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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Lighter Capital raised a $130 million credit facility.
The company will use the facility to continue funding early-stage companies.
Lighter Capital recently surpassed the milestone of distributing $350 million in growth capital via more than 1,000 rounds of financing.
Revenue-based financing fintech Lighter Capital has closed a $130 million credit facility this week. Today’s funds come from ATLAS SP Partners, i80, the Victorian Government, and iPartners.
The credit facility will be used to fund early-stage companies, something Lighter Capital has been doing since its launch in 2010. In fact, the company recently surpassed the milestone of having distributed $350 million in growth capital to more than 500 startups across the U.S., Canada, and Australia through more than 1,000 rounds of financing.
Lighter Capital’s revenue-based financing model helps startups that offer SaaS, technology services, subscription services, and digital media to access up to $4 million in growth capital without selling equity.
“Lighter Capital’s model is so innovative — a debt provider that’s essentially a VC partner,” said Qnary Founder and Chairman Bant Breen. “We get the financial rigor, network, and strategic guidance that a VC would give us, and that’s been incredibly helpful.”
Recently, the Seattle-based company has opened new offices in Australia, unveiled more non-dilutive funding options, and launched an online networking community for startup CEOs.
“After more than a decade in business, 2022 was our best year in the company’s history,” said company CEO Melissa Widner. “It’s a great privilege to help founders achieve their dreams on their terms by providing funding that doesn’t require selling equity or giving up control.”
Lighter Capital and other alternative financing startups are experiencing a moment in the fintech spotlight. That can be attributed to two factors. First, because VC funding is in decline, it is difficult to obtain equity financing. Additionally, banks have started to tighten their lending standards because of economic uncertainty and decreased collateral values.
An early Finovate alum, Lighter Capital’s most recent Finovate demo was at FinovateFall 2013, where then-CEO BJ Lackland demonstrated how the company’s small business lending platform leveraged CRM data to predict a borrower’s future performance.
Will 2023 be known as the year AI came of age? With the advent of Generative AI and tools like ChatGPT, the technology world got an unexpected boost this year as interest in the potential for artificial intelligence soared.
What does the surge in interest and activity in AI mean for financial services? How can fintechs leverage the technology to help banks, credit unions, and other financial services organizations and institutions better serve their customers with more choice, more security, and more efficiency?
We caught up with Dr. Benjamin Harvey, founder and CEO of AI Squared. Headquartered in Washington, D.C., AI Squared made its Finovate debut earlier this year at FinovateSpring and will return to the Finovate stage next month for FinovateFall. The company specializes in integrating artificial intelligence and machine learning into existing apps. We discussed the rise of AI, the impact AI might have on financial services, and the work of AI Squared in helping businesses take advantage of the emerging technology.
We also talked about the challenges Harvey has faced as an African American entrepreneur and founder in the technology industry. As we commemorate Black Business Month here in August, we are also happy to share his insights and advice on what African American founders and entrepreneurs need to keep in mind when starting out.
Let’s start with a big picture question: what is overhyped about AI, what’s underhyped, and what are we getting right?
Benjamin Harvey: There’s a lot of hype around AI, and some of it is warranted, but not all. One of the most overhyped ideas is that AI will replace humans in the workforce on a large scale. While AI can automate certain tasks, it can’t replicate the creativity, empathy, and critical thinking that humans bring to the table. On the flip side, what’s underhyped is the potential for AI to be simple while being useful. Many AI products have incredible potential but are too complicated for widespread adoption. Simplifying AI and making it more accessible can unlock its true potential and bring about transformative change across industries.
What most observers and commentators are getting right about AI is that it’s here to stay. AI is not just a passing trend; it’s a technological revolution that’s reshaping the way we live and work.
Now let’s turn to your company. What problem does AI Squared solve and who does it solve it for?
Harvey: AI Squared is a platform designed for product owners, data scientists, and enterprise leaders. We empower users to accelerate both predictive and generative AI projects, measure their benefits, and drive significant revenue growth and cost reduction. Our solution is industry-agnostic and loved by our users.
We address a critical issue in the AI industry: 90% of AI and ML models never make it into production or use, largely due to the time and cost involved. AI Squared tackles this problem head-on, reducing the time to production and use of AI and ML models from an average of 8 months to 8 hours or less. We provide a secure environment for accelerating AI projects, enabling users to measure benefits, use no/low code solutions, and deliver trustworthy AI results. By streamlining the AI deployment process, we help organizations harness their data to drive game-changing AI capabilities, driving innovation and growth.
