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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Teslar Software and First National Bank of Oklahoma announced a new partnership this week. The bank will leverage Teslar Software’s technology to streamline its lending processes. The partnership will also enable First National Bank of Oklahoma to better track exceptions and manage documentation.
First National Bank of Oklahoma president and CEO Mel Martin called Teslar Software a “natural fit to partner”. The relationship between the two entities goes back to the pandemic days when First National Bank of Oklahoma used the fintech’s PPP solution. “We experienced firsthand that they’re a nimble, dependable organization that truly understands and cares about community banks,” Martin said. He added that the technology from Teslar will not only help the bank become more efficient, “it will also help us better manage risk in our portfolio.”
Headquartered in Springdale, Arkansas, and founded in 2008, Teslar Software made its Finovate debut at FinovateSpring 2015 as 3E Software. The company returned to the Finovate stage last year for FinovateFall. At the conference, Teslar demoed its technology that simplifies, digitizes, and automates the indirect lending process for community financial institutions.
“How can it be that a bank has a great relationship with a small business?” Teslar Software founder and CEO Joe Ehrhardt asked during his company’s live demo last fall. “How is it that they are financing them, but they fail to finance that business’ end user?” Teslar Software’s Indirect Lending product helps community financial institutions grow their customer base by teaming up with local businesses to provide financing for purchases of items like power tools, outdoor equipment, and furniture. As Erhardt explained, financing for these purchases is often cumbersome and inefficient for consumers. Facilitating partnerships between community financial institutions and local small businesses in the community is how Indirect Lending solves the problem.
With $750 million in assets, First National Bank of Oklahoma maintains offices in Oklahoma City, Ponca City, Tonkawa, and Tulsa. The bank was chartered in 1917, and recently celebrated its 105th anniversary. First National Bank of Oklahoma is only the most recent financial institution to partner with Teslar. The company teamed up with Ohio’s Merchants National Bank in March and announced a collaboration with Mississippi-based Magnolia State Bank in April.
San Francisco, California-based fraud prevention startup Darwinium has launched its Continuous Customer Protection platform.
The new offering helps close the gap between digital security and fraud prevention silos.
Darwinium made its Finovate debut earlier this year at FinovateEurope in London.
Security and fraud prevention specialist Darwinium has launched its Continuous Customer Protection platform. The technology helps deal with the problem of disconnected point-in-time API integrations and risk scores. These issues can lead to both data breaches and a poor customer experience. Darwinium’s Continuous Customer Protection platform provides continuous visibility and control throughout the entire customer journey. This enables the technology to proactively cover the distance between the silos of digital security and fraud prevention.
In a statement, Darwinium co-founder and CEO Alisdair Faulkner noted research that highlighted the impact of fraud controls on the customer experience. More than 80% of businesses, according to the report, said that fraud controls contribute to unwanted friction for customers. “To create a low-friction customer experience while also enabling optimal fraud and security controls, Darwinium has architected a new path forward for improved fraud detection in real time that performs dramatically better and faster and takes only minutes to deploy – all while providing a positive and privacy-protected customer online experience and frustrating fraudsters,” Darwinium CEO and co-founder Alisdair Faulkner said.
Darwinium is deployed at the network edge, via content delivery network (CDN) infrastructure, using edge workers. This gives the technology full, omni-channel visibility and the ability to provide real-time insights into device, network, identity, behavior, content, and location. The solution also can call out to third-party APIs to conditionally refine risk decisions.
Darwinium’s primary customers are payment service providers, fintechs, gaming companies, and online marketplaces. Faulkner indicated that further penetration of these markets was high on Darwinium’s agenda. “The challenges online U.S. businesses face with surging fraud and operational silos, combined with our unique solution make this an ideal time to expand and enter the market in force,” Faulkner said.
Headquartered in San Francisco, California, Darwinium made its Finovate debut earlier this year at FinovateEurope in London. The company was launched in 2021 by the team that founded, built, and scaled digital identity innovator ThreatMetrix. Relx Group acquired ThreatMetrix in 2018.
