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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Mastercard takes the uncertainty out of digital payments with Smart Payment Decisioning Tools. Advanced data analytics and ML make payments faster, more convenient, and safe.
Features
Better onboarding experience
Reduce ACH returns, failure & fraud
NACHA Verification for WEB debit rule
Why it’s great
Mastercard’s Smart Payment Decisioning Tools reduce risk in ACH payments and optimize cost and speed through open banking.
Presenter
Serenie Gagon, VP Product Management Gagon is an experienced product evangelist with deep expertise in the payments space. Gagon is responsible for strategic vision and payment enablement roadmap through open banking. LinkedIn
FinTech Automation (FTA), an infrastructure-as-a-service platform, announced that it has partnered with Finicity to access consumer data to ensure secure account validation during the account opening process. The collaboration also will drive a transition away from outdated validation methods such as time-consuming micro-deposits.
“Integrating consumer-permissioned data from Finicity’s open banking network streamlines account opening and funding, making it safer, easier, and faster, which reduces account opening abandonment for our customers,” FinTech Automation founder and CEO David Park said. “It’s a great example of how open banking can improve banking and personal financial management offerings and their customer experience at the same time.”
Courtesy of the agreement, FTA customers will be able to connect to their primary accounts in order to fund new investment accounts. FinTech Automation will also be able to use consumer-permissioned data from Finicity’s open banking platform to show customers a more holistic view of their finances that takes into account holdings across multiple financial and wealth accounts. Customers will be able to download and integrate transactions from their wealth accounts into their personal financial management tools.
“Secure account opening is crucial for financial institutions today,” Finicity President and COO Andy Sheehan said. “Open banking data can reduce the friction and mitigate the risk associated with digital account opening. FTA’s integration of Finicity’s open banking platform will further empower consumers to take charge of their financial data and financial futures.”
Headquartered in Dallas, Texas, and founded in 2016, FinTech Automation offers a platform that automates administrative activities, integrates enabling technologies, and supports management with instant data and dashboards. The company’s platform and Acceleration Cloud give businesses the ability to manage APIs, relationships, and methods between workers, clients, and documents in an integrated, fully-compliant fashion. With 30 fintech partners and more than 50 advisory firm clients, FinTech Automation helps SMEs take advantage of innovative new financial technologies.
Finicity has been a Finovate alum since 2014. The company participated in our developers conference, FinDEVr 2021, last year with its VP of Data Science Nick Baguley giving a talk on Connecting Siloed Financial Data: Open Banking’s Impact on the Financial Experience. A few months later, Baguley was recognized by HousingWire in its 2021 Tech Trendsetter Awards for improving income identification and categorization to recognize a broader range of income streams. Also earning plaudits in December was Finicity CEO Steve Smith, who was nominated for Executive of the Year by the Lendit Fintech Industry Awards.
Founded in 1999 by Nick Thomas, Warren Rosner, and Smith, Finicity is based in Salt Lake City, Utah. The company was acquired by Mastercard in June 2020 for $825 million.
FinDEVr, our conference series dedicated to developers in fintech and financial services, is back. We’re saving the final day of FinovateSpring this year to shine a light on the role that developers continue to play in building and applying the technologies that keep fintech at the cutting edge.
Some of Finovate’s most illustrious alums have, in fact, been alums of FinDEVr. Among those at the top of the list are innovators like Plaid. The company, nearly acquired by Visa for more than $5 billion last year, was a big part of one of our earliest FinDEVr events in 2014 where it introduced its “API for Financial Infrastructure” to fintech audiences.
FinDEVr has also served as a platform for innovative fintechs not just from outside of Silicon Valley, but from outside the U.S., as well. An excellent example of this kind of FinDEVr alum is Nubank. Making its FinDEVr debut at our first developers conference on the east coast, FinDEVr New York, in 2016, the Brazilian financial services startup has grown into a major regional neobank and the biggest fintech in Latin America with more than 34 million customers.
For this year’s return, FinDEVr will feature a quintet (or more!) of innovative companies that are busying building tomorrow’s fintech today. Each company will provide both a TECHTalk and an informative workshop to dive deeper into the enabling technologies being discussed. Take a look at our current line-up below, as well as the topics we’ll be talking about.