How does AI Squared solve this problem better than other companies, other solutions?
Harvey: We understand that the key to successful AI adoption is seamless integration into existing workflows. Our solution is designed to fit effortlessly into the applications that our customers already use on a daily basis. By embedding AI capabilities directly into these familiar tools, we eliminate the need for users to switch between different platforms, thereby reducing friction and increasing efficiency. This approach not only enhances the user experience, but also drives greater AI adoption across the organization. Our technology is versatile and accessible, making it a valuable asset for teams at all levels, from operational staff to executive leadership. The result is a more informed, agile, and productive organization that can leverage AI to its full potential.
What is your primary market? What has their response to your technology been like?
Harvey: Our primary market is financial services and the response has been overwhelmingly positive! Financial services organizations are constantly seeking ways to improve efficiency, reduce costs, and enhance customer experiences. And our platform has been proven to address these needs by accelerating the deployment of AI and ML models, making it easier for these organizations to harness the power of their data.
When clients see how we can reduce AI implementation from 8 months to 8 hours they’re blown away. We’re proud to say that we’ve turned our clients into our biggest champions. The value we provide goes beyond just the technology; it’s about the tangible benefits that our platform brings to their operations. They appreciate the speed at which they can now bring AI projects to fruition, the ease of integration with their existing systems, and the measurable ROI that our platform delivers.
Are there any deployments or features of your technology that are especially noteworthy?
Harvey: First and foremost, we prioritize data security and privacy. Unlike many other AI platforms, we don’t store or copy our customers’ data. This is a crucial differentiator, especially for organizations in highly regulated industries like financial services, where data privacy and security are paramount.
We offer flexible deployment options to suit the specific needs of our customers. Our on-premises deployment ensures that all data remains within the customer’s own infrastructure, providing an added layer of security. For those who prefer a cloud-based solution, we offer a multi-tenant deployment that still maintains robust data privacy and security measures.
One of our standout features is our Human-in-the-Loop (HITL) capability. This feature allows human verification and corrections to be made to the data generated by Generative AI before it’s used in critical business applications. This ensures a high level of accuracy and reliability in the data, which is essential for making informed business decisions. Our HITL feature is particularly valuable for organizations that need to ensure the utmost accuracy in their AI-generated data, such as those in the financial services sector where even small errors can have significant consequences.
You and many of your team have significant backgrounds in academia and the government. How has the transition into a more entrepreneurial space been?
Harvey: The transition from academia and government to the entrepreneurial space has been both challenging and rewarding. Initially, it was a bit of a culture shock to shift from a focus on the technical aspects of AI to a more value-driven approach. In academia and government, the emphasis is often on the theoretical and technical aspects of AI, whereas in the entrepreneurial space, the focus is on delivering tangible value to customers.
But once we got past the initial adjustment, we found that our diverse backgrounds gave us a unique perspective and a competitive edge. While our experience in academia has equipped us with a deep understanding of the technical intricacies of AI, our government experience has given us insights into the importance of security and compliance, especially when dealing with sensitive data.
We’ve been able to leverage these insights to develop a platform that not only delivers powerful AI capabilities but also addresses the specific pain points and challenges faced by our customers. Our approach is rooted in a deep understanding of both the technical and practical aspects of AI, and we’re able to offer solutions that are tailored to the unique needs of each customer.
Left to right: AI Squared’s Benjamin Harvey, Alvin McClerkin (COO), and Michelle Bonat (CTO) at FinovateSpring.
We also want to showcase AI Squared as part of our Black Business Month commemoration. What challenges have you faced as a Black founder and entrepreneur? What advice would you give?
Harvey: Launching a company as a Black entrepreneur, particularly in the AI/technology space, comes with its own unique set of challenges. One of the most significant hurdles is the lack of resources and representation in the industry. As a Black founder, I often found myself navigating uncharted territory without the benefit of a robust network or role models to look up to. However, I believe that these challenges can be overcome with determination, persistence, and a strong support system.
My advice to aspiring Black tech founders is to build a solid network of mentors, advisors, and peers who can provide guidance and support along the way. Don’t be discouraged by setbacks or rejections; instead, use them as learning opportunities to refine your approach and strategy. Do your homework, stay informed about industry trends, and be prepared to articulate the value proposition of your technology clearly and convincingly. Most importantly, reach out to other Black founders and executives who have walked the path before you. Their insights and experiences can be invaluable as you navigate the complexities of the tech startup ecosystem.