What is the state of fintech midway through 2023? I caught up with our Meet at the Cafe analysts to hear their thoughts on the trends and tensions that are driving fintech today. My conversations featured Chris Skinner, author and CEO of the Finanser.com; Richard Neve, Executive Creative Director, Cognito Media; and Suraya Randawa, Head of Omnichannel Experience, Curinos.
Join our upcoming Meet at the Cafe conversation featuring myself and Finovate Senior Research Analyst Julie Muhn, at FinovateSpring on Wednesday May 24th.
Chris Skinner: On Crypto Winters and Fintech Bloodbaths
For Chris Skinner, the circumstances for cryptocurrencies in specific and fintech in general are dire. Referring to our current moment as “the crypto winter and fintech bloodbath,” the CEO of The Finanser and frequent Finovate keynote speaker sees the crisis in crypto and the current challenges to fintech as part of the fallout from the overinvestment, overvaluation, and over-enthusiasm of the COVID era. He explained that we are now seeing those valuations plunge as the overhyping of all things digital becomes corrected post-pandemic. Skinner’s recent blog post “The 7 Deadly Sins of Startups” underscores the ways many would-be innovators of our time have, in too many instances, brought misfortune down upon themselves.
Fortunately, Skinner noted, the underlying systems that have made Bitcoin and digital assets possible – and continue to make fintech innovation possible – remain intact. In this, he sees a period for startups not unlike the post-dot.com era of retrenchment. It will be a “rocky road” in Skinner’s estimation, but perhaps not as long a journey as we might fear. He suspects we could start to see new business cases in crypto and digital assets as soon as the next two years.
What should we look for to know when the crypto winter is starting to turn toward spring? Skinner suggests not just watching for a recovery in venture capital and private equity spending, but also noticing what they are investing in. He’s on the lookout for strong B2B use cases, as well as companies solving real customer problems in retail and banking. Lastly, he points to the leaders – the Nubanks, the Klarnas, the Stripes. If fintech rebounds, then companies like these should have long coattails for a new round of startups to chase.
Richard Neve: Make Profits and Invest in Your Brand
For Richard Neve, the days when all that mattered were growth, top line gains, market share – the idea of getting big first and making money later – are gone. Now that fintechs are increasingly graded based on their profitability – or lack thereof – there are few things more important than showing potential investors and partners that you have a clear pathway to a strong bottom line.
“Now it’s about return on equity,” Neve said. “Companies need to think about their product – which customers do – not just the number of customers they have.”
But profitability isn’t easy. Not the least of which is because, as Neve, puts it plainly: “financial services is an expensive business.” A significant portion of that expense, he notes, is the result of meeting regulatory obligations consistently and accurately, which drives costs in a notoriously “people-intensive” industry like financial services.
The key to profitability, Neve explained, is volume, and the path toward greater volume for fintechs is via distribution. “If you’re a fintech, you need to grow in order to keep up with the HSBCs, the larger players,” he said. Fortunately, there are multiple ways for fintechs to grow and what works for one fintech may not work for another. In some instances, partnering with a larger player is preferable. The larger partner may be a bank, of course, but partnerships with Big Tech and Big Retail – and even Big Social – could all provide opportunities for fintechs to reach more customers. More intimately, M&A and joint ventures with other fintechs will also be routes startups will pursue to achieve greater scale and profitability. “The smart entrepreneur will scout out any opportunity available,” Neve said. “In a larger constellation, (they) will always be stronger than they will be on their own.”
Lastly, Neve wanted to make a point about the importance of brand in financial services – especially when it comes to attracting partners. “People want to do business with people they know,” he said. “If people don’t have a narrative about you, (then) they don’t want to partner with you or invest in you. The fintech that will win is the one that continues to invest in its brand.”
Suraya Randawa: Adulting in the World of Banking
The importance of making money as a financial services organization – bank or fintech – is a major issue from Suraya Randawa’s perspective, as well. “Investors are patient,” Randawa said, “but at the end of the day, you need to turn a profit.” She recalled the meme in recent years that “balance sheet banking was dead” – not so much, it seems, as the recent spate of bank failures attests.
Randawa is sympathetic to the challenges that fintechs face, and she is clear on their strengths, as well. “Fintechs are good at targeting segments, designing interfaces, and then delivering excellent user experiences – if not excellent customer experiences,” she said. “Fintechs are great for discovery. (They) are the place for innovation and failure. That’s why banks are attracted to them.”
