Finovate Global

Finovate Global Nigeria: Trust and the Challenge of Digital Transformation in Banking

Finovate Global Nigeria: Trust and the Challenge of Digital Transformation in Banking
By David Penn Posted on
Categories: CEO Interview, Finovate Global

Formerly known as TeamApt, Moniepoint is the largest business payments platform in Nigeria. The company processes $170 billion in annualized total payments volume (TPV), and became QED Investors’ first investment in Africa last year.

Headquartered in London, with offices in Nairobi and Lagos, as well as the U.S., Moniepoint was founded in 2015. The company counts more than 600,000 businesses large and small among its customers. Moniepoint has been recognized by the Central Bank of Nigeria as the most inclusive payment platform in the country, and was named the second-fastest growing company in Africa by the Financial Times.

We caught up with Tosin Eniolorunda (pictured), founder and CEO of Moniepoint, to discuss the state of fintech in Nigeria and what Moniepoint is doing to help provide better financial services to businesses and communities in Africa.

In our extended conversation, we discuss challenges to digital transformation in the region, the evolution of Nigeria’s cashless economy, and what to expect in the wake of Moniepoint’s recent rebranding.

What problem does Moniepoint solve and who does it solve it for?

Tosin Eniolorunda: Moniepoint solves the problem of fragmented, inaccessible, and low-quality financial services for businesses in emerging markets.  It is a full-service business banking platform seeking to provide all the digital financial services a typical business needs.

Moniepoint specifically provides businesses in emerging markets with banking, payments, credit, and business management tools to help them grow. Our motivation is to power business dreams and create financial happiness for our customers. We recognize the importance of businesses in driving economic growth. By powering the profitability and operations of these businesses, we hope to enable them to make significant contributions to the economy at large.

To date, we have powered the dreams of over one million businesses who support local communities up and down Africa.

Your company began the year with a rebrand, transitioning from Team Apt to Moniepoint. What was the significance of this decision?

Eniolorunda: The company, TeamApt, started as a service provider, and our name was aptly selected. The team providing these services was the heart of our solution. As the company grew, our flagship product – Moniepoint – became ubiquitous in the market, and it became necessary to bring everything together to push the whole brand forward. We had become the point for people’s money, and it was only right we took up that name.

We know top talent is highly sought after in the global fintech industry, which is why we wanted to show our commitment to embracing the best and brightest by going out into the world in our choice of headquarters. By being more globally oriented, we want to be recognizable as an employer of choice for talents around the world.

What is the financial services industry like in Nigeria? And what is its relationship with the fintech ecosystem?

Eniolorunda: The financial services industry in Nigeria is generally a collaborative one. The Central Bank of Nigeria drives policy change in collaboration with all players in the industry – traditional banks and fintech players – all geared towards a more financially inclusive ecosystem. An example of how this plays out is fintechs working with traditional banks as their settlement partners, and traditional banks providing virtual account solutions to fintechs so they can, in turn, provide digital wallets to their customers.

It’s also recognized that fintechs take a generally technology-first approach to financial solutions, and regulations exist to make this as seamless as possible.

You have said that “low-trust” is an impediment to digital transformation in Africa. Can you elaborate on this challenge and what is necessary to overcome it?

Eniolorunda: Financial education is particularly important to gain trust and support for digital transformation, as people generally are wary of what they do not understand. In societies with a large percentage of uneducated people, it is expected that they will push back on innovation that promises to make their lives better.

For example, if a digital bank wants to provide nimble convenient services, it might decide not to have physical branches or a call centre to manage costs. However, low-trust means that these communities of people want to see a person or hear from them in order to leave their monies in the bank.

We overcame this barrier by approaching these markets using a hybrid distribution method – via collaboration with local people they could identify. When they got introduced to these digital solutions by people they knew and saw in their neighborhoods, it became easier for them to trust these products and try them out.

This spring there were a number of headlines about the “cash crisis” in Nigeria. Can you tell us about this and how the crisis impacted Moniepoint?

Eniolorunda: In March 2023, as part of its effort to aid in adopting cashless means of payments, combat inflation and prevent fraud, the Central Bank of Nigeria started a redesign of the Naira, Nigeria’s currency. People had to turn in their old notes as they were no longer legal tender, and the consequence of this process was a reduced availability of cash and, by extension, increased reliance on digital payments.

Moniepoint began to focus on supporting businesses in April 2022, extending our banking and payment tools to them. Consequently, during this cash crunch, we were well-placed to provide these businesses with the tools they needed to accept digital payments and stay afloat.

As a result, we saw a surge in transactions during this period. We adjusted our platform to make it more reliable, helping us to keep supporting these businesses.

What role will Moniepoint play in an increasingly cashless economy in Nigeria and other parts of Africa?

Eniolorunda: By being a banking partner for businesses, we enable them to receive payments digitally, which is very important in Africa’s journey towards becoming a cashless economy. In 2022, we helped businesses process over $170 billion, and are continuing this positive trend in 2023.

We are determined to stay at the forefront of the digital revolution. Initial efforts across the continent have been focused on providing individuals with access to digital financial services, giving them cards and other means to pay digitally. It’s not enough for customers to be empowered to pay digitally; the businesses have to be equipped with the education and resources to receive these payments.

When businesses are able to receive these digital payments directly, cash becomes less central to every transaction, and we’re collectively closer to a cashless ecosystem.

There has been talk in the fintech press about Moniepoint and potential acquisition opportunities. Is the company actively looking to make significant acquisitions?

Eniolorunda: Yes, the plan is to make significant and strategic acquisitions that align with our overall goal of providing an all-in-one financial platform for businesses in emerging markets. These acquisitions allow us to expand our product suite or enter new markets.

Also recently Moniepoint announced a partnership with Google Cloud. Why did Moniepoint pursue this partnership, and what will the partnership help Moniepoint accomplish?

Eniolorunda: As we grew bigger and faster, it was important that financial transactions on our platform could be performed at light speeds, so adopting a hybrid cloud strategy was key for us.

Some of the tools include Cloud Spanner and Kubernetes, which help us to manage and process high volumes of transactional requests per minute, with no lag time.  A partnership with Google Cloud ensures we can use their services with personalized support that the scale of our business needs.

What can we expect from Moniepoint in the second half of 2023 and into next year?

Eniolorunda: We are proud to have already been be recognized this year as not just Africa’s largest fintech, but also its fastest-growing. But this is only the beginning.

We have so much in store for the second half of 2023, including plans for a new product and to enter new markets. Watch this space.