Connecting Siloed Financial Data: Open Banking’s Impact on the Financial Experience
Join Finicity as they explore the implications of an open financial ecosystem, shifting control to consumers, what the impact is for technologists and developers, and how open banking is being leveraged to improve financial literacy and inclusion. Finicity will follow this with a workshop on how to leverage the power of open banking with a hands-on introduction to their platform. Learn more.
The Tango: Operationalizing Predictive Models, an Engineering and Data Science Collaboration
Instnt will examine the different workflows followed by data science and engineering and discuss why they must come together in the deployment and maintenance of application models. The conversation will be followed by a workshop on rapid feature development and analysis in the identity verification space. Learn more.
Simplifying the complex with an innovative tech stack
LoanPro’s TECHTalk will discuss the importance of a modern and secure technology stack that is cloud-based, uses a configuration first approach, and maintains security throughout the process. LoanPro will follow up with a workshop on how to connect with and build loans via LoanPro’s API in less than 90 minutes. Learn more.
Data for sustainability
What is the relationship between data, sustainability, and financial services? In their TECHTalk Ecolytiq will discuss how their Sustainability-as-a-Service model helps ensure that financial institutions have access to relevant, contextual information at the right time. After the presentation, Ecolytiq will lead a conversation on how to ethically manage different data assets, and how to integrate them into the decision-making process. Learn more.
Scalable fintech product development
How can product development teams keep up with the rapid pace of fintech product adoption while remaining efficient and keeping costs down? Praxent’s TECHTalk will examine this challenge in greater detail and highlight ways to resolve productivity challenges. The workshop afterward will feature best practices for identifying bottlenecks in the development process and how to accurately benchmark your team’s progress. Learn more.
It’s been a tough few weeks for Big Fintech. The Chinese government is dropping the hammer on Ant Group’s IPO. The U.S. Department of Justice is turning up its nose at Visa’sPlaid acquisition.
But, meanwhile over at Mastercard, it is quite the sunny Monday, indeed.
Why? Because the same DOJ that is giving Visa a hard time has granted rival Mastercard the all-clear to pursue its big acquisition: a $825 million deal for real-time financial data and analytics provider Finicity.
“We are pleased to have reached this milestone,” read a statement from Mastercard Monday morning. “The acquisition of Finicity accelerates our open banking strategy and strengthens our ability to offer consumers and businesses more choice in how they pay and how they simplify their lives and maximize their financial relationships.”
Announced in June, the acquisition was heralded by Mastercard as a way for the company to take advantage of global opportunities around open banking. Calling it a “strategically important space,” Mastercard President Michael Mieback said in June that Finicity shared Mastercard’s “commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used.”
Powering solutions from Experian Boost Quicken’s Rocket Mortgage, Finicity offers financial data APIs, credit decisioning technology and financial wellness tools to financial institutions and fintechs. Founded in 2000 and a Finovate alum since 2014, the company won API World’s Finance API of the Year award in 2016 for its TxPush-compliant real-time aggregation service, a technology Finicity unveiled at our developers conference, FinDEVr New York, that year.
In the months since the acquisition was announced, Finicity has continued to innovate and partner with banks and other FIs to help them make better use of their data. Earlier this month, Finicity finalized a data access agreement with BMO Harris Bank. Back in September, in addition to announcing the direct data agreement it forged with Charles Schwab, Finicity launched its next-generation credit decisioning solution, Finicity Lend. The new offering provides banks, lenders, and fintechs with an integrated set of open banking data services that enable borrowers to directly permission data and insights into lending decisioning processes.
“Big news!” Finicity tweeted later this morning. “This DOJ approval brings Finicity one step closer to joining the Mastercard family. It would be an understatement to say we’re excited to become part of Mastercard’s mission to improve financial health and inclusion around the globe.”
Finicity is unveiling a new tool set this week. The new solution, Finicity Lend, promises to accelerate lenders’ decisioning processes by tapping into the power of open banking.
The tools will help lenders with the credit decisioning process by enabling prospective borrowers to permission their data to be used during underwriting. Ultimately, Finicity anticipates the consumer-provided data will offer lenders data in real-time and lead to more accurate decisions.
“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,” said Finicity CEO and Co-founder Steve Smith. “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.”