But as the popularity of the fintech’s solution grows, and the number of users grows, new challenges appear. Some users will be content with a company’s initial offerings. Yet the sheer volume of these individuals can become an issue as startups realize the importance – and cost – of the less glamorous aspects of running a customer-facing business. These issues include things like dispute management, or customer service at a time of social panic (like a global pandemic or a systemic financial crisis or a terrorist attack).
Other users will bring new demands, a phenomenon we’ve seen – at its most powerful – help an online bookstore become The Greatest Retailer on Earth and turn a teen dancing app into a major international social marketing tool. Randawa talked about fintechs that have successfully expanded their offerings over time, companies like Monzo, Revolut, Chime, and SoFi. “They were strong with their initial segments, and then successfully grew,” Randawa said. Asked how much of this ability to scale – and even transform – is customer-driven and how much is powered by the vision of company leaders, Randawa suggests both factors are likely at work.
Given all the attention on the lifecycle of companies, Randawa reminds us that the customers have a lifecycle, too. And as customers get older and their lives become more complicated, so will their financial needs. “Customers are adulting and maturing along with your company,” Randawa said. The customer who only needed a savings account and a debit card today may be seeking financial advice – let alone a car loan, a mortgage, or a college savings fund (or two) – sooner than anyone thinks. As such, Randawa believes that successful fintechs will keep this in mind and come up with innovative ways to respond to these needs as they arise. “The successful fintech,” she said, “puts the customer at the center, at the heart of their service and innovation.”
Meet Ulyana Shtybel, CEO of Quoroom: the end-to-end fundraising and cap table management software provider for private companies.
Founded in 2018 and headquartered in London, Quoroom made its Finovate debut in March at FinovateEurope. At the conference, Shtybel demoed Quoroom’s investor relations tools that help companies connect with the right investors, provide a clear visualization of the company’s financial metrics, and keep shareholders “in the loop” as the business grows.
In this Q&A, we talked about the current challenges private companies are facing when it comes to securing funding. We also discussed the enabling technologies and strategies that are available to help enhance and accelerate the process of raising capital.
What problem does Quoroom solve and who does it solve it for?
Ulyana Shtybel: Capital raising is broken. Private companies spend months and even years in the fundraising process, learning how to raise capital and repeating the same mistakes, approaching the wrong investors and often spamming them with irrelevant investment opportunities.
In today’s world, startups have to become professionals in raising capital, as they cannot get funded otherwise. However, hiring a professional adviser is not a common practice, as they are expensive and there is no appropriate culture to hire an investment banker until a business becomes pre-IPO.
While fundraising, companies become distracted from their core business activities and rely too much on raising capital. Investors often express their desire for startups to focus more on product development.
The reality is that there are a lot of nuances and techniques involved in the fundraising process. Without proper knowledge and execution of these techniques, startups and scaleups often fail to raise capital. According to a study by CB Insights, 47% of startup failures in 2022 were due to a lack of financing.
With over 10 years of experience in capital markets, finance, and venture capital, my team and I decided to address this issue and rethink how fundraising is done. We automated the fundraising workflow, data visualization, and sharing of updates with investors so companies can easily do what is necessary for successful capital raising: building relationships with investors prior to the funding round and creating an investor’s FOMO (Fear of Missing Out).
Quoroom also provides a data room and investor portal to close deals with investors and a capitalization table to manage shareholders and the administration of the company.
How does Quoroom solve this problem better than other companies?
Shtybel: Quoroom is the first data-centric capital raising and company administration software. Companies use Quoroom to build relationships with investors and raise capital up to four times faster while saving thousands of dollars in software and legal fees annually.
We have a deep understanding of the capital raising process and what actually drives investors to invest in startups. Unlike other investor relations software on the market, we help companies send investor updates and share data with potential investors, not just existing ones.
Quoroom combines all the necessary tools for raising capital and managing investors, which are currently fragmented, in one place. It covers private company administration from funding to secondary liquidity in one platform, saving companies tons of money and time in the long term.
Who are Quoroom’s primary customers? How do you reach them?
