank International customers can connect with their relationship managers, exchange documents, have video conversations, and receive information via screen sharing.
Moxtra participated in Raiffeisen Bank International’s global fintech partnership programme, the Elevator Lab, and ran a successful proof of concept with one of the financial services firm’s subsidiary banks. This success was the basis for the newly signed contract.
Its Customer Collaboration Platform allows companies to deliver a premiere service on digital channels under their own brand.
Moxtra allows the easy integration of external systems of record, including document management, customer relationship management and transaction management systems. The fintech company also provides sophisticated relationship management capabilities.
RaiConnect is already available in Bosnia and Herzegovina, Bulgaria, Hungary, Kosovo and Albania. The app is set to become available in Austria, Romania, Belarus and Croatia soon.
Zsofia Jokai, RaiConnect product owner at Raiffeisen Bank International, commented: “[The] RaiConnect app brings to our premium and corporate clients a new possibility to get remote, ongoing support and the high-touch service that they are used to getting when visiting our bank locations. As of now, they can do this conveniently and directly via their smartphones.”
Karrtik Rao of Moxtra said: “With RaiConnect, we partnered with Raiffeisen Bank International to create a ‘virtual branch’ where RBI’s premium clients can receive the quality, timely service that they’ve come to expect from Raiffeisen Bank—at their fingertips.”
Santander has spun out Innoventures and allocated another $200 million to its newly rebranded fintech venture capital arm.
Santander Innoventures will be known as Mouro Capital going forward and managed autonomously. With $400 million allocated to the fintech venture capital firm, it will aim to lead funding rounds with initial investments of up to $15 million.
Launched in 2014 with an initial $100 million in capital, increasing to $200 million two years later, Santander Innoventures has invested in 36 startups in Europe and the Americas.
Santander’s venture capital fund was an early investor in fintech companies that have since reached unicorn status, including such as Ripple, Tradeshift and Upgrade. It has already had some noteworthy realisations, including, for example, the sale of iZettle to PayPal in 2018 for $2 billion, and Kabbage last month.
The venture capital fund has delivered strong financial returns, with an internal rate of returns (IRR) in the 25 to 35% range since inception in 2014 and an approximate 1.75x cash-on-cash multiple portfolio-wide, with older, more mature cohorts reaching above 3-4x cash-on-cash returns.
And as many as 70% of Mouro Capital’s current portfolio companies are working with Santander, demonstrating the added value of investing in emerging fintechs to an incumbent financial services organisation.
Ana Botín, executive chairman of Banco Santander, commented: “The creation of our fintech venture capital fund in 2014 has allowed Santander to lead the industry in implementing new technologies, including blockchain, offering better services to our customers as a result. Innoventures has almost doubled the cash invested, despite being relatively young for a venture capital fund.”
“Our goal is to build on that success, and by increasing our investment, while giving greater autonomy to the fund, we can be even more agile and further accelerate the digital transformation of the group.”
As Mouro Capital, the fund will continue to deploy capital across Europe and the Americas, primarily leading investment rounds with initial investments of up to $15 million and further follow-on reserves.
It will be led by general partner Manuel Silva Martínez, who joined Innoventures five years ago and has led the fund since 2018, and senior advisor Chris Gottschalk, who joined from Blumberg Capital in 2019.
Silva Martínez said: “By becoming more autonomous, we will gain in agility, attract entrepreneurial talent to the investment team, and further align to our entrepreneurs’ success. We are eager to keep on delivering strategic value to Santander, enhancing our partnership and working with our portfolio companies to support the bank in shaping fintech innovation.”
Netherlands-headquartered Backbase has deployed its digital-first banking platform at Vietnam’s Tien Phong Commercial Joint Stock Bank (TPBank).
The Backbase platform allows banks to design a unique banking digital banking experience made up of modular neo-banking capabilities for easy customisation.
TPBank has successfully revamped its mobile and internet banking system with the platform in nine months.
The introduction of comprehensive digital banking back-end services from Backbase has also enabled TPBank to shorten the time taken to develop new products and accelerate time-to-market.
It took TPBank 10 months to successfully migrate nearly three million customers to the new platform.
Nguyen Hung, chief executive officer of TPBank, said: “Backbase’s global expertise and extensive range of solutions has allowed TPBank to successfully navigate our digital transformation road map and accelerate the development of our digital banking products services for the next five to 10 years.”
“Our digital innovation journey that is being undertaken with Backbase has placed the people at the centre of our digital investment, with technology being the critical driver in transforming our bank and ensuring we stay ahead of the competition in the next digital banking revolution.”
Riddhi Dutta, regional head for ASEAN and India at Backbase, added: “Legacy channels and outdated core systems are cumbersome and is one of the factors which hinders banks from scaling at a pace that keeps up with evolving customer demands. Without completely overhauling a bank’s core which it has built over decades, Backbase’s breadth of integration mechanisms can support incumbent banks to execute strategic digital transformation projects that are tailored uniquely for them.”
“Now more so than ever, banks need to respond swiftly to greater customer expectations while implementing digital transformation with minimal disruptions to remain competitive in the current marketplace by implementing more efficient business models and delivering superior value to its customers.”
Belgium-based fintech company InvestSuite has partnered with Synechron to develop modern digital investment solutions.
Synechron, a global digital IT consultancy firm for financial services, will serve as a trusted integration partner to help deploy InvestSuite’s digital wealthtech products.
Those products form a suite of white-label investment solutions for financial institutions and include platforms for robo-advisory and self-execution trading, a portfolio optimiser, and a story-based investment statement to educate and engage retail investors.
Founded in 2018, the fintech company operates in seven countries, has 38 employees and has raised €6 million in funding.
The partnership will also see both companies collaborate on product development through Synechron’s FinLabs programme.
InvestSuite is already participating in the development of an environmental, social and governance investment advice service. The final product will be presented to the market later this year.
Dennis Martens, partnership manager and head of digital innovation and transformation at Synechron in the Netherlands, said: “We are excited to work together with InvestSuite on joint innovative wealthtech solutions for our clients.”
Chris Eichhorn, business development and partnership manager at InvestSuite, added: “Synechron is an ideal partner for us due to their dedicated focus on financial services, vast consulting and integration expertise as well as deep industry contacts.”
US-based Checkbook.io, an end-to-end online payments processor, has joined Visa’s fintech fast track programme.
Checkbook, founded by former Visa chief network architect PJ Gupta, provides virtual credit cards in the form of a unique 16-digit number with a pre-determined spending limit fit for one time use that would be sent to the recipient via email.
As a member of Visa’s fintech fast track programme, Checkbook will be able to integrate with Visa more quickly and leverage the reach, capabilities and security of VisaNet, Visa’s global payments network.
In May, Visa reported that its fast track programme had grown to more than 140 fintechs companies as interest in payments spiked internationally.
Gupta commented: “Visa has given Checkbook great impetus! To think that this was just an idea until six months back and we are now ready to go to market with a transformative product. Fast track helped us get up and running faster, and scale efficiently in this endeavour.”
Angelos, senior vice president and global head of fintech at Visa, said: “By joining Visa’s fast track program, exciting fintechs like Checkbook gain unprecedented access to Visa experts, technology, and resources. Fast track lets us provide new resources that rapidly growing companies need to scale with efficiency.”
Renters’ insurance provider Urban Jungle has gained a further £1.6 million of investment in its second major funding round of the year.
The UK-based insurtech company, which operates entirely online and uses artificial intelligence to lower risk and cut fraud, secured the investment from venture capital and private investors, bringing its total raised in 2020 to £4.1 million.
The insurtech company raised £2.5 million in March as lockdown measures were imposed in response to the outbreak of Covid-19.
Jimmy Williams (pictured), chief executive officer of Urban Jungle, said: “We wanted to raise more in the spring but, with lockdown restrictions pending, we had to close the round early. However, since then, the business has performed incredibly well and we are seeing opportunities for new products and new markets.”
The provider of home contents, building and contents, and tenants’ liability insurance has raised £7.8 million since its launch in 2016. Investors include former Prudential chief executive officer Rob Devey, Octopus Group chief executive officer Simon Rogerson and Funding Circle co-founder James Meekings. Devey joined Urban Jungle’s board as a non-executive director in December.