Photo by McBarth™ Obeya

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Finovate Global Japan: Fintech Challenges, Neobank Milestones, and Funding SMEs

Finovate Global Japan: Fintech Challenges, Neobank Milestones, and Funding SMEs
By David Penn Posted on
Categories: Alumni News, Daily news, Finovate Global

When we think of fintech in Asia, China often comes quickly to mind, as do Singapore, Hong Kong, and a few other places. But Japan? Not so much.

Why is this so? One of the more interesting reads on the topic of fintech in Japan that I’ve come across is a Deloitte study Japanese Fintech in the Global Context. In the report, Deloitte Tohmatsu Consulting Social Impact Director Yasuyuki Ogyu explains some of the challenges that prevent Japan from having the sort of fintech industry we see in countries like the U.S. – or neighbor and rival China.

Ogyu notes that Japan has “a favorable B2C market environment.” Unfortunately, the country also has a “rock-solid yet inflexible financial infrastructure.” This has made investors hesitant to commit capital to new financial services businesses for fear that the return of investment would be low and slow compared to other opportunities in the region. Ogyu shows how, in contrast to the U.S., the high level of quality demanded of Japanese IT systems makes them “ill-suited (in terms of speed and cost) to new initiatives like fintech.” Comparisons between API laws in the U.S. and Europe compared to Japan show that there is still a great deal of work to be done educating the public on the value of “services that utilize personal data.”

Check out the full report. Deloitte’s study is an interesting look at the relationship between fintech innovation and the incumbent Japanese financial services industry. The report also provides a handful of recommendations that might help fintechs make greater inroads in the country.

That said, what are some of the more interesting developments on the Japanese fintech scene of late?

Just a few months after securing a deposit-taking license and one month after going live with its mobile app, Japanese digital bank Habitto announced that it surpassed 12,000 downloads. Habitto has also received more than $922,500 (¥130 million) in new deposits over the past month. But the download milestone news almost was overshadowed by a report that the neobank had opened a new office in the fashion district of Cat Street Uruhara.

Habitto co-founder and CEO Samantha Ghiotti explained. “Despite being a mobile-first finance brand, we still believe that it’s essential to connect with customers at ground level and with a human approach,” Ghiotti said. “Trust in financial brands is built over time. We can only achieve this trust through a combination of positive customer experiences both on mobile and face-to-face.”

Ghoitti and Chief Creative Officer Liam McCance founded Habitto in 2021. The Tokyo-based neobank offers an interest rate of 0.3% on deposits up to ¥1 million as well as a Visa debit card. The company’s mobile app includes free financial advice, personalized money plans, and in-app chat and video call services. Habitto has raised a total of $7.3 million in funding from investors including Saison Capital and Cherubic Ventures.

Turning to the B2C end of the country’s fintech sector, we note that Olta, a Japanese fintech that helps SMEs secure funding, has raised $17.8 million in funding. The investment in the Tokyo-based fintech takes the company’s total capital raised to more than $60 million. A sizable number of investors participated in the Series B round. These investors include SBI Investment, Spiral Capital, DG Ventures, WingArc 1st, AG Capital Delight Ventures, Tottori Capital, Nobunaga Capital Village, BIG Impact, and Aozora Corporate Investment.

Olta was founded in 2017. The company provides cloud-based factoring services for the procurement of funds to meet short-term funding needs without resorting to debt. Olta’s role in supporting small businesses during the COVID pandemic was highlighted by Nikkei Asia in the spring of 2020. One meat wholesaler described how he was able to convert several hundred thousand yen in accounts receivable into cash using Olta’s services.

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Andrey Grushnikov

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Finovate Global: Capitalise.ai in Dubai, Cashless in Egypt, Accelerating Women in Tech

Finovate Global: Capitalise.ai in Dubai, Cashless in Egypt, Accelerating Women in Tech
By David Penn Posted on
Categories: Capitalise, Finovate Global, Marqeta, Nubank

Standard Chartered has teamed up with Dubai International Financial Center (DIFC) to launch the fifth cohort of Women in Tech accelerator program. The program is designed to empower female entrepreneurs in the UAE’s technology sector, and encourage innovation, diversity, and economic development. Participants in the program receive training, workshops, mentorship, and access to seed capital. Applications to join the accelerator can be submitted up until the end of July. Ten startups will be chosen to participate. The program ends with a demo day in October, giving each of the startups the opportunity to present their business model to a panel of industry thought leaders and experts, as well as potential investors. The top three startups in the program will be awarded a total of $100,000 in non-equity seed capital.

“By joining forces with DIFC Innovation Hub, we are also taking significant strides toward building a more inclusive and thriving tech ecosystem that supports women-led startups and harnesses the diverse talents and perspectives of women, ultimately shaping a brighter future for all,” Standard Chartered UAE CEO Rola Abu Manneh said.

Eligible companies must have a gender-diverse team. This includes a minimum of one female co-founder. Companies must demonstrate an innovative and scalable solution, as well as the technology’s sustainable impact. The program is for UAE-based startups only.

CFI Financial Group has partnered with Finovate Best of Show winner Capitalise.ai to bring AI-enabled, automated trading to clients in the Middle East. Capitalise.ai leverages code-free automation to enable traders and investors to implement their trading strategies more accurately and reduce human error. Capitalise.ai’s platform enables traders to plan trades in advance as well as take advantage of preset trading strategies. The platform then automatically executes trading decisions based on parameters decided in advance by the trader. This helps ensure that the trades taken are both timely and accurate.

In addition to executing trades, the Capitalise.ai platform also monitors the market for potential trading opportunities based on pre-set parameters. The platform notifies users when specific market conditions line up with their trading strategies, alerting them to potential opportunities in the market.

Capitalise.ai co-founders Shahar Rabin (Chief Product Officer) and Amir Shiovich (Chief Executive Officer) at FinovateSpring 2017.

“We are excited to introduce Capitalise.ai as a game-changer in the MENA trading landscape,” CFI Financial Group co-founder and MD Hisham Mansour said. “By offering this code-free AI trading technology, we are empowering our clients with the ability to automate their trading strategies effortlessly.”

Founded in 2014 and headquartered in Tel Aviv, Israel, Capitalise.ai demoed its trading automation technology at FinovateSpring 2017, winning Best of Show. In the years since then, Capitalise.ai has forged partnerships with crypto spot and regulated futures market ErisX, accounting software company Clear Books, U.S. spot FX trading platform Forex.com, and CFD/Forex broker AvaTrade. Capitalise.ai has raised $10 million in funding, and includes Poalim Equity and Binance among its investors. Amir Shiovich is co-founder and CEO.