Remember, you are not alone in this journey. There is a growing community of Black tech founders and professionals who are eager to support and uplift each other. By working together, we can break down barriers, create more inclusive opportunities, and pave the way for future generations of Black tech entrepreneurs.
Speaking of African-Americans, AI Squared is headquartered in Washington, D.C. What is the technology scene like there?
Harvey: D.C. is a hotbed of tech innovation, especially in security and intelligence. Being close to the Federal Government and defense agencies, we’re in a unique spot to work on projects that matter for national security. It’s a vibrant scene here, with big tech firms, cool startups, and research hubs all mixing it up. We’re a tight-knit community, always meeting up, sharing ideas, and pushing each other to innovate.
The best part is that if your tech is good enough for national security, it’s good enough for anything. We’re talking finance, healthcare, consumer goods – you name it. Being in D.C. gives us the credibility to branch out into these sectors. It’s an exciting place to be, and we’re happy to be part of it.
You demoed your technology at FinovateSpring earlier this year. What was that experience like for you?
Harvey: The experience of demoing our technology at FinovateSpring was exciting and valuable for us. It provided us with a unique platform to showcase our product to a large audience of stakeholders, and to connect with key decision-makers in the financial services industry. We got valuable feedback on our product.
But the demo wasn’t without its challenges. Some technical difficulties with signing in and that, combined with the strict time constraints of the event, impacted our demo. These are things that tend to happen when demo-ing in a new forum. But it’s in our DNA to adapt and we did – and received positive feedback from attendees and made valuable connections that have since led to fruitful discussions. Overall, the experience was a great opportunity for us to showcase our technology, connect with industry leaders, and learn from the challenges we faced.
What can we expect from AI Squared over the balance of 2023 and into next year?
Harvey: Our primary goal for AI Squared is to continue delivering exceptional value to our customers, with a focus on the financial services sector. We’re committed to optimizing our product to enhance the customer experience and build strong, lasting relationships. As we approach the end of 2023, we are on track to exceed our internal goals, thanks to the dedication of our team.
Looking ahead to next year, we have ambitious plans for growth. We’re preparing to raise our next round of funding with a strategic team of investors who share our vision. This funding will enable us to continue providing world-class service and products. We’re also planning to expand our product offerings and explore new markets. We are excited about the opportunities that lie ahead and look forward to sharing our progress with you!
Launched in the fall of 2021, Merlin Investor is on a mission democratize access to investment strategies. The fintech offers a while label, multi-asset, educational, strategizing and tracking tool that helps investors accomplish two critical goals: building long-term positive results and limiting potentially catastrophic losses.
Merlin Investor’s technology is compatible with all trading platforms. The technology is suitable for both retail and professional traders, and is available for both the desktop and mobile. Merlin Investor enables users to retrieve market data and sentiment from multiple sources and apply that data to a massive range of tailor-made investment strategies.
With offices in both West Palm Beach, Florida, and Lugano, Switzerland, Merlin Investor made its Finovate debut at FinovateEurope earlier this year. The company returned to the Finovate stage in May for FinovateSpring. We caught up with Merlin Investor founder and CEO Guido Petrelli (pictured) this summer to learn more about the company, its mission to democratize access to investment strategies, and what to expect from the company in 2023 and beyond.
What problem does Merlin Investor solve and who does it solve it for?
Guido Petrelli: Merlin Investor was born as an intelligent protection and conscious guide for a more farsighted management of investments aimed limiting potential catastrophic losses while building long term positive results. Thanks to the Merlin platform, retail investors can educate themselves, study the markets, and create and track their own investment strategies to easily understand, balance and diversify investment risks.
In other words, we help and empower a new generation to invest with strategy in mind. This is the key to becoming successful and is the only factor distinguishing between gambling and investing. As we are on a mission to democratize financial inclusion and investment planning, our technology was built to allow anyone, regardless the level of knowledge or experience, to become independent and the one and only master of their own financial future.
How does Merlin Investor solve this problem better than other companies?
Petrelli: In the retail investor space, we see many companies focusing on execution, meaning focusing on the act of buying and selling assets. But executing without evaluating multiple sources of information first, combined with the lack of a diversified and balanced investment strategy, can lead to uncontrolled and unlimited potential losses because of the market’s ups and downs. While it may imply the chance for quick gains, it’s actually not the norm as wealth is usually built over time by managing a positive-sum game.
That’s why from the very beginning Merlin was designed as a complementary product to a trading platform and not as a substitute solution. Merlin Investor addresses the strategic essence of investing while the majority of the competition just focuses on enhancing the trading experience – which is already well supported by several financial institutions in a pretty similar way.