Following a significant period of growth, Urban Jungle now has more than 25,000 customers and 23 staff, and is growing at more than 20% per month.
Williams commented: “2020 has been a really tough year for everyone, but we’re lucky that people always need insurance, especially when times are tough, and even more customers are looking for a value focused provider like us.”
“Lockdown changed the insurance market in many ways. For us, there are more people working from home and investing in expensive laptops which they want to cover. There’s also been a big rise in bike ownership and these are treasured items that people want to protect.”
Urban Jungle plans to invest in hiring, marketing and “giving the traditional market some serious competition”, according to Williams.
He said: “The insurance sector has been calling for a newcomer to disrupt it for some time and we’re doing just that.”
UK paytech company Modulr has become the first non-bank to offer confirmation of payee, a fraud prevention initiative designed to ensure payments reach the correct recipient.
Spearheaded by payments authority Pay.UK, confirmation of payee protects customers from malicious redirect payment fraud, when a person is tricked into approving a payment to a fraudster’s account.
Through confirmation of payee, the second Modulr product launch to come out of its £10 million grant from the Capability and Innovation Fund under the RBS Alternative Remedies package, customers will have greater assurance their payments are going to the right recipient when they’re paying a business or personal account.
Confirmation of payee calls on Modulr’s API and automatically checks that the recipient’s name and account details match the information held by their payment service provider.
Myles Stephenson, chief executive of Modulr, said: “We’re committed to delivering the very latest innovation in payments to our customers, and I’m delighted that we are the first non-bank or building society to offer confirmation of payee. Thousands of consumers and businesses fall victim to social engineering scams every year in the UK. Modulr is always looking for ways to help our customers keep their money safe.”
Brian Cunnington of Pay.UK added: “We are delighted to see confirmation of payee now making a difference in the UK payments environment. The new service offers protection for consumers through the account name checking service, reducing errors and fraudulent misdirection of funds.”
Modulr is payments-as-a-service API platform for digital businesses. Using Modulr, they can automate payment flows, embed payments into their platforms, and build new products and services.
The paytech company was authorised as an e-money institution in the UK in 2016 and became a principal issuing partner of Visa earlier this year.
US paytech startup Finix has extended its series B funding round and raised an additional $30 million from Lightspeed Venture Partners and American Express Ventures.
Finix secured $45 million earlier this year as part of its series B funding round, taking its total raised since launch to more than $90 million.
Payments infrastructure-as-a-service provider Finix helps startups to build and manage their own business-critical payments experiences to reduce cost, increase flexibility, and accelerate time to market.
The paytech startup now has more than 80 members of staff, counts mobility management platform Passport Labs, private club management software platform Clubessential, retail point-of-sale company Lightspeed POS as clients, and recently quadrupled the payments volume processed through its platform.
Lindsay Fitzgerald, managing director at American Express Ventures, said: “Traditionally, companies who have wanted to operate their own payments infrastructure either had to build payments capabilities in-house, which is costly and time-consuming, or outsource to a third-party provider, which can also be expensive. Finix provides a solution that enables companies to own, manage and monetise their entire payments experience.”
“Finix and American Express share a dedication to helping businesses simplify operations and grow their business. We are excited to support Finix’s continued growth as they deliver tools for ecommerce innovators.”
Will Kohler, partner at Lightspeed Venture Partners, added: “The pandemic has made it clear that seamless digital payments experiences are more critical to success than ever before. Massive enterprises and startups alike should take advantage of Finix and its spot at the intersection of the cloud and payments.”
New Zealand-headquartered accounting software company Xero has acquired cloud-based Waddle for approximately $58 million.
Founded in Australia in 2014, Waddle’s lending platform service allows banks, fintechs and other lending partners to easily and quickly deliver invoice finance to small businesses that have elected to share their accounting data to enable a loan.
Waddle currently has agreements with banks and lenders in the UK and Australia, and Xero will look to expand these relationships with financial partners to support more small businesses.
Xero’s new acquisition will remain a standalone company. High up on its agenda will be expanding small business customers’ access to forms of lending beyond invoice finance.
Steve Vamos, chief executive officer of Xero, highlighted Waddle’s ability to provide flexible, ongoing lines of credit and automate many of the manual processes involved in invoice finance as key motivations for the acquisition.
The deal for Waddle will reportedly cost about $22 million up front, with a further $36 million due as and when product development and revenue milestones are reached.
Cryptocurrency exchange FTX has acquired consumer portfolio tracking app Blockfolio for $150 million.
The cash, cryptocurrency and stock deal will see a cryptocurrency exchange focused on traders of derivatives, options, volatility products and leveraged tokens gain access to a significant consumer audience.
Founded in 2014, Blockfolio has been downloaded by more than six million users and averages more than 150 million impressions per month. The company has raised more than $17 million from investors that include Founders Fund, Pantera Capital, Dan Matuszewski of CMS Holdings, DCM Ventures and Hashkey Digital Asset Group.
Following the acquisition, FTX and Blockfolio will collaborate on a Blockfolio-branded retail trading experience that will launch later this year.
Since FTX’s launch in May 2019, the cryptocurrency exchange’s goal has been “to build the best quality trading experiences with the deepest liquidity for the widest possible cross section of traders”, according to co-founder and chief executive officer Sam Bankman-Fried.
He said: “Blockfolio has built trusted relationships with millions within the crypto community, and we’re thrilled to be able to work with them to develop new and exciting experiences for that audience.”
Ed Moncada, co-founder and chief executive officer of Blockfolio, said: “We believe crypto is on the cusp of mainstream adoption. So we’re thrilled by the potential of uniting one of the best product teams in our industry with what we are convinced is the best exchange in the space.”
“To us no one is innovating as quickly or with as much depth of thought and integrity as Sam and his team at FTX. I couldn’t be more excited.”
Moov Financial, the US-based open source embedded banking platform, has raised $5.5 million in seed funding.
Led by Bain Capital Ventures, the funding round also saw participation from five other venture capital firms and 27 angel investors.
Veridian Credit Union also participated in the round after signing an agreement for use of Moov’s developer-led open source platform, which allows companies to quickly deploy basic financial service solutions to seamlessly receive funds, store value and remit payments.
The seed funding enables Moov to continue to build the community, expand its engineering team, and deepen partnerships and enterprise agreements.
Commenting on the investment, Matt Harris, partner at Bain Capital Ventures, said: “The industry has been looking for an experienced team with the expertise and ability to build industry consensus around the common need for a modern, portable, embedded money movement infrastructure. I am confident that Moov has the team to accomplish this task.”
Maria Palma, principal at RRE Ventures, added: “As the financial services industry adapts to an open source-first movement, we must build and invest in solutions that benefit all participants with transparent, community-driven solutions. I’m delighted to partner with the Moov team as they redefine the basic building blocks of money movement.”
Wade Arnold, founder and chief executive officer of Moov, said: “Seamless banking services have become a consumer expectation for technology companies in the same way the internet, cloud, and mobile have done in the past.”
“We see history being repeated in fintech where proprietary solutions were first to market and subsequently replaced by community-led efforts surrounding open source projects.”
Mastercard and TransferWise have expanded their partnership to enable the issuance of cards in almost any market around the world.
Under the expanded partnership, cards can be issued anywhere Mastercard is accepted and TransferWise is licensed.
Global paytech company TransferWise currently partners with Mastercard across the European economic area, US, Singapore, Australia and New Zealand, with Japan due to launch later this year.
This latest expansion of their relationship will allow a route to market in nearly all countries around the world.
Mastercard has built a strong partnership with TransferWise, working with the paytech since the issuance of its first debit card in Europe in 2018. Since then, TransferWise has issued more than one million Mastercard’s globally.
In addition to card issuance, leveraging Mastercard Send, TransferWise has launched the capability for account holders to be able to send money in near-real time to Mastercard cards in European countries, including Spain, Romania, Bulgaria, the Czech Republic, Hungary, Poland, Ukraine, Georgia, Croatia and Russia.
