FinTech Magazine - February 2021

fintechmagazine.com

FEBRUARY 2021

2021’S VENTURE CAPITAL CULTURE SHIFT

PERSONAL FINANCE APPS

Mambu:

CREATING FINTECH ERA INFRASTRUCTURE Eugene Danilkis, CEO and co-founder, outlines how Mambu’s pure SaaS banking platform is accommodating the needs of modern banking

TENEX

MONDIA GROUP

TAB BANK

Avoid the Top 5 Most Common Open Source Vulnerabilities Within Financial Organizations Learn what open source vulnerabilities are commonly found in financial services organizations.

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FOREWORD

I

t’s been an exciting start for fintech this

a time when tech companies become criti-

year: the rise and fall of Bitcoin’s value,

cal business partners for how financial

cashless economies are starting to take hold around the world, and investors have started to hone in on exciting startups that could lead the way in finance’s new normal.

services companies are designed and built.”

Elsewhere, we explore modern trends in crowdfunding, find out why it’s so hard to keep up with cryptocurrencies’ develop-

That spirit of far-reaching innovation is

ments, and track how the COVID-19 pan-

succinctly summed up by our lead story this

demic has spurred on a culture shift with

month, TAB Bank. Committed to driving the

investors and venture capital firms.

future of open banking, Mike Palmer, COO, described the company’s digital transformation and how it is maintaining the financial wellbeing of its customers during a particularly stressful time: “When you’re dealing with people’s

If you want to experience the marvels of the fintech era first-hand, our Top 10 mobile apps list could be the perfect place for you to start. Highlighting some of the best smartphone-based financial companions currently available, you’re guaranteed

money and their financial lives, it’s emo-

to find something useful no matter which

tional,” he says. “It has a huge impact on

area of the sector you’re interested in.

everything that they do, how they live, and even how they see the world. And so doing that well, doing it right, is very important to me and the people that I work with.”

Another example is Mambu. This Berlinbased startup has designed a SaaS banking platform that is laying the foundations for a new financial era: “Fintech is the age we’re living in,” states CEO and co-founder

Got a story to tell? FinTech Magazine is the perfect platform to share it and join the conversation. Find out more about featuring in our next edition by emailing: william.girling@bizclikmedia.com Will Girling Editor-In-Chief

Eugene Danilkis. “I think this decade will be f i nte c hma ga z i n e. com

03

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05

PUBLISHED BY

PRODUCTION DIRECTORS

Georgia Allen Daniela Kianicková

Joe Pallister MANAGING DIRECTOR

Lewis Vaughan

PRODUCTION MANAGERS EDITOR-IN-CHIEF

Will Girling DEPUTY EDITORS

Joanna England EDITORAL DIRECTOR

Scott Birch CREATIVE TEAM

Oscar Hathaway Sophia Forte Sophie-Ann Pinnell Hector Penrose Sam Hubbard Mimi Gunn Justin Smith

Owen Martin Philline Vicente VIDEO PRODUCTION MANAGER

Kieran Waite

EXECUTIVE ASSISTANT

Jordan Hubbard MEDIA SALES DIRECTORS

Richard Turner DIGITAL MEDIA DIRECTOR

DIGITAL VIDEO PRODUCERS

Sam Kemp Evelyn Huang Matthew Evans DIGITAL MARKETING EXECUTIVE

Evelyn Howat

Jason Westgate CHIEF OPERATIONS OFFICER

Stacy Norman PRESIDENT & CEO

Glen White

PROJECT DIRECTORS

Jake Megeary Michael Banyard fintechmagazine.com

CONTENTS

Driving the Future of Open Banking

10

Crowd pleaser:

the future of alternative financing is scale

32

40

CRYPTOCURRENCY: A NEW ERA DAWNS

48

A VC CULTURE SHIFT IS DEMOCRATISING INVESTMENT IN 2021

58

PERSONAL FINANCE MOBILE APPS

Building an ecosystem?

Connect the dots.

“Your journey to cloud must navigate pitfalls and opportunities that are unique to your business. We support you in imagining and delivering your cloud journey and making it run”.

Eric Meistermann, Deloitte Partner in charge of AXA Group

96 TNEX

76 MSU Federal Credit Union

110 Mambu

124 Mondia Group

10

Driving the Future of Open Banking WRITTEN BY

RHYS THOMAS PRODUCED BY

MICHAEL BANYARD

FEBRUARY 2021

11

f i nt e c hma ga z in e. com

TAB BANK

Mike Palmer illustrates how digital transformation is powering TAB Bank to make major contributions to the financial well-being of its customers

T 12

ransporting vital goods to consumers and connecting businesses that are sometimes thousands of miles apart,

trucking is the lifeblood of the United States.

For those who have never driven a semi-truck and trailer, the industry evokes iconic images of impressive chrome-tipped cabs, and of hardworking men and women glued from dusk till dawn to the painted lines of the nation’s highways. But the day-to-day reality is, of course, more nuanced; it is an industry brimming with unique financial complexity. How do truckers, forever on the move, receive their hard-earned paycheques? How do they access funds to fuel their trucks or acquire loans to buy their semi-trucks and trailers in the first place? And more importantly, how do they find a bank that understands them and their distinct needs?

FEBRUARY 2021

13

1998

Year founded

274

Number of employees

f i nt e c hma ga z in e. com

The Future of Alternative Payments is Here.

Our mission is clear: to help non-prime consumers shop where, when, and how they want while increasing retailers’ sales. Our leading edge omni-channel solutions were developed to serve both with our lease-to-own marketplace, payment method for ecommerce, and mobile app for in-store point of sale commerce. We are proud to introduce FlexLending, in partnership with TAB Bank, which broadens our reach with consumer installment loans. When it comes to alternative payment options, we have a solution.

Financing offered is made by Transportation Alliance Bank, Inc., dba TAB Bank.

FLEXSHOPPER: FLEXIBLE PAYMENT SOLUTIONS Kelly Arduz, Vice President of Marketing, FlexShopper explores the firm’s exciting new lending product launched in partnership with TAB bank FlexShopper offers alternative payment solutions for non-prime consumers, allowing them greater freedom to shop the branded goods they need and desire, from appliances and consumer electronics to furniture and auto tires.

Already a leader in lease-to-own, the firm is expanding its offering through a partnership with TAB bank, and the subsequent launch of a new lending product called FlexLending.

The solution bestows a broader spectrum of US consumers with greater choice in how to finance their purchases, and helps retailers increase their sales with this core consumer base.

“We’re really excited to be able to serve more consumers and partner with new retailers as a result of this collaboration,” says Kelly Arduz, Vice President of Marketing at FlexShopper. “We’ve had significant success in the lease-to-own space and sought to broaden our verticals beyond just durable goods, which in turn enables us to serve more consumers and partner with more retailers. TAB bank has expertise in originating consumer loans, and FlexShopper specializes in marketing non-prime payment solutions to consumers and retailers.”

FlexShopper is moving to meet market demand and adapt to best serve consumers, allowing them to shop how and where they choose. “Point of sale finance with retailers has been a growing industry,” Arduz says.