Shtybel: Our primary audience is private companies from the technology sector, including startups and scaleups. We reach out to them through our useful content, events, and our partners, such as lawyers, corporate finance advisers, and other fans of our product.
Can you tell us about a favourite implementation or deployment of your technology?
Shtybel: Quoroom is not only a SaaS platform for companies, but we also offer our technology as a white label for investment banks and boutiques to provide great value to their clients.
Our technology is easy to deploy, and through investment firms, even more companies and investors can experience a seamless capital raising process.
What in your background gave you the confidence to respond to this challenge?
Shtybel: As a former Executive Director of the Warsaw Stock Exchange Office in Ukraine, I had the opportunity to meet many technology companies that were not ready for an IPO, but wanted to raise capital to scale their businesses. This is how I started working with startups and scaleups on the one hand and VC investors on the other. Later, I co-founded my first tech business and went through the fundraising process, running into many of the same problems and mistakes, despite having a fantastic network of investors in my contacts.
My firsthand experience in successful and unsuccessful fundraising helped me identify patterns, and this is how Quoroom was born and launched in late 2020.
The private capital market is yet to grow and decisions will become more data-driven, I’m quite confident Quoroom is a solution to help traditional inventors and AI-driven VCs take better decisions.
What is the fintech industry like in your area? What is the relationship between emergent fintech startups and the country’s established financial services sector?
Shtybel: Quoroom is legaltech and fintech software that operates in the capital markets industry, which is predominantly represented by solutions for public capital markets, and some solutions that service private companies. However, these solutions are fragmented, and an average private company usually invites investors to five different platforms and uses eight platforms to manage the same investment, which can be a costly and inconvenient approach. One of the most established players in our industry is Carta, which is U.S.-based cap table management software. They don’t have the fundraising component, but they are actively acquiring companies in the sector. The U.S. venture capital and private equity market are much larger than the European market – 60% versus 21% of global VC deal value – but Carta acquired a European portion of the cap table management market via the acquisition of Capdesk. The year 2022-2023 is showing that the fintech market tends to consolidate.
You recently demoed your technology at FinovateEurope in London. What was that experience like?
Shtybel: FinovateEurope was truly one of the best events I have ever attended. The format was very different from any other conference, as the entire audience was there to listen to startup demos. This was absolutely fantastic and unique, as both corporate and investors came to listen to the demos. After our demo, we received much attention from investors and potential partners.
What are your goals for Quoroom? What can we expect from the company over the balance of 2023 and beyond?
Shtybel: We rectify the capital raising process to help more companies thrive. Our platform offers both capital and compliance solutions for companies, as well as data, high-quality deal flow, and exit infrastructure for investors. We look forward to working with companies and partners from different countries, so more people can explore the value of Quoroom.
News that Venmo is now accepting transfers of cryptocurrency is among the top stories in crypto of late. Here are some of the other stories making the crypto headlines.
Paxos Partners with Fierce Finance
Blockchain infrastructure platform Paxos has forged a partnership with financial services app, Fierce Finance. Paxos’ technology will be leveraged to power Fierce Finance’s new digital asset experience. This new offering will combine an FDIC-insured checking account, a no-fee debit card, and fractional stock, ETF, and cryptocurrency trading all in a single app.
“We are the qualified custodian managing the licensing, trading, and technical complexity so that our clients can focus on building a seamless user experience,” Paxos Chief Revenue Officer Michael Coscetta said. “By integrating with Paxos platform, Fierce ensures its users get the best prices with the proper consumer protections in place so that their assets always remain safe and accessible.”
Headquartered in New York, Paxos was founded in 2012. The company reached a major milestone at the beginning of last month when it surpassed ten million active end user digital wallets globally. Earlier this year, Paxos launched an engineering R&D Center in Israel focused on “security and cryptography excellence.” The center will serve as a hub for cryptography researchers and security specialists to develop secure solutions on top of the blockchain.
Paxos has raised more than $540 million in funding. The company’s investors include Oak HC/FT, Declaration Partners, and PayPal Ventures.
Tax on Cryptocurrency Mining Proposed
If the Biden administration gets its way, the electricity used in mining cryptocurrencies could get a lot more expensive. The White House is proposing a 30% tax to offset the impact of cryptocurrency mining on the environment.