Kristo Käärmann, chief executive officer and co-founder of TransferWise, which was valued at $5 billion in July after new and existing investors bought $319 million of shares in the private UK-headquartered paytech company, said: ”We’re making it faster, cheaper and easier to move money around the world. To date over one million debit cards have been issued to people wanting to make the most of everything our borderless account has to offer.”
”As we think about the next phase in our international expansion, we want to ensure this process stays just as convenient whether you need a debit card in the UK or Japan. Building upon our partnership with Mastercard is important in maintaining that high level of convenience around the world.”
Andrea Scerch, president of processing services at Mastercard, said: “We are proud to be expanding our relationship with TransferWise, having enjoyed a solid partnership over the past three years.”
“Broadening TransferWise’s global reach will enable millions more people around the world to benefit from Mastercard’s worldwide acceptance footprint and TransferWise’s innovative multi-currency payment solutions.”
Commonwealth, an organisation dedicated to strengthening the opportunity and security of financially vulnerable people, has partnered with JPMorgan Chase to address the challenges and opportunities that emerging technologies present to lower- and moderate-income people’s financial lives.
Through the new partnership, US-based Commonwealth will research, understand and document the financial landscape for financially vulnerable people, examining usage patterns of emerging technologies with a focus on how they garner trust.
The initiative will examine how emerging technologies can address acute financial challenges faced by financially vulnerable people during the Covid-19 crisis, and on the path to recovery.
Data will be disaggregated by race, gender and age, and will consider the role of place. As part of this effort, fintech and non-profit innovators will field test research findings on the ground with their financially vulnerable consumers to produce more accurate, nuanced insights.
Commonwealth will produce tools and resources that inform and influence fintech and social impact innovators to harness the power of emerging technologies such as big data analytics and artificial intelligence in a way that addresses the needs of financially vulnerable people.
The project will include discussions and collaboration with key stakeholders, fintechs and experts in emerging technology and ultimately findings will be disseminated through digital assets and events, including a private stakeholder convening and a public webinar.
The initiative builds on Commonwealth’s prior work with JPMorgan Chase, which tested savings tools for lower-wage workers.
Timothy Flacke, co-founder and executive director of Commonwealth, said: “Emerging technology will play a central role in the post-Covid economy—but the question is, will this hurt or help America’s most financially vulnerable?”
“A time of disruption provides an opportunity to include new people in the financial system—but only if technology is intentionally designed and distributed based on a thorough understanding of the needs and aspirations of these customers.”
OutSystems, whose low-code application development platform is in use across insurance, banking, local government, higher education and healthcare, has named Patrick Jean as chief technology officer and June Duchesne as general counsel.
The new executives will play crucial roles in the rapid growth of OutSystems and its expanding ecosystem, according to the US-based company. Its platform allows enterprise developers to create accessible apps for web and mobile, while still ensuring full freedom of customisation.
Jean joins OutSystems with more than 20 years of engineering leadership experience in prominent roles at Citrix, Apttus and Microsoft.
Most recently, he was vice president of unified cloud engineering at Citrix, where he tripled the size of the cloud engineering team.
In his role as chief technology officer, Jean will lead the global engineering team and OutSystems’s continued investment in innovation..
Duchesne has experience leading and advising technology companies, ranging from Fortune 50 to privately-held organisations, on a broad range of business and legal matters.
Prior to OutSystems, Duchesne was chief legal officer for Inovalon, a cloud-based platform provider in the healthcare industry. She also held senior leadership positions at Dell Technologies and EMC Corporation.
Paulo Rosado, founder and chief executive officer of OutSystems, said: “The challenges of 2020 have driven a level of digital transformation in three months that would have otherwise taken years. It’s more important than ever for companies to invest in their technical platform foundations so they can dramatically accelerate their digital projects and adapt to change.”
“OutSystems is in a unique position to help every organization be an innovator. The experiences Patrick and June have leading high-growth cloud companies give us an even deeper bench of leaders.”
PayActiv, the US-based provider of an employer-sponsored earned wage access and holistic financial wellness platform, has secured $100 million in funding.
Private equity firm Eldridge led PayActiv’s series C funding round, with participation from existing shareholders Generation Partners and the Ziegler Link•Age Fund II.
PayActiv has also structured an expandable variable funding facility with Security Benefit, a retirement solutions provider.
This combination of growth equity and a variable funding facility provides PayActiv with the capability to expand its customer base, while supporting current clients with cost-free financial wellness benefits that improve employee engagement and retention.
PayActiv currently serves more than four million employees across 1,000+ businesses in retail, food services, business processing services, and 400+ senior living and healthcare businesses. Its clients include Walmart, Wayfair, Ibex Global and many others.
As a standalone ready-to-use mobile app, PayActiv provides the funds for earned wage access.
Users can access their cash through direct pickup, the PayActiv prepaid card, instant Visa or Mastercard debit card load, ACH payment, or by using wages to pay bills, make purchases on Amazon, or purchase rides on Uber.
The company also provides its users with a range of financial wellness and planning tools backed by AI and machine learning that enable customers to save, budget and more efficiently manage their money.
“The future of pay is not a two-week cycle,” said Todd Boehly, co-founder, chairman, and chief executive officer of Eldridge. “By simply giving people access to their wages as they earn them, PayActiv increases the velocity of money, stimulating the economy and serving employers and employees by driving costs down and efficiencies up.”
OakNorth Bank has approved more than £600 million in new loans to support British businesses since lockdown began in March.
The UK bank, which is powered by OakNorth technology, has lent £220 million through the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The British Business Bank has approved an additional CBILS allocation for OakNorth Bank, which Ben Barbanel, head of debt finance, said will help “experienced management teams and businesses that were viable pre-pandemic”.
Barbanel said: “While lockdown measures have continued to ease over the past month, things have hardly gone back to normal and there continues to be uncertainty around a potential second wave. It is with this in mind that we must continue to support experienced management teams and businesses that were viable pre-pandemic.”
“This additional allocation from the British Business Bank will enable us to continue doing that in addition to the lending we’re doing outside of the schemes. We look forward to continuing our work with the British Business Bank.”
OakNorth, developer of the technology that powers the UK banking arm, recently signed a commercial agreement with PNC Bank, one of the leading credit providers to middle market companies across the US, for use of the Covid Vulnerability Rating CVR across its commercial and industrial and commercial real estate portfolios.
Stripe has appointed a chief financial officer as the US-headquartered paytech embarks on its next stage of growth.
Dhivya Suryadevara is joining Stripe as chief financial officer from automotive manufacturer General Motors, where she oversaw financial operations amounting to more than $100 billion in annual revenue and millions of vehicles delivered annually by 180,000 employees across six continents.
According to Stripe, Suryadevara has a track record of leadership in a high-scale environment and a proficiency in strategic transformation, and, crucially, has played a significant role in capital allocation and spearheaded numerous strategic transactions.
Commenting on her appointment, Suryadevara said: “I’m very excited to join Stripe at a pivotal time for the company. Stripe’s mission to increase the GDP of the internet is more important now than ever.”
“I really enjoy leading complex, large-scale businesses and I hope to use my skills to help accelerate Stripe’s already steep growth trajectory.”
Suryadevara’s appointment follows the arrivals of Mike Clayville, formerly of Amazon Web Services, as Stripe’s chief revenue officer, and Trish Walsh, previously at Voya Financial, as general counsel.
John Collison (pictured), co-founder of Stripe, said: “Dhivya is a rare leader who has run an industry-leading leviathan but also gets excited about enabling the brand-new products and the yet-to-be invented products, too.”
“She has the expertise and the instincts to help steer Stripe through our growth in the years ahead.”
With more than 400 new employees coming on board so far in 2020, Stripe now has a 2,800-strong workforce across 16 global offices. The paytech has processed $10 billion for customers that joined Stripe since the onset of the pandemic in the US in March.
Stripe has ramped up international expansion significantly over the past year, launching its service in 15 new countries across Latin America, Asia Pacific and Europe.
The paytech extended its series G funding round in April and raised an additional $600 million from investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia.
The UK’s three major challenger fintech firms are yet to turn a profit, but two, Revolut and Starling, remain optimistic that they can overcome significant losses and break even.
Revolut is the latest UK challenger to report significant losses. It posted a total loss of £106.5 million for 2019, up from £32.9 million in 2018.