Along with the data permissioning aspect of Finicity Lend, the toolset offers a host of other capabilities. Among those are Cash Flow Analytics, CRA Data Services, and Payroll Data, which leverage the data intelligence layer of the company’s open banking platform.
Cash Flow Analytics uses an automated process to look at an applicant’s financial account data to glean insights about their cash flow. Finicity has positioned itself as a Consumer Reporting Agency (CRA) to ensure that the consumer-permissioned data meets the legal requirements of the Fair Credit Reporting Act. The move also places more control in the hands of the customer by offering them the ability to review, dispute, and correct any inaccurate information. Finally, the company has added ADP as a payroll data source to enhance its ability to verify income and employment details (with the prospective borrower’s permission, of course).
Placing the consumer in control of their data is one of the core principles of the open banking initiative. Finicity has always been a proponent of open banking. The company is a founding member of the Financial Data Exchange (FDX), an organization that helps establish industry standards for open banking in North America.
Earlier this year Finicity agreed to be acquired by Mastercard for $825 million. The deal has yet to be finalized.
For a year that began with Visa’s headline-making acquisition of Plaid, it seems almost poetic that near 2020’s midway mark, Mastercard would make a major fintech bid of its own.
The company has agreed to acquire Finicity, a real-time financial data and analytics provider and long-time Finovate alum, in a deal valued at nearly $1 billion. This figure represents a combination of the $825 million purchase price of the Salt Lake City, Utah fintech, as well as a potential earn-out for Finicity’s existing shareholders – subject to the company meeting certain performance targets.
“Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organization that empowers consumers and organizations to better understand, manage, and use their financial data to improve their financial lives,” Finicity co-founder and CEO Steve Smith said. “Enabling people to access and control their data, while ensuring best practices to protect that data, will continue to drive tremendous innovation that increases financial literacy, inclusion, and health. This partnership with Mastercard helps us accelerate this mission globally.”
Mastercard President Michael Miebach cited open banking as one of the reasons for the company’s interest in Finicity. Referring to open banking as both a “growing global trend” and a “strategically important space,” Miebach praised Finicity’s ability to leverage open banking APIs to enable financial data and insights to streamline lending and mortgage processes, account-based payment initiation, and other PFM services. He also credited the company for its focus on the data rights of the consumer.
“(Finicity) shares our commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used,” Miebach said.
Founded in 2000, Finicity provides financial data APIs, credit decisioning tools, and financial wellness solutions that help financial institutions and fintechs better serve their customers. The company’s technology helps power solutions like ExperianBoost and Rocket Mortgage from Quicken Loans. Named a Best Place to Work in Fintech by American Banker for the last three consecutive years, Finicity began 2020 partnering with SaaS-based marketing automation, CRM, and POS solution provider for banks and mortgage companies, Volly.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
The new prequalification solution from Finicity will make it easier for lenders to qualify borrowers and improve the quality of the sales funnel for loan officers. The company’s AssetReady Reportleverages consumer-permissioned data to identify a borrower’s assets during the prequalification process. This, as Finicity CEO Steve Smith explained, makes data available to lenders sooner “than ever before,” and paves the way for more personalization and customization in the borrowing process “from first interaction to close.” Finicity said its new offering provides a single-source solution for borrower verification that enhances lender workflow and maximizes ROI.
With the AssetReady Report, lenders will be able to access data like account balances without having to request personal borrower information such as a social security number or date of birth. Once qualified, borrowers can easily permission their data for Finicity’s verification solutions that leverage asset and employment information to continue the loan origination process.
The report features current account balances, as well as average balances over the past two and six months. AssetReady Reports also include any negative balances from the past six months and the most recent negative balance.
In the announcement, Lender Price CEO Dawar Alimi and Union Home Mortgage President and CEO Bill Cosgrove praised the prequalification solution for its ability to deliver “high-value data … earlier in the origination process,” and for its ability to work seamlessly with other Finicity verification solutions. “A single-source solution provider is a great fit for our business model,” Cosgrove said.
Finicity demonstrated its credit decisioning solutions at FinovateFall 2017. Headquartered in Salt Lake City, Utah, the company more recently launched its Verification of Income and Employment (VOIE) offerings which enables lenders to accelerate verifications via bank data and a scan of the borrower’s pay statement. This summer, Finicity introduced its Student Loan Account Verification solution, which helps streamline the verification process for employers who offer student loan repayment assistance programs.