A statement from the Council of Economic Advisors (CEA) argues that the “high-energy consumption” of cryptocurrency mining “has negative spillovers on the environment, quality of life, and electricity grids” wherever they are located. A report from the White House released last fall suggested that cryptocurrency mining devours more electricity than the country of Australia. In the U.S., cryptocurrency mining represents between 0.9% and 1.7% of all electricity use. The U.S. is home to approximately a third of the world’s cryptocurrency mining.
Some critics of the proposal believe less in the administration’s concerns over the climate and more in its antipathy toward the cryptocurrency industry in general. Other observers suggest that taxing greenhouse gas emissions from cryptocurrency mining makes more sense than simply taxing electricity use – which can come from clean sources.
If enacted, the tax could yield $3.5 billion over 10 years.
Coinbase Launches International Exchange
Hot on the heels of securing a license to operate in Bermuda, U.S.-based cryptocurrency exchange Coinbase has launched its Coinbase International Exchange. The new exchange will give institutional market participants in eligible jurisdictions outside the U.S. the ability to trade perpetual futures.
Perpetual futures are similar to futures contracts in other assets. But there are important differences. Perpetual futures do not have an expiration period – unlike traditional futures contracts. This enables traders to hold on to their positions for longer periods – or even indefinitely. Trading in perpetual futures is not allowed in the U.S. But the market for perpetual futures is sizable. Almost 75% of cryptocurrency trading worldwide last year was in perpetual futures.
Coinbase International exchange listed perpetual futures contracts for both Bitcoin (BTC) and Ethereum (ETH) this week. The contracts provide 5x leverage and all trades are settled in USDC.
New Digital Asset Venture Fund Coming from Fineqia
Digital asset and fintech investment company Fineqia will launch a new venture capital fund to invest in startups in the digital asset space. The new fund, Fineqia Glass Slipper Ventures (FGSV), will focus on investments in early and growth-stage technology companies. Among Fineqia’s current investments in the industry are digital asset manager Wave Digital Assets LLDC, and blockchain gaming platform company Forte Labs. The fund has identified blockchain infrastructure, decentralized finance, and the metaverse as areas of particular investment interest.
“We have a proven track record of investments that are generating extraordinary returns,” Fineqia CEO Bundeep Singh Rangar said. “An investment fund will give us more firepower to invest in the most promising firms among the scores we see monthly and take advantage of entry valuations not frothy as they were 18 months ago.”
Deloitte Leverages the Blockchain for KYB, KYC
Will the next big thing in decentralized finance come from the underlying blockchain technology or from products like cryptocurrencies? The latest entry in the “innovative blockchain use case” competition comes courtesy of Deloitte Consulting. The firm announced that it has partnered with BOTLabs GmBh to use its KILT protocol to support KYC and KYB processes.
“By offering re-usable digital credentials anchored on the KILT blockchain, Deloitte is transforming verification processes for individuals and entities,” Head of Deloitte Managed Services Micha Bitterli said. “Digital credentials that are convenient, cost-effective and secure have the potential to open new digital marketplaces, from e-commerce and DeFi to gaming.”
Re-usable credentials are stored on the customer’s wallet on their own device. Customers have full control over whom they share their credential with. They can also control which data points on the credential they grant access to. Deloitte digitally signs the credentials and is able to revoke credentials via the blockchain if a customer’s circumstances change.
Behavioral biometrics and fraud detection innovator BioCatch has raised $40 million in funding.
The investment gives Permira a “significant minority stake” in the Tel-Aviv-based company.
BioCatch made its Finovate debut at FinovateFall 2014.
Behavioral biometrics innovator BioCatch has raised $40 million in funding courtesy of an investment from Permira Growth Opportunities. The capital gives Permira a “significant minority stake” in the New York and Tel Aviv-based company. In fact, along with Bain Capital and Maverick Capital, this week’s capital infusion makes Permira BioCatch’s third largest shareholder.
“Permira is one of the leading global private equity firms in the world, with particularly strong experience in the technology space,” BioCatch CEO Gadi Mazor said. “We believe its deep sector expertise and company-building capabilities will help us to expand our business and strengthen our global position.”