But Revolut also saw its revenues increase to £162.7 million from £58.2 million, its user base triple to 10 million, daily active customers jump 231%, and the number of paying customers grow by 139%.
Revolut blamed international expansion and new products for the losses. Founder and chief executive officer Nik Storonsky said: “Despite the current economic challenges, we remain focused on our goal of moving towards profitability.”
Its series D funding round, led by US-based investor TCV, closed at $500 million, taking Revolut’s total amount raised since launch to $836 million.
At $5.5 billion, Revolut is now one of the most valuable fintechs in the world. It has more than 10 million customers globally. Since launch, Revolut has processed more than one billion transactions worth over $130 billion.
Starling Bank, meanwhile, reported losses of £52.07 million for the year ending 30 November 2019, up from £25.07 million in 2018.
But it too has cause to be optimistic. Starling reported that 926,000 retail accounts had been opened, along with 82,000 business and sole trader accounts, by the end of the last financial year, with just over £1 billion on deposit.
Intercontinental Exchange (ICE) has agreed to acquire Ellie Mae, a cloud-based platform provider for mortgage finance.
The cash and stock acquisition values Ellie Mae, a portfolio company of private equity firm Thoma Bravo, at $11 billion. The deal will close later this year.
Lenders rely on Ellie Mae’s Digital Lending Platform to securely manage and facilitate the exchange of data across the ecosystem to enable the origination of mortgages while maintaining strict adherence to various local, state and federal compliance requirements.
ICE said the acquisition of Ellie Mae, which has approximately 1,700 employees and more than 3,000 customers, will make it the leading provider of end-to-end electronic workflow solutions serving the evolving US residential mortgage industry.
ICE’s acquisition of MERS and Simplifile has helped to automate the post-closing process. The addition of Ellie Mae extends its reach to the origination space.
Jeffrey Sprecher, founder, chairman and chief executive officer of ICE, said: “Twenty years after we founded Intercontinental Exchange to provide a transparent trading platform for the energy industry, and following two decades of providing continued innovation to help customers navigate global markets, we are pleased to announce the acquisition of Ellie Mae, which will help us similarly transform the mortgage marketplace.”
“Our planned acquisition represents a one-of-a-kind opportunity to add an extraordinary enterprise with great leadership to our family. It will also enhance ICE’s growth strategy in mortgage technology, with complementary products and a wide array of customers and stakeholders who will benefit from our core and proven expertise in operating networks and marketplaces.”
Jonathan Corr, president and chief executive officer of Ellie Mae, added: “We are excited to be joining the Intercontinental Exchange family and having the opportunity to work closely with Simplifile and MERS in helping our industry to realize the true digital mortgage.”
“We have been on a journey, as we have long said, ‘to automate everything automatable’ for the mortgage industry, and joining ICE, which has followed a parallel journey in global exchanges, will allow us to further accelerate realising our vision.”
The Dubai International Financial Centre’s (DIFC) fintech accelerator has received its highest ever number of applications.
DIFC FinTech Hive, an annual programme that encourages and invests in fintechs from across the Middle East, Africa and South Asia (MEASA) region, received 620 global, regional and local applications to be a part of its fourth cohort.
The 620 applications for the intake exceed the previous record of 425 received in 2019. The applications represent a broad range of concepts, including fintech, insurtech, regtech and Islamic fintech.
Key technologies within the submissions include contactless payments, digital identification, and corporate solutions including treasury management, credit underwriting automation, data management and analytics.
Thirty percent of applications were from United Arab Emirates-based firms, demonstrating a strong pipeline of financial technology talent within the jurisdiction. Forty-six percent came from the Middle East and North Africa region and 24% were received from global firms.
Indian FinTech firms were well represented, accounting for 17% of applications. India has become a leading market for fintech development by value and investment, according to DIFC.
Selected DIFC FinTech Hive participants will benefit from support, business guidance and mentorship from more than 30 ecosystem partners, comprising of data firms, funding partners, technology companies and strategic advisers, business associates and community partners such as Middle East Venture Partners (MEVP), Wamda, Global Ventures, IBM, Microsoft, Amazon, BSA Ahmad Bin Hezeem & Associates, Clifford Chance, Grant Thornton, and PwC.
Commenting on the announcement, Raja Al Mazrouei, executive vice president of DIFC FinTech Hive, said: “The record number of applications for the fourth cohort of DIFC FinTech Hive demonstrates the depth of talent, quality of concepts and the business maturity that is present in the UAE and regionally.”
“Our enabling infrastructure, fit-for-purpose-regulation, subsidised licensing and access to some of the world’s pioneering financial institutions are amongst the reasons why startups look to DIFC for growth.”
The DIFC FinTech Hive accelerator programme includes an intensive, competitive application process. Selected businesses participate in a 14-week curriculum, providing a springboard for seed and pre-seed startups to expand in the MEASA region.
During the programme, successful startups will unlock opportunities to develop, test and modify their innovations in collaboration with executives and financial institutions from DIFC’s ecosystem.
More than 50% of all fintech businesses in the Middle East and North Africa now operate from DIFC. The first half of 2020 saw DIFC FinTech Hive triple in size with the opening of a larger space.
UK-based fintech incubator Quantum Group has acquired mobile cashback app Tail.
Quantum Group, which acquired 30% of Tail in 2019, completed its acquisition of the company this month for an undisclosed sum.
Tail provides reward services to major UK challenger banks Starling and Monzo. It takes advantage of open banking data to help banks provide cashback, rewards and loyalty programmes to customers in a seamless, automated manner, eliminating the need for loyalty cards or vouchers. Instead, Tail transfers cashback directly to customers’ bank accounts after purchase.
For participating retailers, Tail provides a fully-managed platform that enables retailers to create hyperlocal marketing campaigns, allowing them to increase general footfall and customer volume across demographics.
Tail began development in 2016, launching its first API integration on Starling in July 2017. It has subsequently integrated with other UK digital challenger banks Monzo and Volopa.
With the completed acquisition, Quantum Group plans to continue to increase the number of banking partners integrated with the Tail platform, and to onboard a diverse set of retailers from around the UK.
Dave Pearson, who has come on board as managing director, said: “We are looking forward to continuing the great work that Tail has achieved, and ensuring that the expansion of both banking partners and retailer cashback offers even greater value to our customers. The Tail platform is designed to ensure the customer and retailer alike enjoy a seamless experience that changes the way they interact with their cards.”
Quantum Group is a fintech investment incubator whose portfolio of companies includes pre-paid multi-currency card company Volopa and security specialist Valkyrie.
Floyd Woodrow MBE, chairman of Quantum Group, said: “We are delighted to welcome Tail fully on board within the Quantum Group. Tail’s world-class service offers true value to cardholders around the UK, as well as our banking partners and retailers, and we are excited for the platform’s future expansion.”
Germany-based startup Candis, the provider of an automated accounting platform, has raised €12 million in series B funding.
Candis plans to invest the funding in growth and expansion, product development, and recruitment. Viola Ventures and Rabo Frontier Ventures, together with existing investors Speedinvest, 42CAP and Point Nine Capital, participated in the round.
Launched in 2015, Candis provides cloud accounting to medium-sized companies in need of digital solutions to simplify their finance functions.
Christian Ritosek, co-founder and managing director of Candis, explained: “Our machine learning-based technology disrupts a whole industry, in which the majority of tasks are still very manual. The pattern recognition engine automates accounting workflows and empowers companies with real-time data and insights to make better financial decisions.”
Following the investment, Omry Ben David of Viola Ventures and Jeroen van Doornik from Rabo Frontier Ventures joined the advisory board at Candis, which described them as experienced board members who have worked with companies such as Payoneer and Northzone
Israel’s Viola Ventures in particular is heavily focused on emerging technology startups, having supported more than 200 since its inception in 2000.
Rabo Frontier Ventures, meanwhile, specialises in fintech and agtech, and has a €120 million venture capital fund at its disposal.
Google has partnered with eight banks, including BBVA, to offer digital accounts to Google Pay users in the US.
The internet company revealed late last year that it would partner with bank accounts and credit unions to launch a digital account. Along with BBVA, Google has also partnered with Bank Mobile, BMO Harris, Coastal Community Bank, First Independence Bank and SEFCU.
