Finovate: The latest in financial services innovation

Finovate Spring 2015 – Ready for the Show

Welcome to Day 1 of the Spring Finovate show, live from San Jose, California. Beyond the Arc and the William Mills Agency will be blogging live. For the next two days you can tune in to learn more about the latest in technology and innovation in financial services.

It is now 5 minutes to show time. In two short days we’ll hear from almost 70 companies. In a series of 7 minute presentations, they’ll be discussing the innovations that their companies are bringing to market.

I’ll be joined today by William Mills (^WM) and KT Mills. Tomorrow Corina Jordan from the Beyond the Arc team will be joining us.

This is the 8th Finovate in the San Francisco/Silicon Valley area. I’m happy to say that I’ve been to most of them. ^SR

Well, it looks like our first presentation has three folks and I know at least one of them. Safwan Shah is brilliant. I learned a lot when I worked with him. I’m looking forward to hear what they have to say. Safwan sold his company to TSYS several years ago. ^WM

Vouch

The first presenter of the day is Vouch, and their rep Yee Lee. Their product is about “creating the first social network for credit.” The network helps you to build up creditworthiness. People in your social circle are able to provide an opinion of your ability to manage money. This is not like twitter or facebook, a much higher level of trust is required. You pull together a group of “sponsors” who are willing to speak on your behalf. The power of the social network reduces interest rates for the borrower, on average by 6% according to Vouch. The app is on Apple and Google platforms. ^SR

“Community Built on Financial Trust” Showing mobile able. Is this a new type of credit reporting network? Just an idea. “A different style network.”  From their web site: The first social network for credit. When people vouch for you they can help you borrow more money and lower your rate, costing you less. Money for your loan comes from Vouch at rates from 5%–30%. To get a loan offer, you need to meet our credit criteria and get one vouch. I’m not sure what they bring that is not available. I will have to visit their booth for more info later. ^WM   @Vouch https://vouch.com/

PayActiv

Many people are living paycheck to paycheck, waiting every two weeks to get paid. PayActiv works to accelerate the payment of compensation to employees. Through a mobile app, it looks like individuals are able to enroll. Company rep Safwan Shah notes that there is a flat fee of $5.00. You can pick up cash from an ATM machine, or can use the service to pay bills. The offering seems to require both the company, and the individual, to enroll. ^SR

Well, it looks like our second presentation has three folks and I know at least one of them. Safwan Shah is brilliant. I learned a lot when I worked with him. I’m looking forward to hear what they have to say. Safwan sold his company to TSYS several years ago. “PayActiv.MyMo” Showing mobile app.   Showing a mobile-based app for a wide variety of transactions, P2P, cash, bill pay and more.  It’s like a “Swiss Army Knife” of mobile financial applications; it sounds like it does everything from mobile banking, P2P, PFM and more.  “Developing tools for employers and over 10,000 users so far.” Great job. ^WM    @PayActiv    https://www.payactiv.com/

FIS Mobile

Cardless cash from FIS allows you to “preorder” your cash before you arrive at the ATM.  The system uses QR codes, and you scan the code when you arrive at the machine. “The accounts are tokenized and protected.”  They are currently in the field with NCR and Diebold machines. Their tech will enable the issuance of instant ATM/Debit cards at the ATM.    ^SR   @FISMobile    http://www.fisglobal.com/

Showing a demo with a mock ATM. Showing using mobile app to speed an ATM transaction. I understand the problem being solved. It’s such a pain to use an ATM in an airport or another card. Using QR code on mobile phone app to get his cash quickly at an ATM.