“And through our partnership with TAB, we’ve taken advantage of a significant opportunity in the Buy Now, Pay Later (BNPL) space that ultimately benefits all parties.”

FlexShopper’s partnership with TAB bank is “a synergy of expertise,” Arduz says, a symbiotic relationship combining the incisive capabilities of both organisations.

“We’re coupling our abilities,” Arduz continues.

“We can now solicit additional retailers and expand into states where installment loans are preferred over lease-to-own, and a customer who previously signed a lease for tires with FlexShopper can now get their car serviced or repaired through installment loans with our new product FlexLending, thanks to our partnership with TAB.”

TAB BANK

“WHEN YOU’RE DEALING WITH PEOPLE’S MONEY AND THEIR FINANCIAL LIVES, IT’S EMOTIONAL”

Founded in 1998, TAB Bank set out to answer those questions. Known in the early days as the Transportation Alliance Bank, its suite of financial services for businesses and individuals were tailored to truckers from day one, earning it an impressive reputation and loyal customer base within the industry and beyond. That the bank remains a

— Mike Palmer, Chief Operating Officer, TAB Bank

small financial organisation by definition belies the scale of its ambition and the enormous positive impact it has on the lives of its customers.

16

FEBRUARY 2021

E X E C U T I V E P R O FILE :

Michael Palmer Title: Chief Operating Officer

Company: TAB Bank

As TAB Bank’s Chief Operating Officer, Mike oversees the operational and customer support teams that assist TAB’s clients with their deposit relationships with the bank. Additionally, his teams securely process all the bank’s electronic funds transfers, apply for invoice specific payments across the factoring portfolio, and process thousands of lockbox and other checks per week.

Mike is a Certified Regulatory Compliance Manager.

Prior to his experience at TAB Bank, he spent 13 years at Wells Fargo, the last ten being spent in regulatory compliance roles focusing on international BSA/AML compliance as well as mortgage and consumer lending regulations. Mike holds a Bachelor of Science degrees in Finance and Marketing from Utah State University and a Master of Business Administration from Brigham Young University. He is a graduate from the Graduate School of Banking at the University of Wisconsin –Madison where he completed courses necessary to achieve the Executive Leadership Certificate from the Wisconsin School of Business.

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17

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TAB BANK

20

Flanked on either side by model

Doing it right for a relatively niche

trucks in his office in Ogden, Utah

customer base such as truckers

– TAB Bank’s central and only loca-

means understanding the realities

tion – Chief Operating Officer Mike

of their lives and their financial situ-

Palmer strives everyday to uphold

ations. To highlight the point, Palmer

that original vision. “When you’re

points to the ‘guaranteed check’, a

dealing with people’s money and

form of one-off payment run by third

their financial lives, it’s emotional,”

parties that is generally used to pay

Palmer says. “It has a huge impact

truckers performing a single job for a

on everything that they do, how they

different company. TAB works with

live, and even how they see the world.

these third parties to ensure their

And so doing that well, doing it right,

customers can deposit these cheques

is very important to me and the peo-

directly into their TAB account – a

ple that I work with.”

seemingly small service that in fact

FEBRUARY 2021

“WE WILL DRIVE ENGAGEMENT WITH TAB BANK, AND CUSTOMERS WILL REALISE, ‘THIS IS WHERE I CAN REALLY LIVE MY FINANCIAL LIFE’” — Mike Palmer, Chief Operating Officer, TAB Bank

We Are TAB Bank CLICK TO WATCH

|

3:03

f i nt e c hma ga z in e. com

21

Technology services designed for banking and lending firms ValueMomentum is at the forefront of helping Banks and Lending companies in their digitalization journey across Retail & Commercial Banking, Core System modernization, and Lending lifecycle automation/optimization.

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23

has a major positive impact on the

bank is undergoing a dramatic digital

lives of its customers. “They haven’t

transformation to bring ‘EU-style’

got this guaranteed cheque having

mobile banking to its customers

around that they’ve got to wait to

across the US and expand its cus-

deposit at their hometown bank when

tomer base beyond transportation,

they get home,” Palmer says. “We can

an initiative that has been in the works

get money in their account. They can

for some time.

fuel their truck again and keep moving goods across America.”

“I would say we’re right at the cusp of being able to take advantage of

TAB’s deep ties to the trucking

the investments we’ve made over the

industry stretch back more than two

last several years,” says Palmer. Led

decades, but much has changed in the

by TAB’s president Curt Queyrouze,

intervening years both in trucking and

described by Palmer as a “brilliant

the wider financial landscape. Now the

banker and futurist”, the executive f i nt e c hma ga z in e. com

Customer financing made EASY - Approvals up to $5,000 - Good credit to NO credit - ZERO down payment required - 90-Day No Interest Promotion* - Affordable monthly payments *With up to a $40 processing fee

Visit our website All loans made by Transportation Alliance Bank, Inc. dba TAB Bank, which determines qualifications for and terms of credit, excluding AK, AZ, CA, DE, ID, KS, KY, ND, NH, NM, NV, OR, PA, UT, VA, WA, and WI. Financing in these states is administered by EasyPay Finance.

team took a step back to reassess how best to organise data, how that data can enhance the customer experience, and what underlying hardware and resource investment would be vital to realising their grand vision.

These are lessons TAB learned from the European Union, which Palmer believes picked up the data-driven baton from the US and ran it in the

“I’M VERY EXCITED ABOUT WHAT WE’RE GOING TO BE ABLE TO DELIVER TO THE MARKET HERE IN THE FIRST QUARTER” — Mike Palmer, Chief Operating Officer, TAB Bank

right direction.

“In the United States we were famous for using data to retain and 25

control our power in the marketplace – and I don’t think that we really even did a really great job of it,” he says. “Then organisations in the European Union came through and began opening this data up, and allowing people access to it within the banking system. I think what we’ve learned in the States is that there is a way to make this work and be profitable, provide a great customer experience, and make everybody better off.

“What that means is making all the information that you have directly available to customers, and giving them access to it in the way that they want. A lot of the legacy online f i nt e c hma ga z in e. com

TAB BANK

and mobile banking platforms in the United States are very inflexible,” Palmer says.

Using open banking has empowered TAB to fine tune and tailor its new platform, as well as partner with market leaders to expedite the process of bringing it to market.

“We’re headed to that real open platform, with functionality that even allows customers to drop and drag widgets and other useful things like that,” Palmer continues. “If I’m a 26

small business owner and I want to see all the cheques that are clearing that day, or the transactions that are going to post, I can move that to the top. Or maybe I’m a consumer, and I am always worried about my balance because I’m living paycheque to paycheque, so I want that to flash to the top of mind. That’s efficient and effective for our customers, whether they are consumers or small business, and our hope is that by introducing these new services – and more in the future – we will drive engagement with TAB Bank, and customers will realise, ‘This is where I can really live my financial life’.”