Citi and SFCU were already signed up to the project, taking Google’s total number of banking partners to eight.
According to BBVA, the co-branded digital account will launch in 2021. It will be offered via Google Pay and built on top of each banking partner’s existing infrastructure. The internet company will provide the front-end, intuitive user experiences and financial insights.
Felix Lin, vice president of payments ecosystems at Google, said: “Google is excited to work with BBVA USA in enabling a digital experience that is equitable for all and meets the evolving needs of a new generation of customers.”
“We believe that we can use our technology expertise to benefit users, banks and the entire financial ecosystem.”
Javier Rodríguez Soler (pictured), president and chief executive officer at BBVA USA, said: “BBVA has focused for decades on how it could use digital to advance the financial industry, and in so doing, create more and better opportunities for customers to manage their financial health.”
“Collaborations with companies like Google represent the future of banking. Consumers end up the true winners when finance and big tech work together for their benefit.”
Google isn’t the only Silicon Valley technology company that’s moving into financial services.
Most notably, Apple partnered with Goldman Sachs last year to launch Apple Card, a credit card that carries no fees, offers daily cash back, and integrates with Apple’s mobile devices.
Small business lender iwoca has called on the chief executive officers of the UK’s largest banks to actively refer applicants to the fintech to speed up their access to the Coronavirus Business Interruption Loan Scheme (CBILS).
The call for referrals comes as iwoca announces a new fundraising round of £100 million, which the lender will use to scale its CBILS offering and fund new customers through the scheme for the first time.
According to iwoca, small businesses’ access to CBILS is being limited by the additional operational pressures for banks in approving more than one million Bounce Back Loans and providing consumer credit support.
Its analysis of UK Treasury data reveals that the gap between the number of CBILS applications and approvals has grown every week since the launch of Bounce Back Loans, rising from 40,560 in mid-May to 58,707.
Demand for CBILS has remained consistent over this period, with an average of 3,481 new weekly applications—or one every three minutes. In the last week of available data, 3,729 new applications were submitted.
With CBILS due to close in September, demand is likely to rise over the coming weeks, especially as other UK government support measures such as the Job Retention Scheme wind down.
A large number of the 790,000 firms with more than £250,000 in annual revenues could yet apply for CBILS, according to iwoca, putting a great amount of pressure on large lenders dealing with unprecedented demand for finance from small businesses that are going through the application process.
In order to address this demand, iwoca is calling on the UK’s largest banks to refer those businesses that they do not have the ability to serve to the fintech lender.
These businesses include those that have been waiting for more than two weeks to receive feedback on their application, those that have either withdrawn or have incomplete applications that haven’t been followed up by the banks’ staff, and smaller firms requiring a relationship manager to complete their application but don’t have access to them as they’re served through the banks’ call centres.
A direct referral process is key as the vast majority of businesses wouldn’t otherwise consider seeking finance from an alternative lender, according to iwoca.
Every business that applies for a CBILS facility up to £350,000 from iwoca receives a dedicated relationship manager to guide them through the process. This support means that on average customers receive a final decision and funds in their bank account in around three days.
Christoph Rieche, chief executive officer of iwoca said: “We want to give small businesses the best chance of finding the support they so clearly need, which means the banks must work with us. It’s not acceptable that thousands of the businesses applying for CBILS are left hanging for weeks or even months without getting a decision from their bank. As an industry we have a joint responsibility in supporting this effort so that SMEs can access finance fast to survive and thrive.”
European fintech FinecoBank registered strong activity from its UK client base across its brokerage, investing and banking business during the first half of this year.
FinecoBank, present in the UK market since 2017, saw active clients increase by 56% over the previous year. The fintech attracted three-times the number of new current accounts than it did in the previous quarter.
FinecoBank is set to focus on expanding its investing platform, with new investment houses and a new ISA and SIPs planned for 2021. Its goal is to offer UK customers access to more than 70 asset managers with more than 7,000 products within the next year.
Commenting on the H1 results, Paolo Di Grazia, vice general manager of FinecoBank, said: “Our UK business has gone from strength to strength this year. We continue to see strong client acquisition as well as significant increase in the number of active clients thanks to our one-stop-solution model combining banking, brokerage and investing offering in one single account.”
“Our competitive Multicurrency offering has proven to be a powerful entry gate, with a very high percentage of active clients interested in our listed products offer, best-in-class in terms of pricing, quality and wide choice.”
Di Grazia continued: “Despite a volatile market, we continue to see activity grow and the UK remains an important market for us to be. The UK has strong players, but it’s ripe for the next wave of a digital shake-up. As a leading European digital bank, our ability to deliver brokerage, banking and investment services in one place is unique in the UK market.”
“We plan to continue to drive our UK strategy by combining our comprehensive offering with compelling pricing, a professional-standard trading platform and free real time prices.”
In the first half of 2020, FinecoBank recorded increased profitability of 30% to €181 million. Brokerage revenues rose to €127.9 million.
In the midst of the Covid-19 pandemic, right between the health crisis winding down and the fear of a second wave kicking up again, we witnessed another corporate scandal with far reaching implications, not only for the company itself, but also its subsidiaries, investors, employees, regulators, auditors and, most importantly, its clients. While there has been, and will be, a lot more good dialogue, debate and analysis on what exactly went wrong with Wirecard, there is a far broader problem that warrants discussion.
As a result of the accounting fraud perpetrated by Wirecard, businesses that relied on its technology to process payments, including a number of UK firms, saw their payments frozen. These companies were unable to take any payments at a time when cashflow was already under severe pressure and new funds essential to their survival. The Financial Conduct Authority, based in the UK, froze e-money accounts and any payment transactions that were supported by Wirecard to safeguard its clients’ funds. While this action was taken to protect end clients, it also prevented merchants and small- and medium-sized enterprises from getting paid and consumers denied access to their funds.
And while Wirecard was down and companies unable to transact, there was no back up for them, there was no second vendor that companies had integrated with in case something like this happened. There was no plan B. And in most cases, there is never a plan B.
The Wirecard scandal has exposed again just how dangerous single-party solutions are, especially in key parts of your business. The old saying about eggs and baskets rings true: businesses need to tread carefully when only having one vendor solve for a key part of their business. Weather this is for payments, or other business critical areas. A lot of time is spent aligning service level agreements and making sure that vendor downtime is properly managed, with financial implications for when vendors are offline and interrupt their clients’ business.
However, seldomly is there a real solution to the unmanageable. What if your vendor suddenly stops trading all together? There should be an answer. And while companies understand this to be true, the problem that many are faced with is that their IT systems are old, complex or outdated, meaning that integrating vendors, across the business, becomes a complex, time consuming and expensive exercise. Because of this, even doing one integration can take an extortionate amount of time, leaving the chances of companies selecting multiple vendors in an effort to mitigate risk as pretty slim.
Companies are left with the unenviable trade-off between this risk mitigation on the one side, and effective resource utilisation on the other. They have multiple projects and problems that they are trying to solve for at the same time, often with the same resources and limited funds.
Countless companies are unfortunately being held hostage by the age or state of their IT systems and finance processes; ‘hostage’ meaning the sense that just daring to say the words “integration” or “work on the core system” is met with disdain, apprehension and anxiety within the companies. These issues are pervasive across almost all industries, including banking, travel, hospitality, utilities, services and insurance. The fallout from the Wirecard scandal should act as a wakeup call, that relying on single third-party providers for services as critical as payments could put them at significant risk of business disruptions and service outages in future.
Many in the broader industry are quick to dismiss that “everyone” has these payment risk problems, and that this is “par for the course”. That should scare us, because this scandal has shown us that no matter how big the vendor is, the risk remains and just gets more critical in nature. Companies, specifically insurers, banks, and large corporates, are expected to be immune to these types of problems, or at least have strategies to tackle them. When a payment provider goes down, for whatever reason, no customer will care why they cannot receive their claim in an emergency or have access to their funds, and regulators will have a dim view of any such developments. No customer will want to hear about integration difficulties or business trade-offs.
What has been laid bare is that many companies are simply not ready for this type of problem and have massive amounts of operational and regulatory risks that have not been acknowledged. It is important for organisations to better classify and understand what the crucial capabilities and services are in order to make their operations more flexible and resilient.