I had MY credit card cancelled traveling this week and my bank didn’t tell me; they just mailed me a new card but didn’t tell me. I had to call and have them FEDEX it to me at the hotel. This is a big problem and I’m glad FIS and other folks are working on this problem. I mean it; it’s a BIG problem for anyone who travels. “Commercially available across the U.S. with Diebold and NCR (I think) ^WM

DarcMatter

The site provides a platform for alternative investments, for qualified investors. The site operates under appropriate compliance requirements. For an investor, you’ll be able to do due diligence online. As the issuer, I can track investor behavior on the website. DarcMatter helps to connect highly specialized, niche, investments with investors who are qualified to participate. $1.5B in investments now on the platform. This is an interesting offering, I’m curious if it lowers the cost of offering. ^SR

Encap Security

The product allows you to approve your wire transfer, without a call-back. With fingerprint scanner from your iPhone, you can approve your wire. The technology enables you to use the security that is native to your device. Encap offers “Omni-channel customer authentication platform”. This is the first company to discuss the customer experience, and viewing authentication from that customer perspective. Doesn’t just authenticate the user, the service also looks at the context of the transaction. ^SR

Showing Encap’s SDK which is integrated to a bank URL: West Springfield Bank; not sure if a real bank. They are showing two tablets and one phone showing authentication that are paired. Designed to integrated with a bank’s risk engine(s). It looks pretty slick. I’ve seen Encap present in the past. I believe the company’s HQ is in Norway.

From their web site: Encap Security provides the best way to secure access to applications and services using any platform – PC, mobile or tablet. Our patented multi-factor authentication technology enables smartphones and tablets to be used as transparent, banking-grade ID credentials.

^WM      https://https://www.encapsecurity.com   @Encapsecurity

Hip Pocket

“How does your bank rebuild trust and generate engagement online?”   The tool drives mortgage and retirement leads. The app helps the user to create a peer group, to see if they would pay the same as people like them. There are rates presented to the customer, based on a bank’s specific offering. As the app provides rates, I’m wondering how they provide link to the required regulatory disclosures?  With UDAAP, there are clear compliance requirements on rate-based advertising for consumer lending. ^SR

Showing a white label app for banks; right now showing a kind of marketing message, PFM-type screen asking for demographic data. Showing a user that they are paying a higher mortgage rate than 71% of their peer group. I don’t think I’ve seen these folks before. I’m really glad so many demos today are mobile-based.

From their web site: Drive Quality Leads and Save Customers Money

Hip Pocket engages your mobile and website visitors by using social influence and personalized consultation to generate new, qualified mortgage or retirement leads. We help banks and credit unions provide an engaging, intuitive user experience that marries the emotional and logical purchase decisions.

^WM   @BankMarketing     http://hippocket.net/

3E Software

Their product is Teslar, a platform to help lenders operate more efficiently. The management dashboard is dense with information. Maybe a bit overwhelming? Given the high bar for user interfaces, this team may need to invest more on the front end. It looks like Teslar is a customized BI tool and dashboard for lenders. ^SR

Money Amigo

The product helps provide financial services for the underbanked, particularly Hispanic consumers. Helps users to find free or low-cost services, like a no-fee ATM. You can use the app to send money via SMS text message. Recipients can be in the US, or across the border to other countries (in the demo, they are sending money to Mexico). No forms for fund remittance, as easy as a text message.  ^SR

Christian Serrato. REALLY cool UI mobile app that is focused on the unbanked with an emphasis on the Hispanic population.  Now showing international P2P payment system. It looks like they have not YET launched (stealth mode).  Again, the user interfaces looks great; all of the demos are getting better and better.  Patent Pending. “Want to partner” ^WM

Mitek

Two products are being demoed today: Photo Fill and Photo Verify.  With Photo Fill, you take a picture of a document (like a driver’s license), and it is scanned to pre-fill an online application. I really like this technology. It seems to me that some of this technology is native to my iPhone.  I’m wondering if Mitek is building on that device capability, or are they substituting it? With the Photo Verify product, the credit issuer can obtain more complete validation of the customer (beyond typical authentication). Not only is the license scanned, the product is able to detect and interpret the invisible security features on state-issued IDs.  ^SR