Who are Merlin Investor’s primary customers. How do you reach them?
Petrelli: Our primary customers are financial institutions focusing on educating a new generation of retail investors and offering the possibility to trade different asset classes through their digital banking platforms. We attend multiple fintech events in several countries that are attended by financial institution decision-makers responsible for delivering an innovative and digitalized experience to their clients. We also analyze the markets to identify those prospect clients we believe to be a fit in terms of services and client base. Then we look for the people focusing on retail digital products and platforms and reach out to them to introduce our company and technology. Last, we work to be featured in fintech-specialized magazines having financial institutions as target audience.
Can you tell us about a favorite implementation or deployment of your technology?
Petrelli: We offer our technology as a white-label solution that financial institutions can easily embed into their own digital platforms through API keys, while having the possibility to customize product’s appearance and features. As result, our product is delivered to the final users in the bank’s name and as a sub-section of the same app/e-banking they are already familiar with. Through our B2B partner’s portal, we grant to financial institutions the flexibility to choose from the full Merlin product those asset classes, sections, features, and contents they intend to integrate based on their own specific needs. In this way, they can design a tailored solution and experience for their own clients, while sticking to the overall structure and design of the banking platform they already offer.
What in your background gave you the confidence to respond to this challenge?
Petrelli: In a nutshell, it was the combination of my knowledge around investing and the problem I personally experienced as a retail investor that led to Merlin Investor. In fact, I was just a teenager when I first started to trade. Then I quickly realized that executing trades “per-se” – meaning the simple action of buying and selling assets – is the less strategic and relevant part to achieve long term positive results. Instead, studying different market sources, and then designing a diversified and balanced investment strategy, are what make the difference in the end. Still, (available) banking and trading platforms were not enough to educate me about investing, or to (help me) design and analyze my own investment strategies.
As a result, for years I was forced to create time-consuming and unfriendly spreadsheets to the point where I couldn’t accept it anymore – not in a world like today’s where we have an app for everything we do! At the same time with trading platforms booming basically everywhere, it became more and more clear that a new generation wants to invest autonomously and in the right way. As I couldn’t find any product in the market like the one I envisioned, I decided to create it. And that’s how Merlin Investor was born.
Merlin Investor founder and CEO Guido Petrelli demoing the company’s technology at FinovateEurope this year.
You recently demoed at FinovateSpring and will be demoing your technology at FinovateFall in September. What brings you back?
Petrelli: This year I’ve demoed the Merlin platform at FinovateEurope and FinovateSpring, so FinovateFall will be my third appearance. So far the experience has been great. We have been able to show our cutting-edge technology to major financial institutions in Europe and North America, while receiving much interest and establishing meaningful connections with decision-makers within the banking industry. The high visibility and key connections with prospect clients are the two main factors which bring us back to FinovateFall. The well-organized events and the team at Finovate are also a plus.
What are your goals for Merlin Investor?
Petrelli: Our goal is to be recognized by the major global banks as the innovative partner to work with when it comes to educating and empowering a new generation of retail investors. We focus on establishing solid and strategic partnerships with a limited numbers of players in the banking industry to achieve our mission of democratizing financial inclusion and strategic planning globally, while helping young investors to reach financial independence and to become the masters of their own financial futures.
What can we expect from Merlin Investor over the balance of 2023 and into next year?
Petrelli: We’ll continue to prioritize continuous and never-ending improvement of our technology by looking to upgrade the experience we offer either to financial institutions and to the final users to whom our product is deployed. We will also continue to work to boost our market presence to make the Merlin platform known to more financial institutions serving retail clients in several countries. We will eventually concentrate on scaling the team and operations to be able to manage expectations. We will accomplish all of this without forgetting our mission to make conscious and strategic investing accessible to anyone through strategic partnerships with financial institutions.
Tradeshift is partnering with HSBC to develop embedded finance solutions.
As part of the partnership, HSBC is contributing $35 million to Tradeshift’s $70 million funding round announced today.
There is limited information about the details of the new joint venture between the two parties, but the announcement said more information will be unveiled ahead of the planned launch slated for early 2024.
Supply chain procurements and payments company Tradeshift is teaming up with HSBC to launch a new business. The jointly-owned business endeavor will focus on developing embedded finance solutions and financial services applications.
As part of the partnership, HSBC is investing $35 million in Tradeshift as part of a round that is expected to close at around $70 million. Existing investors AYTK Limited, LUN Partners Group, Fuel Venture Capital, Doha Venture Capital LLC, Notion Capital, IDC Ventures and The Private Shares Fund contributed to the round.