Regulation surrounding payments was traditionally contained within the walls of the traditional banking industry and known payment service providers. Technology development and deployment was also very focused on this smaller group of entities, meaning writing regulation and controlling technological capabilities was simpler.
The market has seen a surge in new payment providers in recent years, especially targeting online and alternative payments, making it extremely difficult for policymakers to keep up and maintain relevant and applicable regulations. Digital payments have many benefits to customers and businesses alike, and with Covid-19 accelerating the preference for and adoption of digital payment methods, even more payments are taking place in this ‘new’ domain. The problem is that this is now largely outside the regulated perimeter of financial services that regulators and market actors have been comfortable with so far.
Now, more than ever, regulators will look into what happened, and act decisively to safeguard customers’ best interest. What new rules and operating procedures the regulators across the UK and Europe are likely to adopt is still open for discussion, however, it is safe to assume that companies will need to respond quickly, regardless of their own operational shortcomings.
Companies will need to look outside of their own organisation and traditional solutions to find new, innovative ways that will allow them to work with, rather than against their own outdated legacy IT systems, deliver multiple projects simultaneously, and manage costs. Requiring and managing multiple banking partners and payment service provider connections is extremely costly and time consuming, and so traditionally only used by large companies. Within fintech, we see the rise of companies and emerging technologies that bring multi-acquiring capabilities that are easy to implement and easily scale.
KPMG states that by 2030, traditional boundaries within financial services will disappear with a move towards ‘platformication’. Banks will let customers choose services from a range of different providers to personalise and tailor offers and experiences to their needs. Consumers will experience a reduction in the number of interfaces and services they need to individually sign up to access the services or products. Coupled with the adoption of open banking, more advanced banking players and neobanks, with greater access to data to support their business models and new propositions, will look to offer significantly differentiated services and experiences that will be, or could be, vastly different to the current offers in the market. The role of the regulator, to safeguard consumers, while not stifling innovation, will be critical in the coming years and they will be getting more involved.
We have all seen first-hand the impact the Wirecard scandal has had on companies, their employees and their clients, and we cannot emphasise enough how critical it is to not be a hostage to your own processes and systems—especially when there are solutions in the market that can address this issue. The urgent question for now is, are you exposed to risks like these and how will you urgently solve them? Simply saying “we are not clients of Wirecard” is unfortunately not going to be enough.
Since its launch nine years ago, TransferWise has grown into a 14-office paytech business, with more than 2,200 employees.
It has more than eight million customers and processes more than £4 billion in cross-border transactions every month.
Teddy Gleser, partner at D1 Capital Partners, said: “TransferWise has built an exceptional platform within the cross-border payments ecosystem by maintaining an unwavering focus on its customers and constantly innovating.”
“We have been impressed by the extensibility of TransferWise’s platform, which now includes individuals, businesses and financial institutions among its customers.”
TransferWise for Banks will enable Swiss financial institutions to offer TransferWise’s international transfer service within their own apps.
The first Swiss financial institution to take advantage is digital bank neon, whose chief executive officer, Jörg Sandrock, said: “This partnership will greatly reduce the pain of sending money internationally and makes the neon account truly borderless.”
Amazon Pay has teamed up with Acko, India’s first digital insurer, to offer car and bike insurance.
Customers can now purchase Acko car and bike policies through Amazon Pay on the website or through the app, with Prime members set to receive additional benefits and discounts.
The partnership creates a simplified and quick customer journey, completable in less than two minutes and with no paperwork, according to Amazon.
Acko, with more than 50 million policies sold in India, will provide hassle-free claims, one-hour pick-up, three-day assured claim servicing and one-year repair warranties, as well as an option for instant cash settlements for low value claims.
Add-ons such as zero-depreciation and engine protection will also be available.
Vikas Bansal, director and head of financial services at Amazon Pay in India, which sells movie and flight tickets, said there has been a growing demand for more services from its existing customers.
Bansal said: “In line with this need, we are excited to launch an auto insurance product that is affordable, convenient, and provides a seamless claims experience.”
Varun Dua, chief executive officer of Acko General Insurance, continued: “We are happy to partner with Amazon Pay to offer an auto insurance proposition that has been designed with the customer at the centre.”
“Through this product we aim to deliver a superior consumer experience right from purchase to claims by making it more affordable, accessible and seamless. This launch also marks an important milestone in our successful partnership with Amazon and we are excited about the journey ahead.”
Acko has made significant progress since it arrived on the insurtech scene in India in 2016.
Last year, Acko raised $65 million in series C funding. The digital insurer is also planning to offer cover for health, taxis and flights.
Amazon Pay, meanwhile, is pressing ahead with a significant expansion in India, where the internet giant has so far committed $6.5 billion in investment, with $1 billion set aside to help small and medium-sized businesses move online.
Global insurtech investment bounced back in Q2 2020 to $1.56 billion after a Covid-19-induced slowdown, according to insurance adviser and broker Willis Towers Watson.
The total, up 71% over Q1 2020, was driven in part by later-stage investments, including four mega-rounds worth in excess of $100 million.
At 74, deal count was down 23% from Q1, but many individual rounds were larger as investors continued to turn away from seed and angel deals in favour of support for more mature ventures.
Property and casualty sector investments dominated, accounting for 68% of insurtech funding, but the share of life and health sector investments was up 17 points to 32%, as the pandemic crisis continues to compound the value of technology, and particularly telehealth, in the segment.
Also notable was the initial public offering of Lemonade and the acquisition of two incumbent insurance companies by insurtechs Hippo and Buckle.
Seed and series A financing hit a record low, at just 42% of deals. Series A deals were flat, but series C deals accounted for 11% of deals, up from 6% the previous quarter.
Distribution-focused startups saw an 11-point rise in deal share, while B2B companies reduced their share by nine points. New insurer and reinsurer partnerships reached a record high of 34 deals, up four from Q1 2020.
Dr Andrew Johnston, global head of insurtech at Willis Re, cautioned against reading too much into the investment resurgence: “While insurtech investment clearly rebounded in Q2, and the trend towards greater commitments to later-stage fundraisings continues, we should be cautious and not read too much into the general state of the global insurtech market based on this quarter alone.”
“In the short term, investment confidence will test the status quo, especially for highly leveraged insurtechs. Similarly, certain risks and their associated vectors have changed fundamentally and so the impact of that is yet to be truly felt. It is quite possible that we will observe a general slowing down of insurtech activity as a result.”
Johnston continued: “In the medium term, changing risk classes may be better understood alongside rising consumer optimism, but the true economic impact of Covid-19 probably won’t unfold until 2021 and 2022. This will undoubtedly impact many (re)insurers’ appetite to invest in or deploy technology.”
“Survival may be a challenge for some insurtechs, especially if their use-case has been lost forever due to underlying societal change following the lockdown. Equally, such changes will create opportunities for others. If the funding gap between seed and later stages continues to widen then many insurtechs will struggle to acquire the funds required for maturing growth.”
Germany-based wealth manager Scalable Capital, hot on the heels of its B2B partnership with Barclays, has raised €50 million in series D funding.
The funding, from new and existing investors including BlackRock, HV Holtzbrinck Ventures, and Tengelmann Ventures, takes Scalable Capital’s total raised to €116 million since 2014 and values the wealthtech at €400 million.
Scalable Capital aims to “to give a broad group of investors access to a form of investment that was previously reserved for the very wealthy”.
For €2.99 per month, Scalable Capital’s platform allows retail investors to monitor and manage their investments in a range of asset classes through exchange-traded funds (ETFs). It claims to be the largest digital asset manager in Europe with more than £1.7 billion in assets under management.
Barclays Plan & Invest will create a personalised investment plan that’s tailored to a customer’s goals, with Barclays then managing the investments on their behalf.
The new service will use Scalable Capital’s robo adviser, which adapts an investment plan to any changes in the market or the customer’s circumstances and checks in with them at least once a year.
The new service will initially be piloted with Barclays current account customers who have at least £5,000 to invest and will be accessed through online banking, with dedicated support over the phone. The bank will continue to develop the service over the coming months, with plans to launch on the Barclays app later this summer.