FEBRUARY 2021

27

“WE’RE HEADED TO THAT REAL OPEN PLATFORM” — Mike Palmer, Chief Operating Officer, TAB Bank

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Partners have been vital to realis-

UX specialists who work to tie all these

ing TAB’s ambitions. On the backend,

things together. I’m very excited about

partners including MuleSoft and

what we’re going to be able to deliver

ValueMomentum worked with TAB’s

to the market here in the first quarter.”

internal teams to build the robust mid-

Developing this open banking plat-

layers that bridge the gap between

form will allow TAB to partner with

customers, their information and

fintechs to provide banking services to

TAB’s suite of services. On the fron-

their customers in a way fintechs want

tend, TAB leveraged Technisys’ Cyber

to. “Providing everything from a cus-

Bank platform.

tomisable customer interface to the

“These are tremendous partners

back-end core system was a goal from

that we’ve had tremendous success

the beginning,” Palmer explains. The

with,” Palmer says. “And then we have

way everything ties together allows

some very, very talented people here

partners to decide which pieces they

at TAB Bank, from developers to UI/

need to go to market.

f i nt e c hma ga z in e. com

29

TAB BANK

30

For Palmer, however, TAB Bank

and debt. He paints the picture of a

remains an organisation concerned

customer that banks with TAB Bank,

with people and making lives better.

but who took advantage of a good

Setting technology and digital trans-

car loan at a dealership in Kentucky,

formation to one side for a moment,

and whose mortgage is with a major

he says the overarching aim is to give

national lender. TAB’s new platform

customers a “more complete finan-

aims to unify all this data in order to

cial picture”, tying in all the disparate

understand each individual and begin

strands of their incomings, outgoings

offering recommendations on

FEBRUARY 2021

31

everything from insurance to mort-

is,” Mike says. “That’s really where I

gage rates or investment.

hope we are in 18 to 24 months. It’s

“We will be able to say, ‘Here are

a Herculean effort to try to get there,

some steps you can take to make your

and we’ve got a lot of work to do, but

family more secure, what your upcom-

I’m cautiously optimistic.”

ing business expenses are, make your financial picture better, and head in the right direction to get to where you want to be, wherever that f i nt e c hma ga z in e. com

FINTECH

32

FEBRUARY 2021

Crowd pleaser:

the future of alternative financing is scale WRITTEN BY

RHYS THOMAS

OFFERING ALTERNATIVE FUNDRAISING, CROWDFUNDING PLATFORMS WILL PLAY A VITAL ROLE IN FUTURE STARTUP INNOVATION – IF IT CAN DODGE THE REGULATORS 33 In 2016, UK neobank Monzo raised

Since then, the crowdfunding space

£1m in 96 seconds. Two years later, it

shows little sign of slowing down. In

raised £20m in just over two days. The

an exhaustive study into the impact of

pitch decks looked a little different

alternative financing, which comprises

to the usual Series ‘x’ round; these

crowdfunding, peer-to-peer lending

rounds were aimed at retail investors

and other less traditional avenues for

and Monzo’s own customers (33,500

raising money, researchers from The

of which plowed up to £2,000 into the

University of Cambridge concluded that

bank) through crowdfunding platforms.

this “evolving landscape” had become

The record-breaking raises made the

a cornerstone of global fundraising. Dr

digital-only bank one of the biggest

Robert Wardrop, Director, Cambridge

crowdfunding success stories of the

Centre for Alternative Finance said the

mid twenty-teens, and is today one of

segment now provides “substantial

the best-known and largest neobanks

sources of funding for consumers,

in Britain.

startups, small and medium sized

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“ We believe that you need to be a player of greater scale to serve companies and the investors who support them” — Jeff Kelisky, CEO, Seedrs

enterprises, and industrial verticals ranging from the manufacturing sector to creative industries”.

In fact, the study’s latest figures show that in 2018, alternative financing facilitated $304.5bn in transaction volume. Excluding a sharp drop in activity in China, that represents an enormous 48% growth in global alternative financing compared with 2017. f in t e c hm a g a z in e . c o m

FINTECH

36

CROWDFUNDING IN A CRISIS

the new obstacles to daily life in a

Some businesses flourished in 2020,

pandemic. Digital payments providers

namely enterprises which provided

helped businesses adapt to the shift

solutions to the immediate obstacles

in online shopping; mobile banking

thrown up by the COVID-19 or could

became the best way for business

swiftly pivot to address global quaran-

owners and consumers to maintain

tine and vaccine efforts. The fintech

a grip on their finances, regardless of

sector was one such winner, starting

the status of their bricks and mortar

from a position of power. Startups

branch; and insurers began to rely

were already making advances in

more heavily on digital solutions for

financial freedom, and their platforms,

claims settlement and growth in

APIs and white label solutions met

written premiums.

FEBRUARY 2021

Crowdfunding fintechs sat neatly at the intersection, providing lifelines to businesses struggling with the new pressures of the COVID-19 pandemic, and acting as a portal for fintech startups to get up and running.

“During the crisis, equity crowdfunding sites, peer-to-peer lending and invoice trading platforms have been successful in providing SMEs with funding solutions that use technology to offer speed, transparency and flexibility for financing that would otherwise not be available to them,” says Ian Duffy, CEO of Accelerated Payments. “Fintechs like these have been able to disperse funds with government schemes quicker than banks

“ [crowdfunding provides] substantial sources of funding for consumers, startups, small and medium sized enterprises, and industrial verticals ranging from the manufacturing sector to creative industries” — Dr Robert Wardrop, Director, Cambridge Centre for Alternative Finance

because they’ve automated onboarding, ID verification and instant bank account set ups.”

But Duffy believes not enough is being done to businesses seek this alternate route to survival and prosperity. “Awareness among business owners of these new funding options remains low. We need to change this during this pandemic – not only for the survival of these companies, but for our economy as well,” he says. w w w.f in t e c hm a g a z in e . c o m

37

FINTECH

38

FUTURE FUNDING

enterprises looking beyond the pan-

Crowdfunding fintech Seedrs wit-

demic and to the issues of the future.

nessed record levels of investing

Danish wave energy firm Wavepoint

through its platform in 2020. A total

is on track to exceed a €2m target,

of £293m was raised in campaigns

while UK-based EV comparison plat-

throughout the year, bringing invest-

form Carverter breached its £2m

ment on the platform above £1bn

crowdfunding target with more than

since lauch. 2021 has begun in

25 days still to go.

similar fashion: currently on its platform, campaigns are underway for FEBRUARY 2021

In October 2020, Seedrs announced it would merge with rival platform

“ Awareness among business owners of these new funding options remains low” — Ian Duffy, CEO of Accelerated Payments

positioned to build on our combined strengths and create a powerful

Crowdcube with a view to creating

global private equity marketplace that

the world’s largest private equity mar-

will transform the ecosystem of equity

ketplace. Jeff Kelisky, CEO of Seedrs,

finance globally.”

is bullish about the future of crowd-

Appetite, then, is high – and although

sourced equity raises – and believes

rarely crowdfunders reach the heights

scale is necessary to push the sector

of institutional funding rounds, the

forward. “We believe that you need

opportunity to raise immediate funds

to be a player of greater scale to

in a relatively short timeframe will

serve companies and the investors

place the sector at the centre of fur-

who support them,” he said. “As

ther innovations.

we look to the future, we’ll be well

But not all will be plain sailing.