Egyptian cashless payments app Flash secured $6 million in seed funding. The round was led by Addition, and featured participation from Flourish Ventures as well as other angel investors. The company will use the capital to accelerate product development, as well as customer and business acquisition in Egypt. Additionally, Flash has secured approval from the Central Bank of Egypt – in partnership with Banque Misr – to serve as a technical payment aggregator.

Flash gives consumers and businesses a cashless payment option via a scan-and-pay service. By adding their existing bank card or digital wallet to the Flash app, consumers can make purchases using their phones simply by scanning the QR code provided by the business. Flash enables businesses to accept payments from consumers directly without requiring point-of-sale (POS) systems or complex technical integrations.

Uber alumni Erik Gordon and Sherine Kabesh founded Flash in 2021. “Our mobile application removes transactional challenges for businesses looking for an easier solution than the POS,” Gordon said. “Our goal is to make payments easier, safer, and faster for everyone. We are also excited to be releasing new features to help consumers make better spending decisions.”

Here is our look at fintech innovation around the world.

Asia-Pacific

  • Stag, a financial education-related startup based in Vietnam, raised $600,000 in seed funding from Viet Capital Ventures, NH Securities Vietnam, and Singapore-based Resolution Ventures.
  • Hong Kong-based fintech Eddid Financial signed an agreement with Malaysian fintech MPAY establishing a joint venture to boost fintech expansion in Malaysia.
  • South Korean fintech U Fintech Hub secured $4 million in funding in a round led by Forest Partners.

Sub-Saharan Africa

  • Ten Southern African fintech startups received grant funding from the World Bank as part of the Fintech Challenge initiative of the Southern Africa Innovation Bridge Portal.
  • African paytech Flutterwave launched a new payment solution, Tuition, to enable users to pay for educational fees using local currencies.
  • Global Brands Magazine recognizes Access Bank Mozambique as “Best Banking Brand” based on customer service, satisfaction, and digital innovation.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

  • Marqeta announced an expansion to Brazil.
  • International remittance company Viamericas Corporation launched new program with Guatemala-based financial organization Banco GyT to promote financial inclusion for people with severe disabilities.
  • Brazilian fintech EBANX partnered with Nubank to help the company launch a new alternative payment service, NuPay.

Photo by Nextvoyage

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Finovate Global Brazil: Visa Acquires Pismo, Open Co Merges with BizCapital

Finovate Global Brazil: Visa Acquires Pismo, Open Co Merges with BizCapital
By David Penn Posted on
Categories: Finovate Global

In some of the biggest news in international fintech of late, credit card leader Visa announced that it is acquiring Pismo, a Brazilian payments infrastructure company. Visa is paying $1 billion in cash for the firm, making the transaction one of the largest of its kind in the fintech industry this year.

“At Pismo, we aim to enable our clients to launch cutting-edge payments and banking products within a single cloud-native platform, regardless of rails, geography or currency,” Pismo CEO and co-founder Ricardo Josua said. “Visa provides us unrivaled support to expand our footprint globally and help shape a new era of banking and payments.”

The acquisition is subject to regulatory approvals and standard closing conditions. The transaction is expected to be completed by the end of this year. Pismo will retain its current management team, post-acquisition. The company also insists that it will remain both rail and network agnostic, and that it will continue to offer all of its current products including banking, cards, and loans.

The deal will enable Visa to offer core banking and issuer processing capabilities across debit, prepaid, credit, and commercial cards for clients through cloud native APIs. Access to Pismo’s platform will also give Visa the ability to offer both support and connectivity for a variety of emerging payment rails – such as Brazil’s instant payments platform, Pix – for its financial institution clients.

Founded in 2016, the São Paulo–based fintech processes nearly 50 billion API calls a year and $40 billion in transaction volumes. The company powers more than 40 million issued cards and nearly 80 million accounts. In addition to serving customers throughout Latin America, Pismo is active in the U.S., Europe, India, Southeast Asia, and Australia. The fintech’s customers include banks and financial services firms like Brazil’s Itaú and Citi, as well as fintechs such as Revolut, N26, and Nubank.

The merger between Brazilian alternative lender Open Co and SME working capital provider BizCapital may not have produced as much fanfare as Visa’s acquisition of Pismo. But the combination is a boon for small businesses in Brazil, which will benefit from a new player in the B2B space with $104 million (R$ 5 billion) in unsecured credit operations for both individuals and small firms.

Interestingly, the merger was accomplished without the participation of financial capital and instead involved an exchange of stakes. Open Co CEO Sandro Reiss noted that the fact that the two companies have never been in direct competition, their “courtship had been going on for some time now.”

Open Co was launched in 2021, the product of a merger between online lender Geru and Rebel, a company that leveraged AI and bank account data to asses customer risk and financial health. BizCapital was founded in 2016 as a lender to SMEs that struggled to access funding via the country’s larger banks. Open Co serves approximately 10 million individuals; BizCapital serves more than one million small businesses.

Here is our look at fintech innovation around the world.

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

  • Nigerian invoice financing company Zuvy raised $4.5 million in combined debt and equity funding.
  • South Africa will require cryptocurrency exchanges in the country to secure licenses by year end.
  • African superapp Ayoba teamed up with Adanian Labs to launch accelerator program in Nigeria.

Central and Eastern Europe

  • Papara, a neobank based in Turkey, acquired Spanish neobank Rebellion.
  • Belgian fintech Curvo secured €500,000 in seed funding.
  • Germany’s Mambu expanded its partnership with the Google Cloud Marketplace.

Middle East and Northern Africa

  • FinMont, a global payment orchestration platform, partnered with Israel-based chargeback mitigation specialist Justt.
  • Monaco-based payment solution provider YowPay unveiled its SEPA instant credit transfer payment solution for Eurozone merchants.
  • Bahrain-based fintech Infinios announced a partnership with U.S.-based cybersecurity firm Secureworks.

Central and Southern Asia

  • MyShubhLife, an embedded finance platform based in India, forged a partnership PayWorld.
  • Profit by Pakistan Today profiled Electronic Money Institution (EMI) SadaPay.
  • HSBC launched its Global Private Banking offering in India.

Photo by Florencia Potter

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Finovate Global Colombia: Innovations in Payments Security and the Blockchain

Finovate Global Colombia: Innovations in Payments Security and the Blockchain
By David Penn Posted on
Categories: Entrust Datacard, Finovate Global, MasterCard, Ripple, VISA

This week’s edition of Finovate Global looks at recent fintech news from Colombia.