Dirk Klee, chief executive officer of wealth management and investments at Barclays, said that a rise in the number of people wanting to invest for the first time prompted the decision to launch the new service.
Klee continued: “We launched Plan & Invest after listening to our customers, who said they wanted an investment service that gave them the convenience and affordability of robo-advice, but with more of the personalisation of wealth management.”
“I firmly believe that everyone should have access to affordable advice and Plan & Invest is just the first step in our plans to open up the tools we use with our wealth clients to more people.”
The brand loyalty and investment app on a mission to drive wealth back into communities has partnered with mobile commerce platform Button to enable its users to discover in-app brand offers, shop, and earn fractional shares of stock.
US-based Bits of Stock links with a user’s bank account, matches purchases from participating brands such as Bloomingdale’s, Hulu and Walgreens, and delivers fractional shares as rewards.
Through the partnership with Button, also based in the US, users can reap these rewards through the mobile commerce platform’s Personalization API.
Brand offers in the Bits of Stock app will be accurately matched with motivated purchasers, enabling Bits of Stock to deliver more personalised, enjoyable experiences to users.
Optimised offers will also enable participating brands to spend their affiliate marketing budgets in a smarter way.
Arash Asady, co-founder and chief executive officer of Bits of Stock, said: “Bits is on a mission to give wealth back to our communities. We believe ownership mentality is the key to financial prosperity for all. Partnering with Button to give our users Bits of Stock when they shop with the brands they know and love is continuing that mission.”
Michael Jaconi, co-founder and chief executive officer of Button, commented: “We’re thrilled to welcome Bits of Stock, the newest fintech company to join Button’s platform and build a commerce-first strategy on top of our Personalization API.”
“Innovators like Bits of Stock are creating a powerful new model for users, and their approach to partnering with marketers has been focused on driving value for all parties. Brands on our platform are excited to connect with this innovative new model designed around financial wellness.”
Button has had a strong 2020, surpassing $3 billion in mobile spending on its platform.
Last year, Button secured $30 million in a series C round led by Icon Ventures along with participation from Capital One and returning investors Redpoint, Norwest, and DCM.
Singapore-based digital banking and data firm Percipient has raised US $5 million to support the launch of a new solution.
Stat Zero, a US venture capital firm, supplied the funding for the launch of Twinn.
Percipient describes Twinn as the world’s first ‘digital twin’ for financial services. It enables banks and insurers burdened by legacy technology to rapidly create a lightweight, enhanced and API-ready representation of enterprise data and processes.
Developed over three years, Twinn is the creation of former global banking technology leaders, based on their experience of more than 150 digital transformations.
Stat Zero’s investment comes from its billion-dollar venture-as-a-service platform established in May last year. It brings together governments, entrepreneurs and venture capital to solve global challenges.
Percipient is one of the first ventures to be funded by Stat Zero globally, and its first in the Asia Pacific.
Marquis Cabrera, co-founder and chief executive officer of Stat Zero, said: “Stat Zero is committed to helping companies digitise, and the Twinn, with its ‘use-what-you-have’ design, turns the current digital transformation process on its head. Prohibitive costs and timelines are replaced by non-invasive, ready-to-use digital components.”
“The potential impact on mid-to-lower tier financial institutions, the long tail of digital laggards within the industry, will be both wide ranging and significant.”
Navin Suri, co-founder and chief executive officer of Percipient, said: “Digital transformation approaches in financial services have not kept pace with changing demand. Now with the Covid-19 pandemic, the pace of digital transformation has further shifted gears. There is no time to lose in the race to offer frictionless digital financial services that cater to everyone, not just the young and tech-savvy.”
“The Percipient team have experienced the challenges of system transformation first-hand. This Stat Zero funding will help us reach the many financial services companies that are looking for a faster, simpler, more cost-effective and future-compatible way to solve these.”
The accountancy profession can play a key role in helping businesses access the finance they need to secure their future beyond the coronavirus (Covid-19) pandemic, according to small business lender iwoca.
Accountants are central to gaining access to the UK Coronavirus Business Interruption Loan Scheme (CBILS), of which iwoca is an accredited lender.
According to iwoca, accountants provide cash flow forecasts, financial statements and assistance, ensuring small businesses have the correct documentation to complete the application process.
Accountancy leaders at a recent iwoca event expressed frustration when supporting their small- and medium-sized enterprise (SME) clients through CBILS applications with larger lenders, alluding to delays in response times, getting stuck in call centre queues and banks not understanding the needs of businesses.
In response, iwoca has designed its CBILS application process to address these concerns and meet the needs of small businesses and their accountants.
The lender expects to triple accountant referrals, delivering 10 times more lending through this channel than before Covid-19.
Each business will receive a dedicated iwoca relationship manager, who gives regular updates to accountants and can provide a decision on the application within days.
“This speedy, personalised approach is particularly important for those businesses whose financial needs are too large for a Bounce Back Loan but too small to qualify for a relationship manager at their main bank, meaning they risk losing out on vital assistance to guide them through the application process,” according to iwoca.
Having already worked with more than 1,000 accountants, iwoca is now one of the first fintech lenders to reach out to accountants directly, illustrating the value that the company—which has lent more than £1 billion to more than 50,000 small businesses—places on these essential operatives in the profession of supporting the future of SMEs.
Accountants can sign up to become an iwoca CBILS introducer on iwoca’s portal.
Colin Goldstein, commercial growth director at iwoca, said: “The impact of Covid-19 means that small businesses need more financial support than ever to survive the crisis and rebuild their business. CBILS loans are a key part of the solution, and accountants are a key adviser and line of support for businesses applying for CBILS.”
“iwoca has worked with more than 1,000 accountants nationwide to help them secure the right finance solutions for their clients, and we’re now investing heavily to provide the support accountants need in securing CBILS loans for clients, in particular, small businesses who are struggling to get the support they need from the high street banks.”
Ben Johnson, global director of financial partnerships at Xero, commented: “If you’re a small business needing access to finance, you may find yourself being sent down a bit of a rabbit hole. Applying with a fintech can give you another option, and in many cases you will get a fast response and be able to share your financial information digitally.”
“CBILS is a really powerful scheme that could set you up for the next couple of years of ramping your business back up, so while it’s still here I would urge businesses to explore it by speaking to an advisor, and if you do go ahead make sure you have a plan to serve the repayment of the loan.”
Della Hudson, founder of Minerva Accountants, added: “Automation is perfectly adequate when everything is going smoothly, but if there is a problem you need to be able to pick up the phone and speak to somebody. This is where a lot of banks are struggling—they are barely coping with the automation in place, and haven’t even thought about the backstop of a human being. It’s nicer dealing with fintechs and the more modern banks who are able to handle both the automation and the customer relations that really makes a difference.”
Rob Jones, co-lead of the new iwocaPay service, recently told FinTech Intel why fintech stands ready to aid businesses dealing with the Covid-19 crisis.
He said: “The fintech community in particular is able to scale fast and as a group has already supported more than 400,000 small and micro businesses with finance, representing 30% of all small- and medium-sized enterprise lending. Fintechs have the ability to get money to exactly where it is needed within hours, not weeks. We want to be at the heart of this recovery for small businesses not just this year, but for many to come.”
The UK Financial Conduct Authority (FCA) and the City of London Corporation will collaborate on the pilot of a digital sandbox to support innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic.
The strategic partnership will see both organisations work together to develop and launch a digital testing environment to provide innovative firms with access to high-quality data sets to allow for the testing and validation of technology solutions.
In its pilot stage, the digital sandbox will support large financial institutions and startups looking to play a key role in the recovery from coronavirus through supplying relevant data sets and expertise in the areas of detecting and preventing fraud and scams, supporting vulnerable customers, and improving access to finance for small- and medium-sized enterprises financially affected by the pandemic.
Christopher Woolard, interim chief executive of the FCA, said: “Innovation is a powerful driver of effective competition and can help to accelerate the development of new solutions to emerging challenges.”
“Building on our existing work supporting innovation in the market, we are now helping to establish a platform to tackle the challenges that will face the financial services sector in the recovery from Covid-19. We look forward to working with the City of London on this important initiative.”