The round will add to the more than $1.1 billion in funding Tradeshift has amassed since it was founded in 2009.
Details about the new joint venture between Tradeshift and HSBC are sparse. The announcement states that the two will “deploy a range of digital solutions across Tradeshift and other platforms” that will include embedded finance tools for trade, e-commerce, and marketplaces. The new business will enable Tradeshift to globally scale its business commerce network that currently sits at one million users.
Tradeshift expects that the HSBC brand will “bring instant credibility and broad appeal” to the new financial solutions. HSBC currently facilitates more than $800 billion in trade each year.
“The world’s biggest trade bank and the world’s largest trade network are joining forces,” said Tradeshift CEO and Co-founder Christian Lanng. “Our deepening partnership with HSBC delivers a strong foundation from which to scale and accelerate our vision of a trade network that creates economic opportunity for businesses everywhere.”
The two will announce more details about the joint venture ahead of its launch, which is expected in early 2024.
“We are very excited to partner with Tradeshift to help businesses and their suppliers trade more smoothly using world-class technology and solutions that the joint venture will deliver,” said HSBC CEO of Global Commercial Banking Barry O’Byrne.
Travis Oliphant, CEO of OpenTeams and venture partner with Quansight Initiate, has announced a strategic partnership with and investment in embedded finance platform ASA. The partnership will connect ASA with the open source community, enabling the company to build solutions and provide expertise in machine learning, and AI strategy and architecture.
“We are impressed with ASA’s commitment to helping fintech entrepreneurs engage more easily with existing banking technology, all while empowering account holders with greater control of their data,” Oliphant said in a statement. “We see strong potential for financial institutions to unleash the power of innovation that can bubble up from open-source communities into fintech solutions. ASA is transforming the industry, and I look forward to collaborating with the team as they grow.”
Terms of the investment were not disclosed. Oliphant and Quansight join former JP Morgan Chase CIO Austin Adams and former BECU CEO Benson Porter among ASA’s roster of investors. The funding adds to the $1.8 million in seed capital ASA raised in 2021.
Data scientist and entrepreneur Travis Oliphant is the creator of Python program language library NumPy, and founding contributor of Python’s SciPy library. Oliphant is also founder of Anaconda (previously Continuum Analytics), open source non-profit NumFOCUS, OpenTeams, and OpenTeams Incubator. Launched in 2019, OpenTeams is an open source solution provider that supports more than 680+ open source technologies.
Founded in 2020, ASA helps financial institutions and fintechs forge productive partnerships. The Utah-based company connects banks and credit unions with fintechs, providing a secure and compliant marketplace that makes it easy for FIs to implement the digital solutions their customers want. Via a strategy it calls collaborative banking, ASA has pioneered a new approach open banking that allows financial institutions to enter these partnerships while at the same time maintaining ownership and control over customer data. This helps remove regulatory risk and liability from the partnership, facilitating collaboration. ASA counts more than 25 community financial institutions, including Pyramid FCU and University Credit Union, and fintechs among its partners.
“We firmly believe that, if approached the right way, embedded fintech has the power to redefine bank and fintech partnerships, and the backing of industry powerhouses such as Travis reinforces the value of our technology,” ASA co-founder and CEO Landon Glenn explained. “Our team is already benefitting from Quansight Initiate’s deep expertise and insights, and we are confidence that we can accelerate the collaborative banking movement together.”
ASA most recently demoed its technology at FinovateFall last September. At the conference, the company showed how its trusted, closed ecosystem offers community banks and credit unions a way to collaborate and deliver the latest fintech innovations to their customers.
We spoke with ASA Head of Fintech Relationships Ryan Ruff at the company’s first Finovate appearance in 2021. In our conversation, Ruff explained the company’s unique approach to open banking. He also discussed how collaborative banking enables FI/fintech partnerships at scale.
PayNearMe has integrated Cash App Pay into its app.
The move allows PayNearMe’s end users to pay their bills using their Cash App accounts.
The native integration helps users make payments within the app without having to manually re-enter their card or bank details.
Cash payments platform PayNearMeannounced it is adding more payment options today by natively integrating with Cash App Pay. The California-based company is leveraging Block-owned Cash App Pay’s technology to allow its users to pay their bills using their Cash App accounts.
“We are excited to be early to market with Cash App Pay, a payment type that is growing in popularity,” said PayNearMe Chief Product Officer John Minor. “By offering Cash App Pay, we’re enabling our clients to provide their customers with more payment options and greater convenience.”