Regulatory pressure threatens growth

TOP 5 BIGGEST MARKETS FOR CROWDFUNDING

in this sector, which, for the time being, remains relatively free from oversight.

In a 2019 report, PWC found financial

China: $215.37bn

services and telecommunications

United States: $61bn

firms both feared increased regulation

United Kingdom: $10.4bn

could stymie growth in crowdfunding

The Netherlands: $1.8bn

and peer-to-peer lending. Of the 508

Indonesia: $1.45bn

firms surveyed across both industries, 14% of the TMTs and 10% of financial

Source: Global Alternative

service firms said this new business

Finance Market

model was most likely to be affected

Benchmarking Report

by regulation in the coming years.

f in t e c hm a g a z in e . c o m

39

PAY M E N T S O L U T I O N S

40

FEBRUARY 2021

CRYPTOCURRENCY: A NEW ERA DAWNS WRITTEN BY

RHYS THOM AS

AS VALUATION OF BITCOIN SOARS TO RECORD HIGHS, AND BIG PLAYERS SUCH AS PAYPAL MAKE THEIR FIRST STEPS INTO THE MARKET, CRYPTOCURRENCY HAS COME OF AGE To chart the trajectory of cryptocurrencies over the past three months, and have accurate information for you to read once this issue of Fintech Magazine reaches your device, is an impossible task. No sooner than Bitcoin, the world’s highest priced and most traded cryptocurrency, surges beyond a new record valuation, it slumps, rallies, and climbs to new heights. Even the news sites dedicated to cryptocurrency values, initial coin offerings (ICOs) and developments in the crypto startup sector have a hard time keeping pace. Swelling numbers of self-styled cryptoinfluencers take to their social media channels to warn their followers of a coming slump, only for Bitcoin to tick upwards once more.

f i nte c hma ga z i n e. com

41

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43 From a high watermark of $19,783 in 2017, Bitcoin languished in the inter-

curiosity and into the realm of true financial opportunity.

vening years at the low thousand dollar

From a consumer perspective, that

range. But in mid-November, it left that

opportunity seems endless – in part

valuation in the shade, topping out this

driven by marketing campaigns prom-

January at a new record high of $41,973

ising attractive, if in some cases quix-

– and yet to dip below $34,000. Other

otic, potential returns. The grand vision

altcoins, such as Etherum, saw similar

of many crypto evangelists is a democ-

levels of bullish growth on the back of

ratisation of wealth management,

the headline-grabbing BTC activity,

platforms built by plucky startups and

while Elon Musk, the world’s richest

passionate visionaries, of borderless

man, tweeted his approval of the asset.

global transactions, and greater indi-

Tracking hourly trading candles, then,

vidual financial control away from the

isn’t necessary to see the bigger pic-

governance of central banks and insti-

ture: digital assets have matured

tutional regulation. In reality, however,

beyond obscurity, through frothy

the line between digital-native, f i nte c hma ga z i n e. com

PAY M E N T S O L U T I O N S

“ [CRYPTO] LEADERS ARE GOING UPSTREAM— GAINING ACCESS TO FEDERAL BANKING INFRASTRUCTURE AND BUILDING OUT NEW PAYMENTS AND ACCOUNTS PRODUCTS” — Sophie Guibaud, Chief Growth Officer, OpenPayd

world’. It’s here, creating meaningful utility and streamlined processes to ‘cash out’ from the enclosed ecosystems,

tokenised finance, and incumbent

where the biggest future developments

banks and institutes are beginning

lie – and where crypto collides with the

to blur.

big players of world finance.

Take Estonia: the Baltic nation once

44

CONSUMER APPETITE GROWS

welcomed foreign crypto startups with

Cryptocurrency has proved fertile

open arms, offering easily accessible

ground for fintech startups, inspir-

operating licences and the ability to

ing competition in everything from

legally headquarter a business within its

wallets for storing digital assets, and

borders through a ‘digital license’. Last

exchanges for trading and swap-

year, however, it stripped more than

ping coin pairs, to new channels for

1,000 crypto firms of their licenses over

consumers and enterprises to realise

growing concerns surround money

value from their virtual coins in the ‘real

laundering. Around 400 crypto firms remain after the cull, but they face a tough year ahead. Veiko Tali, Secretary General of the Estonian Ministry of Finance, and Deputy Head of the government’s Anti-Money Laundering Commission, said: “A number of important regulatory changes are planned for the services of virtual currencies in order to further regulate the field.”

FEBRUARY 2021

Sophie Guibaud, OpenPayd, on Open Banking and Banking as a Platform CLICK TO WATCH

|

3:07

45 On the reverse side of the coin, PayPal

Fintechs were more than happy to

signalled its entry into the crypto market

meet demand. “COVID-19 drove signifi-

in late 2020. In the US, users will soon be

cant disruption in the asset management

able to buy, sell and hold cryptocurren-

industry,” says Simon Jones, Chief

cies within their existing accounts, a

Customer Officer, ClearBank. “On one

move analysts predict will be a milestone

hand customers pursued emerging

for opening the market up to the main-

asset classes like crypto in the pursuit

stream. Sophie Guibaud, Chief Growth

of returns as interest rates remain low.

Officer, OpenPayd says PayPal’s new

And on the other hand, they gravitated

functionality “could be a major step

towards digital native offerings that

towards mass adoption among consum-

offered better functionality and trans-

ers”, a trend that was already picking up

parency than analogue rivals.” Jones

steam under the coronavirus pandemic,

believes incumbents will fight back in

as interest rates in traditional channels

2021, “as existing asset management

virtually dried up.

and investment platforms reinvent f i nte c hma ga z i n e. com

PAY M E N T S O L U T I O N S

themselves to deliver a much more mobile-centric, real-time investment process that rivals the digital natives”.

A BIG YEAR AHEAD The coming 12 months may play as big a role in the future success of cryptocurrency as the past 12 years, the period since Bitcoin was first released.

Coinbase, one of the world’s biggest exchanges, will pursue a public offering after filing with the SEC in late December.

Gemini, the New York-based exchange 46

founded by the Winklevoss twins, who famously tussled with Mark Zuckerberg in the early days of Facebook, may follow suit after confirming they were “definitely considering [going public]" in a recent interview. Either would be a landmark event, testing both the appetite for crypto firms in the broader market, and as a means for investors to bet on the digital exchanges without directly entering the system.