The largest Spanish-speaking country in South America, Colombia is located in the northwest corner of the continent. With a population of more than 52 million, Colombia has the third largest economy in South America and the fourth largest in Latin America. More than 11 million people live in the country’s capital city of Bogota.

Earlier this year, the Colombian government indicated its support for open banking and open finance. Specifically, the government included the establishment of an open banking scheme as part of its National Development Plan. The fact that the current government endorsed an initiative that began with the previous administration was seen as an especially constructive sign for the future of open banking and open finance in Colombia.

One way to keep up with fintech news from Colombia is via Colombia Fintech. With information in both Spanish and English, Colombia Fintech is an association of fintech companies based in Colombia. The association provides news on Colombian fintechs, updates on relevant developments on the government and regulatory front, as well as opportunities for networking. Colombia Fintech counts more than 240 members in its community. The association was formed in 2016.

As for recent Colombian fintech news, Bogota-based payments and data security company Intexus announced a partnership with security software company Entrust this week. Intexus will use Entrust’s digital card and instant issuance technology to support its card-as-a-service solution. The partnership is designed to enable banks and credit unions in Latin America to benefit from a unified payment card program.

“We have long been in the digital era and today’s consumers are accustomed to having resources at their fingertips instantaneously,” Intexus CEO David Rojas said. “Our partnership with Entrust allows us to simplify payment enablement for our bank and credit union customers throughout Latin America so they can focus on building relationships with their cardholders and members.”

Intexus serves clients in eight Latin American countries and issues more than 100,000 cards a month. The company was founded in 1997. Entrust provides solutions to help businesses offer trusted experiences for identity, payments, and data. Founded in 1969, the company has been a Finovate alum since 2015 when it presented its technology as part of our developers conference, FinDEVr SiliconValley.

Speaking of partnerships between Finovate alums and Colombian financial interests, we also learned this week that Ripple has entered into a new collaboration with the country’s central bank. As reported in CoinDesk, Banco de la República will test the effectiveness of Ripple’s CBDC platform to enhance Colombia’s high-value payments system. The pilot is being conducted in partnership with the country’s Ministry for the Information and Communications Technologies (MinTIC). Spanish blockchain company Peersyst Technology is also participating.

The goal of the project is to demonstrate the platform’s ability to improve the speed and reduce costs for large scale, wholesale payments, RTGS systems and similar operations, Joe Vollono, a director of CBDC business development at Ripple indicated. The project is scheduled to continue through the end of the year, and is being conducted in a controlled environment without compromising public resources.

As noted in The Paypers coverage of the announcement, Ripple previously partnered with Colombia last year to put land titles on the blockchain as part of a land redistribution program. Peersyst Technology was also a part of this initiative to permanently store and authenticate property titles on Ripple’s public blockchain.

Founded in 2012, Ripple made its Finovate debut as OpenCoin at FinovateSpring the following year. Rebranded as Ripple in 2015, the company has since grown into an innovative payment protocol and exchange network. Use cases of the company’s technology range from cross-border payments to crypto liquidity to CBDCs. Ripple’s customers include Novatti, Modulr, and Siam Commercial Bank. Chris Larsen is CEO.

Here is our look at fintech innovation around the world.

Central and Southern Asia

Latin America and the Caribbean

  • Ripple announced a collaboration with the Central Bank of Colombia
  • Citi Treasury and Trade Solutions teamed up with Brazil-based banking and payments software company Pismo.
  • Security software company Entrust partnered with Colombia’s Intexus to enhance payments for banks in Latin America.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

  • PKO Bank Polski unveiled a new system of valued-added services (VAS).
  • Austrian fintech Vipaso (Vienna Payment Solutions) teamed up with Visa to launch a new app, ViennaPay.
  • France’s Market Pay agreed to acquire Poland-based payments technology company Novelpay.

Middle East and Northern Africa

Photo by Santiago Boada

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Finovate Global Germany: Sustainable Investing for Families and Embedded Lending for SMEs

Finovate Global Germany: Sustainable Investing for Families and Embedded Lending for SMEs
By David Penn Posted on
Categories: Finovate Global, Klarna, Nubank, Token, Wise

This week’s edition of Finovate Global takes a look at recent fintech developments in Germany.

German fintech Bling launched its SavingsTrees solution this week. The new offering helps German families invest sustainably starting with as little as €1 a month. The solution is offered in partnership with wealthtech Evergreen, and represents an evolution in Bling’s product line, expanding from its origins as a family money management educational app and prepaid card.

“Simplicity and sustainability were paramount in the development of our investment offering,” Bling CEO and co-founder Nils Feigenwinter explained. “We prioritize families in our product development to offer a tailored solution that meets their needs. Everyone underestimates the market potential of families, which is why banks have neglected this area for decades. With Bling, we are addressing this.”

Cost savings was one of the reasons why Bling reached out to Evergreen. Cost is also one of the main reasons why more than 80% of German parents do not invest in the country’s capital markets, according to Bling. The complexity of investing and a lack of knowledge about investment products also have contributed to this lack of participation. To this end, Bling leverages visualizations and explanations from finance experts to make the investment process easier to understand.

Funds invested in SavingsTrees are globally diversified and are allocated specifically to sustainable investments. Direct investments in sustainable projects and companies, are available, as are investments in funds that support sustainability initiatives.

Read more about Bling in this TechCrunch profile from December.

Banxware, an embedded lending technology provider headquartered in Germany, has teamed up with Netherlands-based Rabobank to help SMEs secure the financing they need in order to grow. Rabobank will take advantage of Banxware’s embedded lending solution, which enables businesses to apply for short-term financing in as little as 15 minutes. After approval, funds can be available in the borrower’s account within 24 hours.

“This partnership brings Embedded Financing products tailored to the need of SMEs to popular business platforms,” Banxware CEO Miriam Wohlfarth said. “Together with Rabobank we now provide the full financing supply chain, including funds and end-to-end loan management to bridge cash flow shortfalls before they become an issue.”

The deployment will let business founders and owners apply for financing in familiar, everyday digital environments such as e-commerce platforms and booking software. Each firm will focus initially on marketing the solution in their home markets of Germany and the Netherlands, respectively.

Banxware’s partnership announcement follows news that the Berlin-based fintech had teamed up with liquidity management and financial planning company Agicap. Based in France, Agicap helps businesses automate, manage, and forecast their cash flows. Via its strategic partnership with Banxware, Agicap will add access to quick and tailored growth capital to its liquidity management offering.