The funding takes BioCatch’s total capital raised to more than $213 million. No new valuation information was provided. BioCatch will use the capital to help support geographical expansion, product development, and potential M&A.
BioCatch is a pioneer in behavioral biometric intelligence and advanced digital fraud detection. Its technology leverages AI and machine learning to collect thousands of data signals to analyze the cognitive intent of users. This enables BioCatch to provide highly accurate insights into the legitimacy of a user’s identity and behavior. Financial institutions using BioCatch’s technology have been able to better fight fraud, accelerate digital transformation efforts, uncover new revenue opportunities, and boost customer satisfaction.
Founded in 2011, BioCatch made its Finovate debut at FinovateFall in 2014. In the years since, the company has grown into a fraud detection leader with a global footprint of 22 countries. More than 100 international banks rely on BioCatch’s technology to fight financial crime and defend themselves against fraud. BioCatch announced early this year that 2022 had been the firm’s “most successful” – with annual recurring revenue growth of more than 40%. BioCatch also revealed that the company added more than 100 leading global banks as customers in 2022 and detected more than $1.5 billion in fraud, saving banks nearly $1 billion.
Retail software company Celerant Technology has partnered with BNPL innovator Sezzle.
Celerant will integrate Sezzle’s SezzlePay solution into its platform. SezzlePay enables consumers to pay for purchases in four, interest-free installments over six weeks.
Sezzle made its Finovate debut at FinovateSpring 2016.
Retail software provider Celerant Technology announced a partnership with consumer financing solutions company Sezzle. The partnership will enable retailers who use Celerant eCommerce to add Sezzle Pay to their payment choices. This option gives consumers the ability to take advantage of Sezzle’s buy now, pay later (BNPL) financing, with 0% APR. Retailers will also benefit from engagement with potentially millions of Sezzle users, an opportunity that could lead to increased online sales and new customers.
“We’re excited to partner with a leader in the retail software industry and to bring Sezzle’s Buy Now, Pay Later financing to the millions of consumers that shop at Celerant’s diverse ecosystem of brands,” Sezzle co-founder and Chief Revenue Officer Paul Paradis said.
Paradis underscored the popularity of BNPL financing among millennials and Gen Z consumers. He pointed to the fact that BNPL financing charges no interest and no fees when purchases are paid for on time, as well as the ability to use BNPL to build credit, as two factors in favor of the financing option. “It’s a runaway hit,” Paradis said.
Celerant’s eCommerce platform enables retailers to offer Sezzle to customers directly from their website. The process is straightforward. Customers select SezzlePay as their payment option during checkout. This will enable them to split the cost of the transaction into four interest-free payments over six weeks. Sezzle pays the merchant in full at the time of the transaction; funds are direct deposited in the merchant’s account within one-to-three business days. Sezzle also assumes full risk of any missed payments.
“With more consumers turning to instant credit apps to make ends meet, it was important to expand our technology with additional consumer financing options,” Celerant President and CEO Ian Goldman said. “As a popular ‘buy now, pay later’ solution in the industry, partnering with Sezzle provides more options for our retailers to offer their customers payment flexibility and help financially with larger purchases, and in turn increase our retailers’ online sales.”
Sezzle made its Finovate debut at FinovateSpring in 2016. The company returned to the Finovate stage two years later for FinovateFall. Sezzle began 2023 as the first BNPL company in Canada to offer free credit-building service to users. The firm also began the year as a profitable company, growing from a net loss of $75.2 million in fiscal year 2021 to ending 2022 with net income in Q4. The turnaround came as a result of major cost-cutting strategies. These efforts included layoffs; a retreat from potential expansion in Asia, Europe, and Latin America; and a renegotiation of merchant fees. Sezzle also benefitted from a premium membership drive that brought on more than 132,000 subscribers.
Founded in 2016, Sezzle is headquartered in Minneapolis, Minnesota.
“With eBay International Shipping, we’re making global connections even more accessible, affordable, and profitable, significantly increasing the volume of items available to shoppers in 200+ countries and making it even easier for our sellers to tap a universe of new business opportunities,” eBay U.S. VP and GM Adam Ireland said.