Collaboration between crypto firms and incumbent financial institutes will also shape the future landscape. Indeed, crypto exchange Kraken recently became the first US crypto company to secure a banking licence. “That could be FEBRUARY 2021

" CUSTOMERS PURSUED EMERGING ASSET CLASSES LIKE CRYPTO IN THE PURSUIT OF RETURNS AS INTEREST RATES REMAIN LOW" — Simon Jones, Chief Customer Officer, ClearBank

47

far more important,” Guibard says, than

access to federal banking infrastructure

merely wider adoption from consumers:

and building out new payments and

the implication being that closer ties to

accounts products that will help them

traditional fiat currency will remove the

address much broader markets.

barriers of the somewhat obfuscated

“Not every exchange wants to be a

closed loop of digital trades and limited

bank, so we’ll see exchanges and other

payment options.

crypto companies making more use of

“The cryptocurrency space is no longer

Banking as a Service (BaaS) integrations

just about what’s happening on the

to build better products and customer

exchanges,” Guibard continues. “Instead,

experiences, with a particular focus on fiat

the leaders are going upstream—gaining

on and off ramps and wallet management.” f i nte c hma ga z i n e. com

V E N T U R E C A P I TA L

A VC CULTURE SHIFT IS DEMOCRATISING INVESTMENT IN 2021 WRITTEN BY

WILL GIRLING

48

With insights from Telstra Ventures, Mouro Capital and angel investor Steve MacDonald, we explore the changing face of modern investment practices In 2020, venture capital (VC) firms and investors were hit by some of the most substantial and unprecedented changes they’ve had to contend with yet: widespread market uncertainty, fewer funding rounds and less face-to-face interaction with clients. The sum of all these conditions could have made quality investment difficult or even impracticable, yet digital technology and culture change have proven, once again, that the restrictions of yesteryear need not interrupt modern business.

FEBRUARY 2021

49

f in t e c hm a g a z in e . c o m

From Inspiration

to Innovation

To know more, visit us at www.capgemini.com.au/insurance or email us at capgemini.marketing.au@capgemini.com

Still, the challenge has been omni-

June 2020, 90% of surveyed execu-

present and a generally conservative

tives predicted that COVID-19 would

attitude to unique business ventures

change business norms significantly

took hold. McKinsey & Co recorded

for the next five years. Although it’s still

a significant drop in overall executive

too early to tell the long-term effects,

commitment towards innovation at

the short-term implications of this

the height of the crisis (23 percent-

prediction couldn’t ring more true.

age points (pp), down 32pp from its pre-crisis level of 55pp), a reduction

BUILDING BRIDGES WITH TECH

that it doesn’t expect to fully recover

When considering the primary fac-

until after pandemic conditions have

tors that have enabled investment

fully dissipated. Furthermore, when

activity to carry on relatively unim-

the article was originally published in

peded, the ubiquity and importance 51

f in t e c hm a g a z in e . c o m

V E N T U R E C A P I TA L

M E E T OU R CO M MEN TAT O RS

Matthew Koertge, Managing Director, Telstra Ventures “My role at Telstra Ventures includes every aspect of running our firm, including managing investments, our investment process, leading our team, working with our clients and raising capital.

We started Telstra Ventures in 2011 and we are one of Australia’s largest VC firms with more than US$565m under management.”

52

Manuel Silva Martínez, General Partner, Mouro Capital “I have been investing in fintech since the late 2000s, primarily on behalf of Spanish banks. Mouro Capital is an early growth stage VC focused primarily in fintech, investing across Europe and the Americas with nearly 40 invested companies so far.”

Steve MacDonald, Angel investor and founder of MacDonald Ventures “I graduated college when few people had computers and students still went to computer labs. In 1999, when I was 28, I left my job at a publicly traded mail order pharmacy company and started my first of several healthcare software companies focused on digitising business processes and improving the customer experience, two of which sold for a combined $400m.

“Prior to my last exit in 2017, I started angel investing. In 2020, with more than 100 early stage investments, I decided to formalise my ‘hobby’ by founding MacDonald Ventures.”

FEBRUARY 2021

“ A lot of VCs thought they were very well-oiled machines, but 2020 has tested that and opened a lot of eyes” — Manuel Silva Martínez, General Partner, Mouro Capital

d’etre were solid, grounded and resilient. A lot of VCs thought they were very well-oiled machines, but 2020 has

of video conferencing software can-

tested that and opened a lot of eyes.”

not be overstated. Matthew Koertge,

The shared experience of a pan-

Managing Director at Telstra Ventures,

demic, then, has served to foster a

says that, although such tech was

lot of empathy between VCs and

already being deployed at his VC firm,

their clients. The lack of travel for in-

the pandemic put its utility in sharper

person meetings has also meant that

focus. “Even with the pandemic ongo-

more online pitches with prospect

ing, we have still been able to complete

companies from around the world can

six new investments and many follow-

take place back-to-back. However,

on investments in our existing portfolio.

Martínez goes one step further and

We even made it fun by organising vir-

suggests that we could actually be

tual lunches and gin master classes

witnessing the disappearance of paro-

as a way to break the monotony of

chial investment opportunities. In this

Zoom pitches.”

new vision, there would be no separate

In addition, Manuel Silva Martínez,

‘London scene’ or ‘San Francisco

General Partner at Mouro Capital, puts

scene’, “which is great news for

forward that investment firms have

smaller ecosystems traditionally

generally undergone the same opera-

underserved by capital, but it will make

tional challenges as their portfolio

VC competition much more fierce.”

companies, including getting used to remote working, “not only making sure

BROADENING ‘INVESTMENT’

that everyone had good equipment at

There is a growing sense that modern

home, but also making sure that our

‘investment’ should mean more than

processes, culture, and our raison

just providing capital (see our profile f in t e c hm a g a z in e . c o m

53

V E N T U R E C A P I TA L

54

on CIG Capital, pg.10 to 23). Time, par-

the density and frequency of advice will

ticularly for startups, can be as valuable

need to be measured against the com-

as money in the investment cycle, and

pany’s executive experience level, the

VC recognition of this has made it

benefits of investor counsel can mani-

emblematic of a fundamental culture

fest itself in many ways:

shift. Steve MacDonald, angel investor and founder of MacDonald Ventures, states that this is an approach he has

• Instruction on understanding KPIs and OKRs

always championed, “For years VCs

• Customer introductions

have preached about taking ‘smart’

• Discussion around finance options,

money. Well, if we aren’t actively shar-

• Guidance on how to structure deals

ing our knowledge how can that money

• Critiquing new products and advis-

be ‘smart?’” While bearing in mind that FEBRUARY 2021

ing launches

“ Conversations regarding financial prudence have taken on new meaning and the entrepreneurs have been much more receptive to these hard conversations” — Steve MacDonald, Angel investor and founder of MacDonald Ventures have been much more receptive to these hard conversations.” Martínez concurs, claiming that the market has validated a “back-to-basics” approach to mentoring focused on growth and The world of investment is becoming

profitability. Interestingly, he adds that

simultaneously smaller and larger than

entrepreneurs are even demonstrat-

before, and attitudes within the sector

ing a proclivity to “share their state

are noticeably changing. MacDonald

of mind and look for comfort” from

notes two primary shifts: 1) Greater

investors. This suggests that an ele-

emphasis on real-time, data-rich com-

ment of distance may, paradoxically,

munications to enhance mentoring;

have enabled people to become closer.

and 2) A willingness to discuss ‘diffi-

Building on MacDonald’s first point,

cult’ topics. “Attention to cash flow and

Koertge adds that accelerated digi-

profitability has been a big change,”

tal transformation across the board

he suggests. “Conversations regard-

has served to ramp up the quantity

ing financial prudence have taken on

of data produced and managed

new meaning and the entrepreneurs

by enterprises. Therefore, internal f in t e c hm a g a z in e . c o m

55

V E N T U R E C A P I TA L

S TE VE M AC D O N A L D ’S 2 02 1 P R E D I CT I O N S 1. Market consolidation will continue as the previous cohort of startups reach maturity like Plaid and Credit Karma.