“3,500 banks and 50 million consumers use Mitek applications.” Showing new product, PhotoFill to pre-fill application and Photo Vertify to Authenticate a U.S. Drivers License. Now showing a mobile account opening using a phone and IOS Safari browser. Instead of filling out mobile form they use camera to capture image of back of DL. Enhanced and transformed image for data extraction. These folks are well-known for OCR/ICR. Showing instant approval for bank credit card. Cool. And fast.  But what about fraud with a stolen driver’s license?  I imagine they will address this issue; perhaps geo-location. ^WM

That’s it for the morning session at Spring Finovate!  Make sure to catch the action on Twitter with hashtag #Finovate and follow us @beyondthearc

Morning session part 2 – latest fintech from Finovate

Ondot Systems

“Over 100 million cards have be hacked due to data breaches. It’s getting harder to outwit the bad guys.” San Jose, CA-based. CarConnect is a white-label platform for card security and engagement. “130 FI’s are now using our application.” Last year launched CardControl for consumers to control payment controls from their mobile apps.

Second phase of implementation is CardConnect. I’m trying to figure what is different from this new app from their current app. It appears to have alerts, transaction preferences and more. Showing mobile app that with fraudulent transactions. These folks look well-backed financially. From Inc.: Ondot Skips VCs in Favor of Million Angel Round – Ondot, a financial technology startup, tries to get to breakeven using only angel money.

From their web site:

Ondot’s white label solutions enable Financial Institutions to give consumers the security they want with the convenience they need. Ondot serves its customers via direct relationships as well as channel partnerships with several of the largest card processors in the United States, who serve over 10,000 Financial Institutions. http://www.inc.com/kimberly-weisul/startup-skips-vcs-in-favor-of-eighteen-million-angel-round.html

^WM

TickerTags

Twitter activity and news: can social chatter make you a more effective investor?  There is a new generation of “social data points” that the financial industry has never been able to analyze and use for trading. They use natural language processing, machine learning, and human tagging. This company is doing some great work in text analytics, I’m interested in learning more!  ^SR

Stratos

The team is presenting the Stratos Connected Card at Finovate. According to the company, this transforms your credit card into a wearable device. I’m impressed by the technology, and this is one of the few fintech companies that are really building an effective consumer brand.

They are now rolling out a new platform for digital issuance of credit cards– get rid of the plastic! Stratos is also providing this service on a “white label” basis for banks and other issuers. When an issuer offers Stratos, their card is placed top-of-wallet as the default. ^SR

^WM

Deal Struck

One of the biggest issues for small business is managing cash flow, and access to working capital. This offering provides an end-to-end solution that encompasses borrowing, managing accounts receivable, and vendor invoices and payments. The platform integrates with Quickbooks, and the company’s bank accounts. Small businesses can also obtain credit reports on B2B customers.  ^SR

Easy access to money for SMB’s. Showing example of dark chocolate retailer. This sounds like a Capital Access Network, OnDeck, perhaps Kabbage or Business Financial Services. With new compliance regulations for banks I see this as a HUGE growth sector. Here is a paragraph referencing Dealstruck from the New York Times:

Then he heard about Dealstruck, a year-old company based in San Diego. In October 2013, Mr. Rincon shared his financials with Dealstruck, and a few days later, he came away with a 0,000 loan that featured a three-year term, a 10 percent annual interest rate, and flexible terms that allow him to make bigger payments in busy months. “The terms are clear and include a set monthly fee and a reasonable payback time frame,” Mr. Rincon said.

^WM

WealthForge

The company simplifies the process of raising capital for Reg D investments, the typical structure for most startups. Allows the issuer to add an “Invest” button to its website. The system is compliant, and audited annually, according to WealthForge. The platform enforces compliance requirements, including a review of suitability for qualified private investors.