“From now on, (SMEs) can not only see and manage their cash flows in a centered way, but they can also get new money when there are opportunities for growth,” Agicap Country Manager DE Stephan Krehl said.

Founded in 2020, Banxware is headquartered in Berlin. The company has raised $15 million (€14 million) in funding from investors including Varengold Bank and Element Ventures.

Finovate is proud to showcase fintech innovations from companies headquartered in Germany. This includes hosting our annual European fintech conference in Berlin in 2020.

Here’s a quick list of some of the Germany-based companies that have demoed their fintech innovations on the Finovate stage over the years.

  • aixigo
  • ayondo
  • Bitbond
  • BörseGo 
  • Cash Payment Solutions
  • Coconet
  • collectAI
  • Device Ident
  • Ecolytiq
  • figo
  • Fincite
  • FinTecSystems
  • Fintura
  • HAWK:AI
  • iBrokr
  • IND Group
  • Kreditech
  • Mambu
  • Modifi
  • NDGIT
  • Nextmarkets
  • Open Bank Project (OBP)
  • payever
  • Payworks
  • Pockets United
  • Risk Ident
  • Scalable Capital
  • Smartify.it
  • SOFORT
  • SwipeStox
  • TeamViewer
  • TESOBE
  • Vaamo
  • YUKKA Lab

Here is our look at fintech innovation around the world.

Middle East and Northern Africa

  • Egypt-based fintech Axis launched its new digital payments platform, AxisPay
  • Dubai Islamic Bank launched its DIB ‘alt’ product, a new digital umbrella brand for the bank’s digital offerings.
  • UAE-based B2B fintech solutions provider FOO introduced its prepaid travel card and white label digital wallet.

Central and Southern Asia

  • India-based digital lender Lentra raised $27 million in a Series B extension round.
  • BNE Intellinews profiled Uzbekistani SME lender, Oasis.
  • India’s PayU partnered with Visa and Yes Bank to launch its Business Payment Solution Provider program.

Latin America and the Caribbean

  • Argentina-based mobile banking company Uala launched a new saving account offering in Mexico.
  • Brazil’s Nubank reached one million accounts in Mexico milestone in one month.
  • Lanistar introduced crypto trading on its app for users in Brazil.

Asia-Pacific

  • Singapore-based B2B payment infrastructure platform Thunes raised $60 million in Series C funding.
  • International payments software provider OpenWay launched a second hub in Vietnam.
  • Wise platform inked its first Japanese partnership, teaming up with GMO Aozora Net Bank.

Sub-Saharan Africa

  • Nigerian fintech Flutterwave forged a partnership with account-to-account (A2A) payments company Token.io.
  • International payment solutions company Unlimit secured license to operate in Kenya two months after expanding to Nigeria.
  • Harvard Business Review asked and answered the question “What African Fintech Startups Can Teach Silicon Valley About Longevity?”

Central and Eastern Europe

  • Klarna brought its Pay in 3 offering to Romania this week.
  • German identity verification company IDnow added automated document liveness capabilities, financial risk checks, and more to its platform.
  • International development agency USAID partnered with Albanian business solutions provider CBS to launch, Lores Plus, a platform to help Albanian SMEs get access to financing.

Photo by javier gonzalez

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Finovate Global Estonia: Talking Conversation Intelligence and Automation with Ender Turing

Finovate Global Estonia: Talking Conversation Intelligence and Automation with Ender Turing
By David Penn Posted on
Categories: CEO Interview, Ender Turing, Finovate Global, Interview

This week’s edition of Finovate Global takes a look at one of the innovative fintech companies headquartered in Estonia: Ender Turing. The firm, which specializes in voice conversation intelligence and automation, made its Finovate debut earlier this year at FinovateEurope in London.

Headquartered in Tallinn, Ender Turing was founded in 2020. The founding team consisted of two AI researchers with experience in automatic speech recognition and natural language processing (NLP), as well as a third member with experience in enterprise-level call center software. Together, the team formed Ender Turing and have since launched Ender Turing AI Speech Analytics. The new solution automatically analyzes and assesses the communication content between financial institutions and their customers. This helps FIs enhance the customer experience, as well as meet quality guidelines and compliance requirements in areas such as customer service, sales, and debt collection.

We corresponded with Ender Turing CEO Olena Iosifova via email. Below are her responses to our questions.

Read more about fintech in Estonia in this Finovate Global column from earlier this year.

What problem does Ender Turing solve and who does it solve it for?

Olena Iosifova: Eight hundred million voice conversations are recorded daily in Europe and many more worldwide. A tiny 1% of these conversations are checked for quality control, employee training, and business results improvement. Ender Turing is a conversations intelligence and automation platform to close 99% of the conversation gap for business growth.

Our daily business users are customer service, sales, and collection departments. But marketing and product teams also get value from making client’s research right on our platform.

How does Ender Turing solve this problem better than other companies?

Iosifova: Ender Turing created the fastest-to-value platform that performs in 24 languages. We use a proprietary speech-to-text engine to fine-tune models for every client to achieve the highest accuracy. Our machine learning pipelines are very efficient, and we can fine-tune speech recognition for free.

Also, the user interface does all the system setup for reaching business KPIs. There is no need to wait for the time slot at the IT department to help a business unit make it.

Who are Ender Turing’s primary customers? How do you reach them?

Iosifova: Our primary customers come from financial industry. These are banks, debt collection firms, and other financial services companies. But we also have clients in the public sector and in healthcare.

Direct outreach is our main channel of getting noticed by potential customers – as well as our partnership network. We cooperate with system integrators and call center software vendors and offer added value to their customer base.

Participation in conferences serves as a great supporting touch.

Ender Turing CEO Olena Iosifova demoing Ender Turing AI Speech Analytics at FinovateEurope 2023.

Can you tell us about a favorite implementation or deployment of your technology?

Iosifova: We have two great examples of our technology implementation. One is OTP Bank, and another is Creamfinance Group.

In OTP Bank it started with the call center customer service department. One month after we started, the debt collection department joined, seeing great results. OTP Bank saw hundreds of hours of saved time every month for quality management, employee training, and improved conversion rates – results we mutually enjoy.

With Creamfinance Group, the best indicator of great business results is that after implementation in their headquarters in Poland, we now serve also their offices in Spain, Mexico, and the Czech Republic.

What in your background gave you the confidence to respond to this challenge?

Iosifova: Three founders in Ender Turing have positive experience and skills in artificial Iitelligence R&D, business management, and a passion for building highly performing teams. We enjoy analyzing our potential customers’ strategies and market trends to foresee the challenges they might face in the next three to five years. With constant innovations inside our R&D, we build our product to deliver value for today and the future.