Founded in 1999, Finicity has forged a variety of partnerships this year. The real-time financial data and insights company announced a collaboration with Pulte Mortgage this spring, teamed up with LendingQB over the summer, and last month partnered with American Financial Resources. Finicity has raised more than $79 million in funding from investors including Experian Ventures and Bridge Bank.
Finicity’sAssetReadyReportsAccelerate the Prequal Process.
EnvestnetAddsYodlee FinApps to MoneyGuide’s MyBlocks.
Around the web
PyraMax Bank launchesPyraMax Insurance Services leveraging Insuritas’ digital insurance platform.
Finastra’s new Fusion Treasury Essentialhelps small banks with no dedicated treasury system automate their treasury function.
nCinoappoints David Rudow as Chief Financial Officer.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Finicityannounces collaboration with American Financial Resources to streamline the asset and income verification process during loan origination.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Real-time financial data access and insights company Finicity has unveiled its latest solution to accelerate the lending process and further the trend toward digitization in the mortgage industry. This week, the company launched its Verification of Income and Employment (VOIE) solution, which leverages bank data and a scan, photo, or PDF of the borrower’s pay statement to make borrower verifications both faster and more accurate. In its statement Finicity noted that VOIE is expected to successfully provide coverage of more than 70%. This compares favorably to the accuracy rates of existing automated solutions, which top out near 25%.
Calling Finicity’s VOIE “the new gold standard of income and employment verification,” company CEO Steve Smith suggested the technology would be a significant new resource for lenders. “We know it will be met with fast adoption by key industry players who aim to be on the cutting edge of lending technology,” he said, adding “(with) VOIE building upon our current Verification of Assets solution, lenders will now be able to use Finicity as a one-stop-shop for digital verification.”
Appreciation for Finicity’s VOIE solution has already been heard from the likes of major mortgage industry players such as Freddie Mac, Quicken Loans, and Experian – all of which have leveraged Finicity’s technology to automate the manual processes that have historically made the loan origination experience cumbersome for all parties involved.
Freddie Mac, for example, highlighted the contribution Finicity’s VOIE would bring to its own asset and income modeler (AIM). “(Our) partnership with Finicity has helped to create a waterfall-like approach by adding paystub data to our AIM capability using accurate and verifiable data that meet our underwriting standards,” Senior Director of Technology Integration at Freddie Mac Kevin Kaufman said. “This means more opportunities for representation and warranty relief and greater costs savings for lenders all while delivering a better lending experience to borrowers.”
Quicken Loans EVP of Client Experience Heather Lovier echoed Kaufman’s praise for the technology, referring to VOIE as “a critical next step in the evolution of the mortgage process.”
The news of Finicity’s Verification of Income and Employment solution comes one month after the company introduced its Student Loan Account Verification solution. This technology enables employer repayment programs to access Finicity’s ACH endpoint to confirm the accuracy of accounts and routing numbers when making loan payments on behalf of their employees. Fellow Finovate alum Vault is among the companies to have partnered with Finicity in order to put the technology to work on behalf of employer-based student loan contribution programs.
Founded in 1999 and headquartered in Salt Lake City, Utah, Finicity demonstrated its credit decisioning solutions – including its Verification of Income (VoI) and Verification of Assets (VoA) technology – at FinovateFall 2017. The company has raised nearly $80 million in funding, and includes Experian Ventures and Bridge Bank among its investors.
Earlier this year, Finicity inked a major partnership with Ellie Mae, integrating its Verification of Assets solution into Ellie Mae’s Encompass Digital Lending Platform. This makes Finicity’s technology available to the more than 230,000 users and thousands of providers who, as part of Ellie Mae’s partner network, process “approximately one-third” of all the residential loans originated in the U.S.
FICO and risk investigation solutions provider Arachnys partner to help FIs improve their client onboarding and record management processes.
Bill.comcelebrates grand opening of new Houston office.
Finicityships new Verification of Income and Employment (VOIE) solution using TXVerify technology.
SecureKeycollaborates with Digital Bazaar to streamline organizational identity proofing.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