Note to presenters: speaking really fast is not the way to “streamline” your demo. If you have to speak that fast, you’re providing too much content for your 7 minutes on stage.  ^SR

THE PROCESS OF RAISING PRIVATE CAPITAL DOESNT HAVE TO BE COMPLICATED. Can’t agree you more on that. Private placements are a pain and I think they have found a better way. Based in Virginia. I THINK it’s white labeled to the organization that is raising the money. Showing an example of “ABC Company” – web-based but offer API for real time information. I like it. ^WM

Cloud Lending Solutions

The company provides a virtual meeting place for applicants and lenders. Both parties set their preferences. This is not just about leads, applicants can submit an application online and it is matched with the lender.  What happens when the application matches more than 1 lender? The lenders can bid for the application (they bid based on interest rate that they offer to the borrower). They are currently in private beta. ^SR

Final afternoon session on fintech and financial innovation

Onovative

CoreIQ provides an easy-to-use marketing automation platform for community banks and small institutions. For any email campaign, you can also use the content to send the communication a a direct mail letter. The platform keeps your data on-premise, to send tailored outbound marketing. ^SR

CoreIQ looks to be a really cool community FI dashboard for marketing and other services. I have GOT to research this company. Not many folks are tackling this issue for community banks and credit unions. The core vendors have some good products but this looks like a good “out of the box” view of the data.

From their web site:

SIMPLY POWERFUL MARKETING FOR BANKS AND CREDIT UNIONS Emails, SMS Texts, Letters, Postcards, and Call Reminders sent automatically from your core banking system. Customer Onboarding and cross-selling have never been so simple.

I’m interested in finding out their “back story” – how they got into this business and who they are serving now. Good job. ^WM

Currency Cloud

This offering allows companies to easily make international payments, sending cash around the world. Customers are banks, payment providers, and companies needing an international payment platform. The company provides an API to developers. ^SR

From their site:

Powering Global Payments
Develop and automate your product with our Payment Engine to benefit from real time wholesale rates and a fast, secure payment network. Tailor to your business using our next generation API.

Based in London, these folks do a TON of payment processing. 125 platform customers in 212 countries and deliver 95% of the payments in 24 hours. “We are an API company.” Showing browser-based solution on a MacBook. I’m a bit annoyed that I don’t know these folks as they are clearly a “Player” in our industry. Showing the ability to build an API live on stage at Finovate.

From their web site:

Currency Cloud is excited to announce that we have passed a significant milestone! We have now processed billion, sending money to every corner of the earth; from Botswana to Brazil.

 ^WM

StockViews

Fund managers need research, and StockViews sees an opportunity to disrupt this space.  There are thousands of analysts, how does a fund manager know which ones to follow? This is the question the company addresses. They collect information about the analysts and the stock research they create. The platform helps to democratize research, introducing new analysts to fund managers. ^SR

Whodini

The company provides a CRM offering to help you create very robust customer profiles. Banks can solicit, and act on, customer preferences. Gamification provides an incentive for customers to answer questions about themselves, making the profile more extensive. The app includes social media, so users can become brand advocates. The product is both for the bank, and the bank’s merchant customers. ^SR

Kabbage

Kabbage has been providing capital to small business for last few years. Last fall, they rolled out personal lending for consumers. Today, they are announcing “powered by Kabbage” with first customer Sage Software.

According to Finovate: @KabbageInc has 170 employees and has raised $106M in equity #Finovate.

The other announcement today is for the Kabbage Card, issued as a MasterCard debit card. At point of sale, the transaction reduces the available credit on the customer’s Kabbage business line of credit. ^SR

Atlanta-based Kabbage has a great reputation. They presented at Finovate NYC last Fall and perhaps earlier. Last Fall they launched their “Carrot” product. Showing tablet-based solution with their partner Sage (software?). Showing Kabbage “Card” with MasterCard which I have not seen before. ^WM

Someone With Group

This is a very interesting product that enables crowdfunding for medical/HIPAA needs. The platform is licensed to medical providers. Consumers have to opt-out of HIPAA to set-up a funding page. The offering helps to reduce fraud for this type of crowd-funded campaign. The contribution is made on the hospital’s website. “We are ready for revenue”, the product is ready to be sold to hospitals across the country. ^SR