By natively integrating Cash App Pay, PayNearMe’s end users can make payments within the app without having to manually re-enter their card or bank details. The seamless user experience keeps users’ sensitive information secure while enabling them to complete transactions in a few taps. Payments made using Cash App Pay are saved alongside all of the user’s other transactions in a single ledger.
Cash App was founded in 2013 as a peer-to-peer-payment platform. The company has since become a more robust, banking-like platform that enables users to hold funds, spend their money using a QR code or cash, invest, manage their Bitcoin, and file their taxes. It has built up its user base to 53 million monthly active users.
PayNearMe focuses on serving un-and-underbanked populations with its cash-based billpay tools. The company partners with more than 40,000 retail stores, including 7-Eleven, Walmart, and Family Dollar, to allow businesses to offer their users cash payment options.
PayNearMe launched a product called MoneyLine in 2021. MoneyLine allows gaming and sports betting operators to offer a payment gateway, hold deposits, make payouts, and more. Including a fresh $45 million round earlier this year, PayNearMe has raised $118 million in funding since it was founded in 2009.
Digital customer service provider Glia is enhancing its Glia Interaction Platform with a partnership with voice authentication provider Illuma Labs. Glia has integrated Illuma’s voice authentication technology into its customer service platform to help organizations streamline voice authentication for customer service interactions.
Glia anticipates the new addition will not only prevent fraud, but also enhance the customer experience and improve operational efficiency. “Illuma Shield fits seamlessly with the Glia Interaction Platform, adding more efficiency by making voice authentication effortless,” explained Illuma CEO and Founder Milind Borkar. “Our joint customers are experiencing the real value that the Glia and Illuma partnership delivers.”
Illuma Shield is Illuma’s flagship voice biometrics product that integrates signal processing, AI, and machine learning. The technology works in the background to authenticate customers during an interaction and prevent account takeover. Meanwhile, the customer service representative doesn’t need to make unnecessary clicks or spend time on data entry during or after the call. And because the user interface shows up on the agent’s existing screen, they don’t have to open up a different window.
The Glia Interaction platform is comprised of digital, phone, and self-service customer service options. The range of solutions not only provides customers a variety of options when seeking out customer service, but it also offers end users a seamless, omni-channel experience in the event they need to change communication channels.
“Authentication, particularly for phone banking, has traditionally been cumbersome and a major source of friction,” said Glia SVP of Alliances Steve Kaish. “By verifying enrolled customers in the first few seconds of natural conversation with the Illuma Shield software, Glia quickly enables an authenticated interaction, reducing fraud and letting customers focus on their immediate need, be it an account balance, mortgage inquiry or loan origination.”
Glia was founded in 2012 as SaleMove. The New York-based company offers digital communication environments, on-screen collaboration, and AI-enabled assistance tools for clients who need to support end customers online, over the phone, in home office environments, and via video. In total, Glia has facilitated more than 10 billion customer interactions. The company has raised $152 million and counts Envestnet, Deutsche Bank, and United Healthcare among its clients. Glia has taken home 10 Finovate Best of Show awards for its live demos and most recently showcased its tools at FinovateSpring 2021.
Founded in 2016, Illuma seeks to help credit unions boost their brand reputation with a modern and seamless member experience and better security. The Texas-based company has raised $2.5 million. Illuma appeared on the FinovateSpring stage last month in San Francisco with a demo of how it brings passive voice authentication to Glia’s customer service interactions.
Keytrade Bank, the first online bank in Belgium, has turned to Infosys Finacle to modernize its core banking system. Courtesy of the partnership, Keytrade Bank will swap out its legacy platform in favor of the Infosys Finacle suite. This will help the financial institution boost efficiency, accelerate time-to-market for products, and provide a superior experience for customers.
Keytrade Bank CEO Thierry Ternier noted in a statement that the new technology would “future-proof” the institution, and enable Keytrade Bank to “tackle the challenges of a fast-moving environment.” Keytrade Bank will subscribe to Infosys Finacle suite in a SaaS mode on the Microsoft Azure public cloud. This will facilitate the bank’s ability to leverage Finacle’s open API repository on the cloud, enabling easy and seamless integration with ecosystem partners.
Keytrade Bank is part of Credit Mutuel Arkea, one of the largest banking groups in France. The institution offers both banking and investment services to its retail customers, stemming from its origins as an online brokerage. The bank offers a current account with a €0.05 bonus for every transaction, as well as a savings account and a trading account. Keytrade also provides investment plans for as little as €25 euros per month, online portfolio management, and an open architecture funds supermarket with more than 660 funds.