Catherine McGuinness, policy chair at City of London Corporation, said: “The UK has long been a world leader in fintech, fuelled by our innovative spirit, our creative energy, and our regulatory approach. That has borne fruit during this difficult period, during which we’ve seen accelerated demand for digitisation.”
“As we look towards recovery, it’s therefore vital that we continue to support innovation, and this digital testing environment provides us with the opportunity to do just that.”
“The City of London Corporation is committed to working alongside the FCA to build the digital sandbox and ensuring that the financial services sector fulfils its potential as a vital part of our future economic success.”
EIS is the San Francisco-headquartered operator of a platform that allows insurers to rapidly create and deploy new and innovative products and services via open APIs. It has recently launched its coretech platform in the UK to help domestic insurers offer a new generation of insurance products and services in response to changing consumer habits and an evolving regulatory landscape.
FinTech Intel: Congratulations on your UK launch—how much consumer appetite in the UK is there for value-added services from insurers?
Olivier Vaysse: There is a huge appetite from the UK market to be able to add value-added services to their offering, whether they are a corporate or private insurance provider. The UK is the home of insurance and is one of the most competitive markets in the world. Yet, insurers are currently struggling to differentiate themselves from their competitors. The problems are also exacerbated by the fact that it is proving incredibly difficult to keep up with the demands of the consumer, especially in reaction to the global pandemic and the chaos it has caused.
In a recent EIS survey, UK insurers and insurtechs told us that the most important objective of an insurer of the future is to move beyond protection to offer value-added services.
By using a cloud-based platform, with open APIs that provides access to value-added services, insurers can increase customer engagement and improve the experience they can provide, by selling services that align with their needs. This way, insurers can rest assured that they’re going above and beyond to build a sustainable relationship where the customer remains happy and won’t leave for a competitor as soon as their policy ends.
FinTech Intel: How restrictive is legacy technology to being able to deliver these services?
Olivier Vaysse: The insurance industry is well known for being slow to modernise and adapt to the needs of customers. This has resulted in poor customer experience and high customer churn. This matters because it costs insurers seven times as much to acquire a new customer than it does to retain an existing one. Despite a desire to improve on this, many insurers have failed to deliver because of the limitations created by existing legacy systems.
The legacy technology used by insurers for decades was product-centric, not customer-centric, and not designed to be flexible. The core systems deployed even three to five years ago simply were not designed with the microservices, APIs, and flexibility necessary to support insurtechs, emerging business models, and digital insurance ecosystems. They are, in effect, modern-legacy systems. Some of these modern-legacy systems now operate in the cloud, which is great. But it doesn’t change the fact that many need to be updated, or even re-architected, to easily participate in the new digital insurance ecosystems that can deliver value-added services to customers.
Insurers need to take a new, coretech approach to transformation and leverage the next-generation technologies and methodologies pioneered by consumer-focused big tech and combine with newer, more open insurance core systems. This platform can easily consume insurtech and data, in all their forms, and serve as a hub for the array of solutions comprising digital insurance ecosystems that will help provide unique customer experiences.
FinTech Intel: What have your insurance customers been able to achieve once they begin using your platform?
Olivier Vaysse: Customer centricity is paramount. By allowing carriers to realign their business model around the customer, insurers can better understand and provide for their customers as people, not policy numbers.
Our platform provides insurers with a 360-degree view of its customers—across policy administration, underwriting, claims, billing, and all customer engagements.
Our insurance clients have used the platform to simplify core back-end processes then create customer-facing apps for quoting and servicing that are omnichannel and tailored to the personas of their customers. The open architecture has allowed clients to easily integrate with insurtechs providing usage-based data or broader distribution of their insurance products. Clients also take advantage of being able to support both general and life, accident and health insurance products on a single platform in multiple countries. Regulatory differences between geographies are handled effectively through extensive product configuration and integration to the related ecosystem of data sources and agencies.
FinTech Intel: How important are APIs to your offering?
Olivier Vaysse: APIs are a cornerstone to our offering and we firmly believe the success of the insurer industry rests upon the use of these technologies.
APIs enable insurers to expose core processes such as quoting and claim processing, which significantly improves customers’ digital experiences. Ultimately, this will help insurers all over the world use internal and external data much smarter, to capture and delight customers along the policy life cycle for longer. Our platform has a connective tissue of more than 10,000 internal APIs and over 1200 open, or external, APIs.
The clever use of APIs is also allowing insurers to modernise front and back-end operations in a more progressive, phased way without having to invest in full technology infrastructure overhauls. This allows the insurers to stay relevant by implementing new services aligned with the needs of the consumers.
FinTech Intel: What scope is there for EIS to build an ecosystem of digital services around insurance, in partnership with incumbents and insurtechs?
Olivier Vaysse: In recent years, insurers have struggled to adapt to the changing demands of consumers. They are being held back by their legacy estates that are slow to change, difficult to integrate, complex to draw insight from, and lack the agility to deliver innovative services.
Our initiative to create an intelligent digital ecosystem will allow insurers to take a more radical approach to transformation, offering a greenfield platform for transitioning away from legacy technology. It can be seen as an accelerator asset that shows insurers that moving away from legacy is much quicker, cheaper and more sustainable than ever before. It will demonstrate a fast and low-cost stand-up of core platform and architecture, the ability to leverage new partners and insurtech innovation in a plug and play model, and the ability to adopt more customer-centric business models such as episodic insurance.
The ecosystem will allow insurers to break into the platform economy and develop new products and value-added services, fit for the customer of tomorrow. What’s more, it will provide insurers with an opportunity to differentiate themselves from their competitors with a connected platform that allows them to understand the customers and their needs.
Olivier Vaysse: Our partnership with EPAM is incredibly important to our expansion in the UK market. EPAM has a wealth of experience in software implementation and is a partner we can rely on. THe coronavirus (Covid-19) pandemic has highlighted just how important digital transformation is to the insurance sector, with insurers unable to sit back and ignore the benefits.
Our research has shown that 71% of respondents have accelerated initiatives to digitise operations and customer experience as a result of the pandemic. Our partnership with EPAM will allow our customers to quickly and efficiently implement our coretech platform, which will help to set them up for ecosystem insurance serving the customer of tomorrow.
UK not-for-profit Fair for You (FfY) has landed £7.5 million in investment to take on the traditional credit sector.
The investment, which includes £5 million in dormant assets funding from the UK government-backed Fair4All Finance, boosts the alternative credit provider’s available capital for its target customer base, who are unable to access mainstream credit for essential household items.
FfY partners with retailers including Whirlpool, Dunelm, Argos and Carpetright to enable its customers to access essential household items on credit.
Seven social investors joined forces to take out a perpetual bond that provides quasi capital of £7.5 million, which secures FfY’s balance sheet and allows it to leverage commercial funding to take on traditional credit providers.
Alongside Fair4All, the investment comes from Joseph Rowntree Foundation, Esmee Fairbairn, Tudor Trust, Barrow Cadbury Trust, Robertson Trust and Ignite, six of FfY’s existing social investors.
The perpetual bond provides £4.35 million upfront, rising to £7.5 million when fully drawn down from Fair4All.
FfY expects the investment to allow it to provide up to 250,000 loans per year in five years. It provided 25,000 loans in 2019.
Following the successful completion of the first phase of the perpetual bond, FfY has appointed Sarah Gardiner, formerly head of investor relations at Nationwide, to lead on commercial fundraising.
Gardiner, head of growth strategy at FfY, said: “I’m very excited to have joined Fair for You at a pivotal time. By lending responsibly and sustainably to tens of thousands of lower income households, Fair for You has demonstrated the huge opportunity to fill this much needed gap in the market. We are growing and diversifying our investor base to further boost our rapid growth and broaden the proposition.”
Howard Bell, chair of FfY, said: “There are around 15 million people in the UK struggling to access affordable credit who are just one unexpected bill or bit of bad luck away from a crisis. Lockdown has made it harder for families to live without basic items such as cookers and washing machines. The need for Fair for You to scale rapidly has never been clearer.”
“We are delighted to be the first genuine not for profit to use the dormant assets funding and ongoing support from social investors to leverage commercial funding and push out firms that take advantage of financially vulnerable customers.”