Ok, they have my attention with the words “medical only crowdfunding”. Man, this is a big deal. If you can help the healthcare industry you can do anything. Fraud is a problem in medical. Vetted for hospital systems. License their program to hospitals, perhaps others. HIPPA compliant with several patents pending. B2B play. Keep an eye on this company. Based in Maryland. ^WM

@Some1WithGroup http://www.someonewithgroup.com/

Digital Insight (an NCR company)

Location-based offerings for customers are enabled by beacons. Digital Insights has a platform for managing these beacons. Banks can customize the in-branch customer experience. No doubt that this technology will one day take the world by storm. Not sure if that day is anytime soon, at least not for banks. ^SR

“What’s the common thread between three events that units the events? All are using Beacons for their customers. This is a trend here, I think Finovate is putting similar companies together (see earlier posting). I’ve followed DI since Paul Fiore started it back in the 1990’s, then public, then to Intuit,then LBO now with NCR (now and Atlanta-based company). I’m very interested in seeing what they have been under NCR’s leadership. Interesting UI but I can’t tell who is supposed to use this (tellers?) and on what kind of hardware (iPads?). A CU is testing it now. DI’s DNA is in the CU space but has a strong footprint in the bank space. I THINK they are going to show an “offers” app with Bluetooth beacon technology at a business. ^WM

SayPay

Are customer experience and online security at odds? SayPay wants to make security more seamless for consumers. On the payment front, bills are pushed out to users via an alert. Voice biometrics are a key part of the solution, with a “3-D model” of the user’s voice. The company seems to be in early stage, actively raising funds. ^SR

Launching today; a simple way to authenticate and get things done through a white label bank app – bill pay, etc. It looks like mobile banking, bill pay, and other stuff COMBINED with authentication. I don’t think I’ve seen something like this. Looks like voice authentication. I met an Israel-based firm that had something like this (but not as developed) several years ago at BAI Retail Delivery Systems Conference. These folks are based close by; Pleasanton, California, a beautiful community that my wife and I visited earlier this week.
Boy, I’d really appreciate any FI provider to authenticate me by speaking easily. It takes me about 5 minutes to get my AMEX travel agent on the phone with the buttons on the phone tree and more. ^WM

Dwolla

Dwolla is one of the companies leading innovation in the payments space. Today’s presentation is about secure authentication. The payment information stays with the bank, unlike ApplePay. One of the primary benefits is real-time transfer of funds. ^SR

Talking about a new protocol – FiSync – to cut ACH transactions. As was noted at Money2020 several years ago ACH is a bit “Long in the tooth” and that quote was from the folks at NACHA.

You might want to check out the specific FiSync page on Dwolla’s site: https://www.dwolla.com/fisync

It seems to be pretty cool and important but not as exciting as other presentations. It’s hard to make ACH exciting and you guys did a good job. ^WM

Hedgeable

The company focuses on digital investment, with appropriate risk management. The wealth management firm of the past is being reinvented online. The digital firm creates tailored portfolios for customers. Coinbase and CircleUp are other fintech partners. No 3rd-party funds or managers are used. Minimum investment is $5k, and accounts are opened online. This robo-advisor allows people to invest in bitcoin. They are working with financial advisors and broker-dealers as partners. ^SR

04:13 pm

Hedgeable

Twin brothers leading tech company. Reminds you of the movie “The Social Network”, right?

From the web:

Hedgeable automates sophisticated, low cost, risk managed investing for busy professionals with as little as 00 in 5 minutes. I think they could make investing “sexy” for millennials as a global investing firm. Minimum investment is 5,000.

New York-based company with a really great dashboard. Back in the old days of Finovate dashboards like Hedgeable never looked this good. ^WM

 Day 1 at Finovate comes to an End

An amazing day at Finovate! Thanks to the show organizers, and all of the presenters!

William Mills, KT Mills, and I are glad you stuck with us to read this re-cap of the day.  Hope that you saw our Finovate video commentary here on the Beyond the Arc blog.

Check out Day 2 of our coverage! http://j.mp/FinovateSp2