56

several recent investments that we otherwise would not have identified.”

READING THE MARKET “Inevitably, the volume and value of deals has been negatively impacted

2. Legacy companies’ acquisitions will accelerate.

by the pandemic, at least at the begin-

3. New niche unicorns like Robinhood and Brex will be minted.

have been signs of renewed activity in

ning,” continues Koertge. “But there recent months.” This begs the question: what kind of company makes an

4. The trillions of paper dollars will continue to be digitised.

attractive prospect in the post-COVID

5. New niche players will evolve to digitize those dollars.

part of the finance market, but it’s

6. More anti-fraud solutions will proliferate with that digitisation.

7. AI will be core to every new breakout fintech company.

environment? Technology is a core often not sufficient for differentiation between investment options. “Cool new technology doesn’t automatically guarantee a transformational impact.

Telstra Ventures spends a lot of time understanding the drivers of a market, who the players are and how innovation

investment in consumer tech, AI

and technology are shaping a market.”

(artificial intelligence) and cyber-

MacDonald agrees, stating that find-

security will be essential. “Making

ing companies and/or individuals with

sense of all this new data to deliver

“deep domain expertise” cannot be

real-time, actionable insights will be

overstated. Martínez, while not refuting

a key theme in 2021. Telstra decided

this assertion, accentuates Koertge’s

a number of years ago to supple-

other point that the contemporary

ment our investment process with

market requires “contextual aware-

data science. This has resulted in

ness” of market trends, particularly with

FEBRUARY 2021

“ Making sense of all this new data to deliver real-time, actionable insights will be a key theme in 2021” — Matthew Koertge, Managing Director at Telstra Ventures

57

regards to forecasting: “Most of the

profound effect on investment’s future.

transformative power of fintech comes

With what Martínez calls the “democ-

from a combination of business model

racy of the digital plane” breaking down

reinvention, regulatory innovation and

regional barriers and broadening the

changes in market dynamics. Knowing

VC-entrepreneur relationship, the years

how to read the zeitgeist will be impor-

beyond 2021 are set to be a very excit-

tant for gaining an advantage.”

ing time. Digital transformation has set

More than any single company or

the stage and now an ongoing culture

archetype for success, the changes to

shift among VCs is guiding the industry’s

market dynamics in 2020 have had a

new direction. f in t e c hm a g a z in e . c o m

T O P 10

58

FEBRUARY 2021

PERSONAL FINANCE MOBILE APPS A wide variety of mobile finance apps are changing everyday money management.

We take a look at 10 individual examples from across the spectrum WRITTEN BY

WILL GIRLING

f i nte c hma ga z i n e. com

59

T O P 10

2011

YEAR FOUNDED

Founder TYLER GRIFFIN & STEVE GORDON

Bills

TYPE OF APP

60

10

Prism

A free app, Prism helps users simplify their complicated monthly bill paying by providing a clear overview of outgoings, thereby boosting confidence and allowing for better money management.

The company’s website claims that it is connected to more billing companies (11,000) than any other comparable service in the US. In addition to making an individual’s financial situation comprehensible, Prism also saves the user time by dispensing with the need to use multiple accounts or websites to track their bills.

In 2018, the company partnered with BillGO, Inc to develop its concept of easier bill payments even further.

FEBRUARY 2021

09

Albert

“We’re on a mission to help millions of Americans achieve financial wellness,” says the company website. Favouring simplicity, empathy and wellness in its approach, Albert is combatting the financial straits of life than can make an unexpected $400 charge land 47% of Americans in trouble.

The app allows users to automate their finances with the assistance of a human team of experts (called the Geniuses). A strong example of tech that embodies its core operating philosophy, Albert also partners with some of the world’s largest financial institutions to ensure quality, security and encryption.

2015

YEAR FOUNDED

CEO

YINON RAVID

Personal finance automator TYPE OF APP

f i nte c hma ga z i n e. com

61

UNIFY

Identity Verification and eKYC

Introducing the Jumio KYX Platform

Customers, users, patients, employees … whoever the “X” is in your business, Jumio helps you know, then trust.

jumio.com/kyx

2016

YEAR FOUNDED

CEO

SHACHAR BIALICK

08

Curve

Payment aggregator TYPE OF APP

The self-proclaimed ‘one card to rule them all’, Curve’s mobile app allows users to consolidate multiple payment cards (credit and debit) into a single, easily managed location.

Currently used by more than 1.5 million people in the UK, the company announced a prominent partnership with Samsung and Mastercard in August 2020 to enhance customer purchasing power even further.

Styling itself as the Netflix or Spotify of the fintech world, the company also offers favourable exchange rates on foreign currencies when travelling, 1% instant cashback from selected retailers and technical support in over 210 countries. It also features ‘payment reversal’ capabilities for situations where users pay with the wrong card and need to redirect a debit accordingly. f i nte c hma ga z i n e. com

63

T O P 10

07

Venmo

A mobile payments subsidiary of PayPal, Venmo provides a seamless P2P (peer-to-peer) transaction experience, either as a standalone app or as an integrated feature on third-party apps.

Currently used by over 60 million people, the app’s ability to make bill, dinner or activity cost splitting easy is well-reputed, as are its personalisation capabilities and intuitive design. An app that understands the potential for modern finance to be fun, relatable and simple, Venmo is a next-gen app that could continue to point out the direction of devicebased payments for the next 10 years to come.

64

2009

YEAR FOUNDED

CEO

DAN SCHULMAN

Social payments TYPE OF APP

FEBRUARY 2021

2012

YEAR FOUNDED

CEO

BRIAN ARMSTRONG

Digital currency exchange TYPE OF APP

06

65

Coinbase

No list of financial mobile apps could forgo the exciting cryptocurrency market, and Coinbase is one of its earliest pioneers. Founded in 2012 to provide a safe and easy method for consumers to access Bitcoin, the company now has a presence in over 100 countries, more than 35 million users and holds $25bn in tradable assets.

The app itself is available on both iOS and Android. From this central point, users are able to manage their portfolio, control the rate of their crypto investment (staggered across days, weeks and months if desired), and store their funds in a secure virtual vault with timedelayed withdrawals.

f i nte c hma ga z i n e. com

Driving insurers

digital future into a

At Cognizant, we’ve invested in the end-to-end capabilities needed to help insurance organizations not just do digital, but be digital. We partner with our clients to unlock new value and through the power of digital technologies and new ways of working, we help them evolve into more competitive, progressive versions of themselves.