The deployment of core banking technology from Infosys Finacle will help further Keytrade Bank’s development into a full-fledged bank. Founded in 1998 as VMS-Keytrade, the institution secured its banking status in 2002 when it acquired RealBank. Keytrade Bank maintains an impressive array of trading tools, including its professional day-trading and trend trading platform, Keytrade Pro. The company’s partnership with Infosys Finacle gives it the opportunity to bring its banking business up to a comparable level of innovation and service.
“With Finacle, Keytrade Bank has a core banking solution that has proven itself around the world for accelerating innovation, driving automation and operational excellence, and helping deepen customer engagements,” Infosys Finacle Chief Business Officer and Global Head Sanat Rao said. “This collaboration marks yet another milestone in our expanding presence in Europe and underlines our commitment to helping European banks stay ahead in the digital age.”
Headquartered in Bangalore, India, Infosys Finacle has been a Finovate alum since 2009. In the years since, the company has grown into a major digital banking solution provider, and is now a part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys. The company offers solutions for a variety of banking needs including core banking, lending, digital engagement, payments, cash management, wealth management, treasury operations, the blockchain, and more. Banks in more than 100 countries use Finacle’s technology to help a billion people and millions of businesses improve the way they save, invest, borrow, and make payments.
The U.S. Securities and Exchange Commission (SEC) announced today it has charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency; and for failing to register the offer and sale of its crypto asset staking-as-a-service program.
Specifically, the SEC is alleging that Coinbase:
Provides a marketplace and brings together the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interact
Engages in the business of effecting securities transactions for the accounts of Coinbase customers
Provides facilities for comparison of data respecting the terms of settlement of crypto asset securities transactions, serves as an intermediary in settling transactions in crypto asset securities by Coinbase customers, and acts as a securities depository
“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”
Coinbase Chief Legal Officer Paul Grewal, who testified yesterday before the House Committee on Agricultural Services on the new Digital Asset Market Structure Discussion Draft, said in a blog post that U.S. crypto firms are lacking clear rules for operating in the crypto space. In fact, Coinbase has been asking regulators for months to work together to help build regulation around crypto. The fintech has been straightforward that it wants to operate within regulation, but the SEC hasn’t been willing to work with Coinbase to define regulations.
Much of the issue between the two parties hinges on a lack of definition. Coinbase insists that it does not list securities on its platform, while the SEC has called out 61 cryptocurrencies that it believes are securities.
All of this back-and-forth has made two things clear. First, as Coinbase CEO Brian Armstrong explains in a TV commercial, crypto in the U.S. has valuable use cases, and companies need clear rules to operate in the space:
Second, regulators are making it very difficult for U.S. companies to facilitate crypto transfers. Today’s news comes a day after the SEC sued Binance CEO and Founder Changpeng Zhao for operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and for the unregistered offer and sale of securities.
In a tweet earlier today, Armstrong highlighted that the SEC’s suit against Binance is different from its suit against Coinbase. “Btw, in case it’s not obvious, the Coinbase suit is very different from others out there – the complaint filed against us is exclusively focused on what is or is not a security. And we are confident in our facts and the law,” he said.
Regardless of the differences, in my view, the SEC is making examples out of these crypto firms to not only serve as a warning to other companies operating in the crypto space, but to also drive down consumer interest in holding digital assets.
Armstrong also used Twitter to reinforce what his company has been saying for months. “Regarding the SEC complaint against us today, we’re proud to represent the industry in court to finally get some clarity around crypto rules,” he said. “Remember:
The SEC reviewed our business and allowed us to become a public company in 2021.
There is no path to come in and register – we tried, repeatedly – so we don’t list securities. We reject the vast majority of assets we review.
The SEC and CFTC have made conflicting statements, and don’t even agree on what is a security and what is a commodity.
This is why the US congress is introducing new legislation to fix the situation, and the rest of the world is moving to put clear rules in place to support this technology.
Instead of publishing a clear rule book, the SEC has taken a regulation by enforcement approach that is harming America. So if we need to avail ourselves of the courts to get clarity, so be it.”
Digital ID verification (IDV) innovator OCR Labs Global will begin the second half of 2023 with a new identity of its own. The company, which introduced itself to Finovate audiences at our developer’s conference, FinDEVrSiliconValley 2016, announced its rebrand as IDVerse this week.