What is the fintech industry like in Estonia? How do traditional financial institutions treat Estonian fintechs?

Iosifova: Apart from the big name in fintech, Wise, coming from Estonia, other exciting fintechs are growing here. To name a few – Grunfin, Scrambleup, Tuum, Salv, Montonio.

They partner with traditional financial institutions actively. For example, LHV Bank is the best client of Tuum. And Salv is the AML solution that works exactly in a traditional financial services market.

You recently demoed your technology at FinovateEurope in London. What was that experience like?

Iosifova: This is truly an international event where we met companies from all over the world. This was a pleasant surprise. We will participate again.

What are your goals for Ender Turing?

Iosifova: Our goal is to become a number-one choice platform for banks and financial services companies regarding conversation intelligence and automation, providing the best quality of service, sales conversation rate, and recovery rate.

What can we expect from Ender Turing over the balance of 2023?

Iosifova: Our growth in 2023 gets us to expand to the U.S. and Latin America. But what’s more interesting is that we bring real-time agent assistance to fill the gap between the top-performing agents and the rest of the team and ensure real-time compliance monitoring in every conversation.

Photo by Marlene Leppänen

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Finovate Global: Showcasing International Alums at FinovateSpring

Finovate Global: Showcasing International Alums at FinovateSpring
By David Penn Posted on
Categories: 9Spokes, Finovate Global, FinTech Insights by Scientia, FINTEQ & Smart Faktor, Flybits, Fundica, Horizn, Hyperswitch, Kani Payments, Lucinity, Nubank, PayTic, SESAMm

With FinovateSpring only days away (May 23 through May 25), this week’s edition of Finovate Global will showcase those innovators demoing at the event that are headquartered outside the United States.

There’s still time to register and join us in San Francisco, California for our annual Spring fintech conference. Visit our FinovateSpring 2023 hub today and get your ticket today!

9Spokes

Founded in 2012 and headquartered in New Zealand, 9Spokes unlocks open banking and data, giving financial institutions a powerful set of tools to engage SMB customers. LinkedIn.

FinTech Insights by Scientia

Founded in 2016 and headquartered in London, U.K., FinTech Insights by Scientia offers a competitive analysis tool for banks and fintechs to help them create compelling digital banking experiences. LinkedIn.

FINTEQ

Founded in 2017 and headquartered in Poland, FINTEQ removes credit risk from the supply chain, giving suppliers a healthy and sustainable trade finance alternative. LinkedIn.

Flybits

Founded in 2013 and headquartered in Toronto, Canada, Flybits offers a personalization platform that enables financial institutions to deliver best-in-class personalized digital banking experiences. LinkedIn.

Fundica

Founded in 2017 and headquartered in Montreal, Canada, Fundica is a government funding platform used by some of the largest financial institutions in North America to acquire clients at scale. LinkedIn.

Horizn

Founded in 2012 and headquartered in Toronto, Canada, Horizn helps financial institutions maximize the impact of digital and accelerate returns on digital investments with customers and employees. LinkedIn.

HyperSwitch

Founded in 2022 and headquartered in India, HyperSwitch is an open source payments switch designed to make payments fast, reliable, and affordable. LinkedIn.

Kani

Founded in 2018 and headquartered in Newcastle, U.K., Kani offers end-to-end reconciliation and reporting, automating the back office for payments companies and fintechs, and ensuring accuracy and compliance. LinkedIn.

Lucinity

Founded in 2018 and headquartered in Reykjavik, Iceland, Lucinity combats financial crime with innovative GenAI technology for smarter and faster FinCrime compliance. LinkedIn.

PayTic

Founded in 2020 and headquartered in Charlottetown, Canada, PayTic is a SaaS platform that automates and manages all key aspects of program management: network fees, reconciliation, reporting, and fraud. LinkedIn.

SESAMm

Founded in 2014 and headquartered in Metz, France, SESAMm specializes in big data and artificial intelligence, providing analytics from more than 20 billion articles and messages using NLP. LinkedIn.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

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Finovate Global France: Automating Payments, Extending Loans, and Collaborating on Crypto

Finovate Global France: Automating Payments, Extending Loans, and Collaborating on Crypto
By David Penn Posted on
Categories: Finovate Global, iProov, Mambu, MasterCard, Numeral, PaySend, Revolut, VISA

This week’s edition of Finovate Global takes a look at recent fintech developments involving companies headquartered in France.

First up is news that European Buy Now, Pay Later firm Alma has partnered with BNP Paribas and new Finovate alum Numeral to automate payments.

“As part of our goal to create the most fluid and seamless experience for both merchants and customers, paying our 11,000 and growing merchants reliably and efficiently is critical,” Alma COO and co-founder Guillaume Desloges said. “Numeral enables us to scale with confidence and focus on our core business.”

Alma Finance and Strategy Senior Manager Simon Shohet explained that the integration of Numeral into both its systems as well as BNP Paribas’ systems, audit trails, and approval rules will enable automation of the process of managing “thousands of daily payments at scale.” Shohet added, “Thanks to Numeral, we can focus on the most critical incidents and rapidly solve merchant’s issues.”

Alma plans to eventually use Numeral’s platform to become a SEPA participant via BNP Paribas. This would enable Alma to issue IBANs in its own name, a strategic advantage for the firm.

Numeral made its Finovate debut at FinovateEurope in London earlier this year. At the conference, the Paris-based company showed how financial institutions can leverage Numeral’s platform to automatically send, receive, and reconcile SEPA payments. The platform also enables financial institutions to manage payment errors via SEPA R transactions. The company is on track to process €5B in 2023.

Also this week, we learned that Revolut will begin offering customer credit products in France at the end of the month. The company announced that consumer loans will be available to Revolut’s more than two million French users starting on May 30th.

Revolut currently offers lending products in other European markets. These markets include Ireland, Lithuania, and Romania. Mortgage products are not part of the current package. But Revolut VP of Growth Antoine Le Nel said that these products are in the pipeline.

Thanks to Revolut’s embrace of open banking, prospective borrowers will be able to apply for loans without having to deal with hardcopy paperwork. Instead, applicants will get virtual “instant feedback” on their loan requests. Loans come with zero opening fees and are available from as low as €1,000 to as high as €50,000. Terms range from three months to 84 months and interest rates range from a low of 3.9% to 21.12%.

France has earned a reputation for being friendly to the cryptocurrency industry. This week’s news of a partnership between Canada’s Advanced Payment Solutions (APS), Cyprus’ Armenotech, and France’s Tempo France is another modest testament to this.