Learn more at Cognizant.com

Copyright © 2019 Cognizant

05

PrimaryBid

Available on both iOS and Android, PrimaryBid’s app offers users a tech-based platform for investing in public companies. An official partner of the London Stock Exchange, the company seamlessly connects investors with equity placings offered at a discounted market place. So far it has completed 100 deals, each with an order book between £500k and £10m.

In October 2020, PrimaryBid successfully closed a $50m Series B funding round. Reflecting on the impact that COVID-19 has had on the investment market, Anand Sambasivan, CEO, considered the continuing success of PrimaryBid to be reflective of its inventive approach: “Our technology has allowed thousands of retail investors to participate on equal terms with institutional investors, unlocking a large and important source of liquidity and long-term share ownership for corporate issuers.”

2015

YEAR FOUNDED

CEO

ANAND SAMBASIVAN

Investment TYPE OF APP

f i nte c hma ga z i n e. com

67

T O P 10

04

Acorns

The Acorns saving app is available in three versions at different monthly costs: Lite ($1), Personal ($3) and Family ($5). As one might expect, Lite is a bare-bones offering that allows the user to invest spare change and gain bonus investments; Personal adds a retirement account with added tax incentives and a checking account; finally, Family adds an easy-to-open ‘Early’ investment account for children.

Backed by top-tier investors and advisors such as PayPal, Bain Capital, 68

and BlackRock, and even two Nobel Prize laureate economists, Acorns is gaining industry recognition as a truly modern saving.

2012

YEAR FOUNDED

CEO

NOAH KERNER

Saving TYPE OF APP

FEBRUARY 2021

2009

YEAR FOUNDED

CEO JAY SHAH

03

Wealth management TYPE OF APP

69

Personal Capital

Personal Capital’s business model puts the app user at the centre.

Empowering customers with wealth management, cash management and long-term financial planning tools, its ultimate goal is to make each process better, more logical and personal.

Canadian retirement record keeping firm Empowerment Retirement announced in July 2020 that it would be purchasing the company for $825m. As of 30 September 2020, Personal Capital manages over $18bn assets for over 25,000 investment clients in all 50 US states, as well as more than 2.7 million individuals.

f i nte c hma ga z i n e. com

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T O P 10

72

02 FEBRUARY 2021

2006

YEAR FOUNDED

CEO

SASAN GOODARZI

Budget tracker & planner TYPE OF APP

73

Intuit Mint Originally created by internet entrepreneur Aaron Patzer, Mint was subsequently bought by software company Intuit in 2009 for a reported $170m.

Capable of connecting with practically every US-based financial institution linked to the internet, Mint automatically updates and sorts user information for enhanced visibility. The app was developed to give users a simplified method of tracking and planning their budget by integrating accounts, bills and balances and providing unlimited credit score checks. Mint’s software can generate alerts for upcoming bills in order to help with timely payments and is free for new users to get started. f i nte c hma ga z i n e. com

T O P 10

01 M1 Finance

Part of a disruptive trend in fintech (‘super apps’) that originated in Asia and is subsequently gaining traction in the US, M1 Finance’s diverse offering covers portfolio balancing, reinvestment and spend man74

agement on one integrated platform.

“Before M1, people were forced to use a mix of brokers, money apps, and banks to manage all aspects of their finances. Not only is that time consuming, but it can also lead to worse financial outcomes overall,” Brian Barnes, CEO and Founder, told us. “We want to be the super app for money, the one app that any investor needs for all of their investing, saving, spending and borrowing.”

The company has enjoyed a highly successful 2020, including 100% AUM growth ($1bn to $2bn) and a $45m Series C funding round. We look forward to tracking M1’s progress throughout 2021 as it continues to redefine Western attitudes to mobile finance apps.

FEBRUARY 2021

Introduction to M1 Finance CLICK TO WATCH

|

12:30

75

2015

CEO

YEAR FOUNDED

BRIAN BARNES

Super app TYPE OF APP

f i nte c hma ga z i n e. com

76

Experimenting With Technology in The Lab at MSUFCU WRITTEN BY

PADDY SMITH

FEBRUARY 2021

PRODUCED BY

GLEN WHITE

77

f i nt e c hma ga z in e. com

MSU FEDERAL CREDIT UNION

MSU Federal Credit Union has launched The Lab at MSUFCU, a testing program for rapid development of technology solutions. But it’s so much more

F

or Michigan State University Federal Credit Union (MSUFCU), The Lab at MSUFCU is a testing ground for future

technologies and a representation of how traditional finance houses are keeping in step with fintechs.

MSUFCU’s venture into an incubator format for proving new technologies goes beyond stuffing a 78

bunch of engineers into a room and hoping they’ll create the next unicorn. In fact, it supports startups who can offer technology partnerships and brings the most successful ones to pilot stage, while training its own team to work with the new technology.

MSUFCU gets to test the product, the partnership and its own team on a journey that goes from inception to implementation. But The Lab was not born overnight.

“The Lab is a combination of years of organic innovation formalized into a place to experiment with different fintechs and innovative companies and talk about those experiments, and get our members involved early on,” says Ben Maxim, assistant vice president of digital strategy and innovation at MSUFCU.

FEBRUARY 2021

79

f i nt e c hma ga z in e. com

MSU FEDERAL CREDIT UNION

“ The Lab is a combination of years of organic innovation formalized into a place to experiment with different fintechs and innovative companies and talk about those experiments, and get our members involved early on” — Ben Maxim, Assistant Vice President of Digital Strategy and Innovation at MSUFCU

The idea is that the process is “without fear” and to ensure that, unlike previously, potential partners do not feel pressure to present products that are “fully polished”.

80

“What we’re doing with The Lab is finding fintechs that offer niche services that make sense for a small portion of our membership. We try them out in a small pilot for a couple of months to experiment with and test it from our business perspective, looking at the ROI of what that relationship could be,” adds Maxim.

It also acts as a training ground for employees. “We have some of our experts from IT, including our development team. We have our UX team that helps us build out the prototypes, but then we pull in people identified as forward-thinking in their areas, those who are also looking for FEBRUARY 2021

an opportunity to share their experi-

Not only are employees brought

ences. We have people from our call

into The Lab to contribute ideas and

center from our branch network, from

encourage innovation, they also vote

our accounting team, and several

on which projects should make it to

other departments. The combination

the pilot stage.

of diverse experience helps us look

The desire to innovate, Maxim

at the different solutions holistically.

admits, has been driven by a change in

“We’re also looking to gather and

member behavior. Where once people

nurture employee ideas as well. We

came to the university and felt it made

have an internal program within The

sense to “check out the branch near

Lab called CU Innovate where we

campus”, the rise of fintech super-

solicit ideas from our employees,”

stars, such as Chime or PayPal, has

said Maxim.

introduced competition, and the large 81

E X E C U T I V E P R O FILE :

Ben Maxim Title: Assistant Vice President of Digital Strategy and Innovation Company: Michigan State University Federal Credit Union (MSUFCU) Benjamin Maxim joined MSU Federal Credit Union in 2007 and currently serves as Assistant Vice President of Digital Strategy and Innovation.