In a statement, the firm noted that the new name and brand combine a set of key concepts – identity, universality, versatility, and diversity – that underscore the company’s priorities when it comes to developing digital ID verification technology. The rebrand also reflects the company’s growth, technological innovations in the field of identity verification, the evolving regulatory landscape, and mandates for greater financial inclusion.
“With OCR Labs we set out to develop an identity verification solution, from scratch,” company CEO Myers said, “The birth of IDVerse means we’re now ready to go to the next level to make user verification effortless with Zero Bias AI.”
IDVerse’s Zero Bias AI leverages generative AI to train deep neural network systems to guard against bias based on gender, age, and ethnicity. At the beginning of the year, the company announced that its technology had achieved non-bias certification from independent biometric testing laboratory BixieLab. The evaluation included male, female, and transgender subjects, aged 18 to 70 years old, from eight different ethnic categories. The test results revealed no demographic bias and a zero percent error rate for the company’s facial liveness detection solution. “The time has come to refocus efforts on achieving inclusivity to prepare for the future when more people than ever will use identity solutions for everything,” company General Manager International Russ Cohn said, “even ‘unlocking our car with our face’.”
Two months later, the company received certification from the U.K.’s Digital Identity & Attributes Trust Framework (DIATF). This gives the firm the right to serve employers, landlords, HR vetting firms, and other organizations as a compliant Identity Service Provider (IDSP). “Our Zero Bias AI technology eliminates barriers that lead to exclusion,” company Head of Legal, Risk, & Compliance Terry Brenner explained, “so that everyone has access to digital ID systems in society, such as recruitment and right to work, right to rent.”
In addition to the drive for financial inclusion and regulatory mandates, technological innovation is also playing a major role in the company’s transition to IDVerse. Founded as a research entity in 2014, the firm pioneered the deployment of optical character recognition and facial recognition to provide identity proofing and fraud detection on mobile and web platforms. The rise of technologies like synthetic media and generative AI have produced new challenges for fighting fraud. This has encouraged firms like IDVerse to embrace strategies such as identity orchestration that provide a coordinated fraud defense across the entire customer lifecycle.
Today, IDVerse verifies more than 16,000 identity documents in 220+ countries and territories. By matching people with their government-issued IDs, the company helps fight fraud and enables organizations to meet AML and KYC identity verification requirements.
Headquartered in London, Silicon Valley, and Sydney, IDVerse has raised $45 million in funding, according to Crunchbase. The firm’s investors include Equable Capital and OYAK.
NTT Data’s payments arm, NTT Data Payment Services, announced it has teamed up with risk analytics platform Facctum. The India-based payment company will leverage FacctView, Facctum’s anti-financial crime technology.
FacctView will help NTT Data Payments Services detect and assess sanctions, terrorism financing, and money laundering on its e-commerce platforms. In addition to protecting customers, FacctView’s technology also helps firms stay compliant. Because payment service providers are subject to increased regulation as fraudulent incidents increase, many have invested in risk screening capabilities.
“The payments ecosystem is facing a growing threat from financial criminals,” said Facctum Founder and CEO K.K. Gupta. “This is increasing the need for regulatory and compliance countermeasures. Leaders of PSPs have therefore recognized the vital importance of robust and resilient anti-financial crime technology to meet the challenges of regulatory change and ever-changing risks. I am humbled that NTT Data Payment Services has trusted Facctum technology to enhance the effectiveness and efficiency of risk controls.”
Facctum’s FacctView leverages parallel processing technology and relies on a library of risk detection algorithms to detect financial crime risks on a comprehensive scale. FacctView also offers scalable, low-latency batch processing that supports bulk uploads and scheduled batch runs.
“Facctum technology is a great match for the needs of our high-growth and customer-focused PSP business in India,” said NTT Data Payment Services CEO Takeo Ueno. “Its addition to our anti-financial crime defenses shows our commitment to protecting customers and providing the highest standards of compliance effectiveness. This approach extends the capabilities of the business to provide continuous robust compliance whilst also improving the speed of services for customers.”
Facctum was founded in 2021 by former users and architects of financial crime compliance (FCC) technology. The London-based company has operations in Dublin, Johannesburg, Pune, and Bengaluru.
An alum of FinovateFall 2019, NTT Data offers a range of consulting, industry solutions, business process services, IT modernization, and managed services. The Japan-based company has made 26 acquisitions, including NTT Data Payment Services– then known as Atom Technologies. The company is publicly listed on the Tokyo Stock Exchange under the ticker TYO:9613.
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.