According to Juniper Research, the value of cross-border ecommerce will top $2.1 trillion this year. But the cross-border ecommerce market is not without its complications. Businesses must navigate through a range of customs duties and import taxes in a process that can be both complex and costly. Using Avalara’s software, eBay International Shipping determines Harmonized System (HS) commodity classification codes, identifies item-level trade restrictions, and generates landed cost pricing for more than 200 items hosted on eBay. The new offering will help the platform’s more than five million merchants sell to more than 70 million buyers worldwide.
“With Avalara’s cross-border solutions embedded within eBay’s International Shipping program, we’re able to simplify cross-border compliance complexity and reduce potential customer experience disruptions by providing more transparent landed cost pricing for global buyers and helping ensure parcels meet local customs requirements,” Avalara EVP and GM of Indirect Tax Jayme Fishman said.
Avalara made its Finovate debut at our developer’s conference, FinDEVr SiliconValley in 2015. In the years since, the company has grown into a leading regtech with more than 30,000 customers across 95 countries. Avalara went public in 2018. The firm was acquired in 2022 by Vista Equity Partners in a deal valued at $8.4 billion. Headquartered in Seattle, Washington, Avalara was founded in 2004. Scott McFarlane is CEO.
May is Asian-American/Pacific Islander Heritage Month. May is also the month that brings Finovate back to San Francisco for our annual spring fintech conference, FinovateSpring.
To this end – and to officially launch our Asian-American Month Commemoration – we’re highlighting the women and men of Asian-American heritage who will be taking the stage at FinovateSpring May 23 through May 25.
As Financial Literacy Month draws to a close, we reached out to Parker Graham, founder and CEO of Finotta. We wanted to hear his thoughts on what it means to be financially literate at a time of major digital transformation and technological change – both in financial services and in the world writ large.
Finotta enables banks and credit unions to personalize their mobile banking experiences for their customers. Headquartered in Overland Park, Kansas, and founded in 2018, Finotta helps smaller financial organizations generate new revenue streams, boost user engagement, and compete with larger financial institutions.
Finotta made its Finovate debut last year at FinovateFall.
What does it mean to be financially literate in 2023?
Parker Graham: For many people, managing their finances and staying financially literate is not just a challenge – it feels harder than ever.
With decades-high inflation and historic interest rate hikes, consumers are feeling the heat. Most workers reported that any salary gains they’ve received in the last year have been outpaced by inflation. We’re really seeing this hit young people hard. Half of Gen Z and Millennials are living paycheck to paycheck.
Many consumers don’t know what steps to take to get ahead. And with traditional digital banking channels lacking that personalized experience, they aren’t getting the advice they need. Banks and credit unions must prioritize financial education for their customers because they can’t afford to be left behind.
In today’s world, is digital literacy required in order to be financially literate?
Graham: Digital literacy is a huge challenge we’re facing in the banking industry. More than 15 million people are not digitally literate. Consumers should not have to know how to bank online to make good financial choices.
To tackle this, banks should ensure that customer experience is at the forefront of all of their technology decisions. Banking apps need to be easy to read, quick to navigate, and intuitive – even for individuals who are not digital natives. This is exactly why we work directly with users when building our technology at Finotta to make sure it is easily accessible, navigable, and understandable.
Banking tech also must go the extra mile and make it personal by providing Personalized Financial Guidance (PFG) to customers. This guides consumers through their financial journey, no matter where they are, by offering tailored advice on how to meet their financial goals.
How can we make sure technology is an enabler of financial literacy rather than an obstacle to it?
Graham: Banks have to remember that acquiring a new digital banking solution isn’t just about technology for the sake of seeming flashy or modern. A banking app can actually help with financial literacy by taking the guesswork out of what customers should do with their money.
Your banking app needs to deliver the right experience, service, or product to the customer based on their individual data. Then, it should offer users concrete suggestions, like opening a new savings account for college tuition, that help them achieve financially healthy lives. The cherry on top is offering in-app rewards, like badges and milestones, that recognize customers for their positive choices and make financial literacy fun.
How does personalization in digital banking help foster financial literacy? How can fintechs help digital banking customers turn insights into action?
Graham: Consumers are looking for financial guidance beyond typical personal financial management tools, which do nothing more than provide fancy pie charts that show a customer’s spending.