Back in at the beginning of the year, Armenotech and payments company Tempo Finance teamed up to develop an ecosystem supported by the Stellar blockchain. This week, we learn that London-based Advanced Payment Solutions has joined the pact.

APS CEO Serik Igbayev highlighted the importance of giving businesses the ability to work with traditional and digital assets. And in a statement, Igbayev praised the partnership with Armenotech for playing a key role in making this happen. “Clients increasingly demonstrate a demand for services that would enable them to operate both traditional and digital assets, combining various payment methods,” Igbayev said. “We have successfully been using state-of-the-art Armenotech solutions to meet this demand.” These solutions included tools that facilitate the conversion between fiat and digital assets, as well as products for fraud protection, security, KYC, and ALM.

Tempo France is serving as the corporate payment operator for the alliance. Founded in 2008 and headquartered in Paris, Tempo France provides a fast and secure bridge between cash and cryptocurrencies. The company offers online, offline, and digitally backed remittances to nearly 100 countries with more than 300 physical agent locations. Alla Zhedik is CEO.

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Chait Goli

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Finovate Global London: Helping Companies Raise Capital with Ulyana Shtybel of Quoroom

Finovate Global London: Helping Companies Raise Capital with Ulyana Shtybel of Quoroom
By David Penn Posted on
Categories: Finovate Global, Quoroom

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.

Photo by Recal Media

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Finovate Global: CFDs, Licenses, and the Latest on Crypto in Central and Eastern Europe

Finovate Global: CFDs, Licenses, and the Latest on Crypto in Central and Eastern Europe
By David Penn Posted on
Categories: ACI Worldwide, Finovate Global

One of my biggest takeaways from my conversations about digital assets with delegates at FinovateEurope last month was the idea that new use cases will be among the first signs that the industry has emerged from so-called “crypto winter.”

That bar is likely years away from being cleared. In the meanwhile, crypto exchanges continue to expand access to digital assets for traders and investors. Today’s edition of Finovate Global looks at recent developments in the cryptocurrency and digital asset industries in Central and Eastern Europe (CEE).

Austria-based Bitpanda announced this week that it now offers CFDs – contracts for difference – for trading cryptocurrencies. CFDs are available for Bitcoin, Ethereum, and Solana on Bitpanda’s platform. These products enable cryptocurrency traders and investors to speculate on both rising and falling prices. The new offering, on the platform under the appropriate name “Bitpanda Leverage,” also gives cryptocurrency traders the ability to leverage their trades 2x.

According to coverage in The Paypers, Bitpanda is well aware of both the risk of “complex financial instruments” like CFDs and the “high risk of losing money” they often bring to traders’ portfolios. Bitpanda also acknowledges that the new products are more suited to short-term trading than longer-term investing. The CFDs have been available to a limited number of Bitpanda customers since late 2022. This week, the company is announcing that the products are being made available to all traders on the Bitpanda app.

CFD trading is not as regulated as trading in other financial products like stocks and exchange-traded funds (ETFs). As such, CFD trading is illegal in the U.S. and U.S. residents are forbidden from opening CFD accounts. The derivatives are traded in markets in the Euro Zone, however, as well as in the U.K., Switzerland, Japan, Canada, Australia, South Africa, and New Zealand, among others.

There are many ways in which Ukraine, which continues to defend itself from Russia’s invasion more than a year ago, is seeking greater integration with its neighbors to the West. This week we can add cryptocurrency regulatory policy to that list.

Ukrainian regulatory authorities announced this week that they would adopt the Markets in Crypto-Assets (MiCA) regulation just passed by the European Parliament. Heralded as a major advancement for the cryptocurrency industry in Europe, MiCA seeks to provide uniform regulations and standardized rules for digital assets in the E.U. At present, companies in the cryptocurrency space in the region must negotiate 27 different regulatory frameworks – crippling efficiency and limiting innovation.

“We, along with colleagues from the NKCPFR (National Commission for Securities and the Stock Market) and other regulators, are already working on implementing some provisions of MiCA to make crypto assets legal in Ukraine,” Yaroslav Zheleznyak said. Zheleznyak is the Deputy Chairman of the Tax Committee of Ukraine.

Cryptocurrencies have played an interesting role in Ukraine’s defense against Russian aggression. An article at the World Economic Forum last month noted that more than $21 million in cryptocurrency has been donated to pro-Ukrainian war efforts. According to blockchain analytics company Elliptic, $80 million of that amount went directly to support the Ukrainian government.

Cryptocurrency investors and traders in Lithuania have a new exchange to do business with. Crypto exchange Bitget, which is based in the Seychelles, announced this week that it has secured its registration in Lithuania. This will enable Bitget to offer its service in or from the central European nation.

Analysts consider Lithuania to be among the leading countries in the European Union when it comes to legislation helping develop the cryptocurrencyindustry. The country has been praised for the clarity and transparency of its regulations regarding cryptocurrency licensing – as well as a shorter licensing process compared to other countries in the E.U.

“The global regulation of digital assets is advancing on a daily basis, and we actively observe the regulatory changes around the globe,” Managing Director of the Bitget exchange Gracy Chen said. “We have a whole dedicated compliance team in place to focus on various regulatory compliance matters.” In its statement, the company noted that its compliance team has grown by 50% in the last 12 months. Bitget also recently launched a $300 million user protection fund.

Founded in 2018, Bitget serves more than eight million users in more than 100 countries and regions.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Photo by Anthony Beck

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Finovate Global Israel: “Catching the Good Guys” with Uri Rivner of Refine Intelligence

Finovate Global Israel: “Catching the Good Guys” with Uri Rivner of Refine Intelligence
By David Penn Posted on
Categories: CEO Interview, Finovate Global, Refine Intelligence

In this week’s edition of Finovate Global, we feature Uri Rivner, co-founder and CEO of Refine Intelligence. The Tel Aviv, Israel-based company, founded in 2022, made its Finovate debut earlier this year at FinovateEurope. At the conference, Refine Intelligence demoed its technology, Life Story Analytics, that leverages AI to help banks better defend themselves against money laundering.

We discussed the challenge of fighting financial crime, the innovations that Refine Intelligence brings to the market, and the relationship between upstarts and incumbents in Israel’s dynamic, fintech and financial services ecosystem.

What problem does Refine Intelligence solve and who does it solve it for?

Uri Rivner: If you’re a bank, your AML Operations team is massive, and needs to grow every year to cope with growing alert volume. But the team can have a pretty frustrating daily routine, as almost all the alerts they’re investigating end up being totally legit activities done by the customer. 