From a consumer’s perspective, getting alerts in their banking app that tell them how much money they spent at Starbucks over the last month (when that money could have gone towards a 401K instead) does nothing more than shame them. It’s essentially saying, “Hey, you’re in a hole.”
Instead, banks can take consumer data one step further by helping them take actionable steps to reach their goals – like setting up monthly direct deposits to save towards retirement. A bank using a personalized approach can say, “Hey, we see you’re in a hole, and here’s how you can get out.”
Finotta made its Finovate debut last year at FinovateFall. What was that experience like?
Graham: Debuting our technology last year at FinovateFall was incredible. It gave us an opportunity to tell the story of how powerful and impactful our platform is in a room of our customers and peers.
What can we look forward to hearing about from Finotta in the coming months?
Graham: The next few months for us are going to be about scaling with more and more customers. It’s been a journey building our software and now we are focused on replicating our successes with as many financial institutions as possible.
Tyfone is also announcing that it has merged with digital banking provider Cubus Solutions. The two companies will move forward under the Tyfone brand. The investment and merger are designed to help accelerate the adoption of Tyfone’s nFinia digital banking platform. The addition of Cubus’ customers, digital solutions, and expertise will help the combined entity better serve financial institutions, helping them boost revenues and efficiency.
“Today success in digital banking – in fact, success in any financial technology – is all about engaged digital experiences and the ability to scale,” Tyfone CEO Dr. Siva Narendra said. “That means scaling up to power digital growth for larger institutions and scaling down to facilitate the smaller ones (to) stay relevant.”
Cubus CEO John-Ashley Paul added: “It is rare to find two companies so culturally well-aligned that also complement each other technologically. Our best-of-breed loan payments, loan skips, e-statements, and rewards solutions will extend the Tyfone digital banking ecosystem, leading to tighter integration and a truly exceptional user experience.”
Tyfone demoed its technology at FinovateSpring in 2008. In the years since, the Portland, Oregon-based company has grown into a provider of market-leading software for credit unions and community banks. This year, Tyfone has announced partnerships with Southwest Financial, a Texas based financial institution with 9,200 members and $81 million in assets; and with Members Advantage Credit Union, a credit union based in Wisconsin Rapids with 11,000 members and $178 million in assets.
Payments consulting startup Yeeld has teamed up with Stripe.
Two former Stripe employees – Emily Tsitrian and Mira Boora – founded Yeeld in the fall of 2022.
Earlier this month, Yeeld announced a partnership with Merit Software Holdings.
Payments consulting company Yeeld has announced a partnership with Stripe. What makes the partnership interesting is that Yeeld was launched just a few months ago by a pair of former Stripe employees: Emily Tsitrian and Mira Boora. The two financial services professionals are leveraging their more than 24 years of payments experience to help businesses optimize all aspects of the payments process – from managing chargebacks to streamlining payouts. Yeeld’s partnership with Stripe is the most recent example of this effort.
“Payments is no longer a commodity – it’s a strategy,” Tsitrian said. “It involves customer experience, geographic expansion, managing risks, and building for scale. Yeeld is passionate about helping businesses of all sizes achieve their payments-related ambitions, and partnering with Stripe will help (us) to do so faster.”
Yeeld offers service at three tiers: Kickstarter, Premium, and Enterprise. These tiers target tech-enabled SMEs and startups; marketplaces, mid-sized businesses, and e-commerce firms; and established companies, respectively. All Yeeld customers benefit from an initial, deep dive into the company’s current payment operations. This enables Yeeld to determine the best path toward optimizing the company’s system. Companies also receive a customized integration guide, a detailed project plan, as well as developer support and custom training. In its few months of existence, Yeeld already has gained 18 clients and completed 20 projects.
Earlier this month, Yeeld announced its partnership with Merit Software Holdings. Merit Software acquires, manages, and builds vertical software businesses. Yeeld will serve as the firm’s embedded payments consulting partner for Merit’s portfolio companies.
“We are excited to leverage the deep industry expertise from the Yeeld team to further accelerate growth and deliver even greater value to our customers, portfolio, and future acquisitions,” Merit CEO John Burke said.
Headquartered in Chicago, Illinois, Yeeld was founded in November 2022.