Take an account that did a large wire transfer to Mexico for the first time. The AML Transaction Monitoring is screaming like a banshee – maybe there’s money laundering here? But after investigating, the team finds out the customer just has a daughter studying in Mexico, and this was to pay her tuition. 

Years ago banks knew these life stories, because everything was done at the branch. But now with digital transformation, banks have lost that superpower.

At Refine intelligence, our mission is to help banks regain that superpower of really knowing their customers’ life stories, so their financial crime teams can quickly clear AML or scam alerts triggered by legitimate customer activity. We work with Risk, Financial Crime, BSA and AML teams. Fraud teams look at our technology to help with scam operations.

How does Refine Intelligence solve this problem better than other companies?

Rivner: Refine Intelligence takes a unique approach for fighting Financial Crime – we call it ‘Catching the Good Guys.’ 

Think of someone who got married and now deposits a large amount of cash from wedding gifts. Or a couple withdrawing cash in order to pay for a big renovation project. Think of people starting a new cash-intensive job, or depositing money from a fundraiser. These are all legitimate activities that look abnormal, triggering transaction monitoring alerts. 

Refine discovers these sort of “life stories,” i.e. legit customer activities behind a flagged anomaly. There are two ways to do that:

The first is to ask the customer and Refine provides that capability through our Digital User Outreach which allows a bank to reach out to customers automatically and collect their explanation within minutes.

The second way is to train AI to recognize the life story behind an anomaly, without reaching out to the customer. Our Life Story Analytics does that, and the training uses our unique, proprietary data set of genuine explanations.

The outcome: clear, fast evidence that helps AML teams clear away falsely flagged anomalies by identifying the legitimate customer activity behind them. 

Who are Refine Intelligence’s primary customers? How do you reach them?

Rivner: We work with large to mid-sized banks who operate a big team of investigators to look into AML alerts. Refine helps those banks reduce their operational effort significantly without making any change in the Transaction Monitoring system. 

Our founders and senior management team have been working with financial crime units for decades, and we expand our reach via participating in events such as Finovate, as well as our own virtual events. 

Can you tell us about a favorite implementation or deployment of your technology?

Rivner: A Top 50 bank in the U.S. deployed Refine Intelligence to handle customer outreach for AML. Before using Refine, the AML team approached the branch when they couldn’t find a good explanation to a flagged anomaly. The branch tried calling customers, leaving messages and chasing them for answers. A district manager described the situation as “we are the punching bag of the AML team.”

After the bank started working with Refine, it became clear why the existing RFI (Request for Information) process was driving everyone crazy. The average time to complete a customer outreach was 16 days with 3.6 back-and-forth emails between the AML team and the branch, as initial responses were often insufficient. The process consumed resources that were better used elsewhere.

Refine Digital User Outreach automated the process by messaging customers through digital channels. Response time was cut from two weeks to two minutes, completely changing the game for the Operations team who could work on alerts without interruption, receiving quality responses. With an 85% answer rate, the digital process outperformed manual outreach. Data collected was structured and allowed analysis and benchmarking, and soon most RFIs (Requests for Information) turned digital using the Refine system. The AML team loves the new approach.

What in your background gave you the confidence to respond to this challenge?

Rivner: I’ve been fighting online fraud for 20 years in Cyota, RSA and BioCatch – which I co-founded. This helped me take an outside look at the way AML was operating and realize that the current paradigm isn’t sustainable.

Online fraud detection benefits from context-rich signals that go well beyond transaction monitoring, device analysis, geo-location or behavioral biometrics. These signals feed into AI that is trained using a huge pool of fraud cases, as victims report fraud in their bank account. But no one reports money laundering in their own account, and when a bank files a Suspicious Activity Report, they never get feedback from authorities. You can’t train AI to recognize bad guys without feedback, so the industry had to revert to anomaly detection. 

You can get more and more efficient in anomaly detection, but at the end of the day most of what you find is irregular activity in good people’s accounts. Any improvement in detecting bad guys is doomed to be marginal. And that’s not good – the industry needs a game changer… 

This brought the insight of reversing the focus, to “Catching the good guys,” that is, detecting the legit activities that were falsely flagged as anomalies.

What is the fintech industry like in Israel? What is the relationship between fintech startups and the country’s established financial services sector?

Rivner: Israel, widely known as the ‘start up nation,’ is a powerhouse of cyber, fintech and financial crime fighting. Many market-shaping startups grew up in Israel: Cyota, now RSA Outseer, was first to introduce risk-based authentication using device and geo-location analysis. IBM Trusteer was first to launch an anti-Trojan tech. BioCatch was first to leverage behavioral biometrics for online fraud and scam detection. Forter and Riskified pioneered the chargeback guarantee market in eCommerce, Simplex did the same in crypto, and DoubleVerify prevents fraud in the digital advertising market. The largest global player in AML is Nice Actimize, and companies like EverC and ThetaRay help acquiring banks and payment providers manage financial crime risks. This might explain why there’s a vibrant community of fraud fighters in Tel Aviv.

Interestingly enough, the local Israeli market has never been a big target for those innovators. Most Israeli Fintech startups work directly with global design partners, who recognize the disruptive, out-of-the-box thinking behind their technology.

You recently demoed your technology at FinovateEurope. What was that experience like?

Rivner: Demoing at FinovateEurope was fantastic! We were thrilled to have the opportunity to demo together with so many other innovative fintech companies, and to meet with banks that are looking to incorporate innovative technologies into their operations. The experience was very TED-like, professional, and the vibe was exciting.

What are your goals for Refine Intelligence? What can we expect from the company over the balance of 2023?

Rivner: Everyone we talk to is very excited about what Refine is doing. When showing our Digital Outreach capabilities, AML teams come up with so many ways to use it effectively – from automating requests of information for resolving transaction monitoring alerts to helping the line of business with Enhanced Due Diligence and Cash Structuring education. Fraud teams are particularly interested in digital outreach to potential scam victims, and it is a great way to conduct rapid investigations of incoming wire and check deposits.

But the biggest amount of interest is in our other bit of magic – Life Story Analytics. That’s where we train AI to recognize the legit customer activity behind a flagged anomaly, without reaching out to the user. Financial Crime teams are excited about the notion of keeping their AML transaction monitoring or scam detection models as is, despite the high degree of false positives, and letting AI sweep aside the legit customer activities so what’s left are the real unexplained anomalies that might be money laundering or scam victims. That’s going to be a major area of expansion for Refine.

Photo by Haley Black

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