He is responsible for assessing emerging business trends and technologies, facilitating innovation throughout the Credit Union, and providing strategic direction for existing and future digital channels. Maxim began work initially as a Web Developer and in 2014, he became E-Commerce Manager before moving into roles including Assistant Vice President of Programming and Development and Assistant Vice President of Software Development. He earned a bachelor’s degree from Michigan State University. f i nt e c hma ga z in e. com

Preventing Online Fraud Dynamic CVV2 for Credit, Debit, and Prepaid Cards Start preventing the majority of online Card Not Present fraud, today. Keyno is dynamic security that can be easily added to all Visa cards. Keyno provides a dynamic CVV2 (CVVkeyTM) on your phone that replaces the static CVV2 on your card.The dynamic CVV2 validates on VisaNet during the transaction and is compatible with your existing card processing.

• Delivers CNP fraud reduction & increases card usage • Requires only a simple one-time sign up form • Dynamic CVV2 validates seamlessly on VisaNet, worldwide • Works on already-issued cards • Compelling business case; ROI in 1-2 months

LEARN MORE

Keyno: Advanced Fraud Prevention for Digital Finance Ben Maxim, Assistant Vice President at MSUFCU, outlines why his company chose Keyno’s dynamic CVVkeyTM product to bolster online security While fraudsters have been working overtime during the COVID-19 pandemic developing new and more aggressive ways to hack online merchants and customers, Keyno was collaborating with Visa and perfecting its CVVkey technology. This innovation replaces the static three-digit security code on the back of a credit card with a continually changing code delivered to cardholders’ smartphones, similar to Google Authenticator.

Keyno’s solution is not only easy to implement, it’s also risk-free for banks and credit unions. CVVkey is available as a standalone branded/white-label mobile app, or as a software development kit (SDK) plug-in to a credit union/bank’s mobile app.

Michigan State University Federal Credit Union (MSUFCU), which recently launched its own innovation center, The Lab at MSUFCU, is the first financial institution to trial Keyno’s fraud prevention solution.

Knowing Keyno is collaborating with Visa, Ben Maxim, Assistant Vice President of Digital Strategy and Innovation, moved forward with a pilot, offering CVVkey to an initial group of 1,000 MSUFCU members. The results are very promising. Maxim says MSUFCU plans to widen the pilot, especially since members who were not part of the initial group are asking if they can participate.

“I’m very proud that MSUFCU is the first financial institution to step up and address the growing problem of digital payment fraud with a truly innovative technology that credit unions, banks,

merchants and cardholders can all easily implement and use,” says Maxim. “We think dynamic security codes represent our best bet to drastically reduce CNP fraud, and we’re very encouraged by the results thus far. Keyno’s CVVkey is an effective technology that we can offer to our members quickly, at a time when preventing online fraud is so critically important. We hope other credit unions and banks embrace Keyno’s technology as well.

Keyno is simply an excellent company to work with.”

Adds Maxim: “We see this as an exciting opportunity for both our employees and members to be part of a payments innovation. We want to be on the front end of technology, and it’s important for us to be ahead of the game when it comes to fighting fraud. Every dollar lost to fraud is a dollar less we can spend on improving our programs and helping our members.”

MSU FEDERAL CREDIT UNION

MSU Federal Credit Union: Inspiring Hope CLICK TO WATCH

|

1:44

84 national banks (themselves heavily

“We have a couple projects in the

investing in fintech companies and

works that will target people while

developers) promote customer loyalty

they’re still in school, providing educa-

from parent to child.

tion and other related topics, and how

“We’re trying to compete with that

to ensure you have a solid financial

and help consumers understand

footing coming out of school. We want

what we offer them and how we can

to have offerings that are available to

set them up for successful financial

everyone, then also personalize them

futures,” says Maxim.

so they do hit those markets.”

Currently under pilot are Keyno, a

Maxim started in this role at

fraud prevention tool, Pocketnest™,

MSUFCU in January 2020, after 12

a financial wellness dashboard, and

years on the software development

ChangEd, for paying off student

team for the credit union and set out

loans early through a transaction

reading. He read a book by Eric Ries

round up feature.

called The Startup Way, which along

FEBRUARY 2021

with Ries’ The Lean Startup, is core

up being any opportunity – or ROI –

reading for the Silicon Valley set. He

that comes from it.

was captivated by the idea of entre-

“So we’re either getting something

preneurship within organizations, then

out of it or we’re showing ourselves

following the process of getting buy-in

that this isn’t the right thing to do

from internal stakeholders, raising

because our members don’t want it or

funds, recruiting a team and so on.

the ROI is just not there,” added Maxim.

“A lot of [The Lab] is modelled on the

The program has transformed the

principles in those books and really

speed of testing dramatically. POP/io,

trying to avoid what’s been coined as

a video banking company, had been

‘innovation theatre’ where you spend

lurking near MSUFCU’s project board

the money on some fancy room or

for 18 months before being thrust into

fancy building and then come up with

The Lab. “We were up and running in

all these ideas but there doesn’t end

five weeks,” says Maxim.

f i nt e c hma ga z in e. com

85

MSU FEDERAL CREDIT UNION

“ So we’re either getting something out of it or we’re showing ourselves that this isn’t the right thing to do because our members don’t want it or the ROI is just not there” 86

— Ben Maxim, Assistant Vice President of Digital Strategy and Innovation at MSUFCU Tim Mielak, MSUFCU’s chief informa-

With advances in the complexity of

tion security officer, has also enjoyed

attacks being met by increasing lay-

the organization’s newfound agility. “The

ers of security, is it becoming easier

Lab has really caused us to look at our

to fend off threats, or much harder?

security review process. A traditional,

“It’s getting harder in new ways,” says

classic security review process is really

Mielak, “and easier in the old ways.”

a gate, so we’ve had to develop over the

“It’s the new avenues of security that

past year in anticipation of doing this sort

are going to start challenging us. And

of innovation. We started to build out

I’ll give you a great example which

security systems that could rapidly adapt

is artificial intelligence. AI is the buz-

to the requirements of an innovation

zword. That’s true for products, but

lab.” The new process allows projects to

it’s also true for security. Imagine a

move quickly through the security proto-

future in, let’s say, five years where

cols “without being reckless”.

security is entirely based on artificial

FEBRUARY 2021

87

intelligentence bots combating each

time making sure that we’ve properly

other and trying to outmaneuver

calibrated our security program to the

one another. That’s technology we

threats that we actually face, anywhere

haven’t even really dreamed of yet.

from run of the mill phishing all the way

It’s more conceptual. We have to

up to nation state threat actors.”

embrace it, as a security department, along the same lines as The Lab.

MSUFCU is also embracing digital transformation. “It’s one of our main

“We have to embrace innovation,

focuses right now, coming out of

outside-the-box thinking, and secu-

COVID,” says Maxim, “and as part

rity to try and not just support those

of that we had our business analyst

efforts for our members, but also make

team go through each of our business

sure we stay one step ahead of the

domains and share their ideas for how

threat actors who are evolving in their

we can improve procedures and pro-

own right. And so, we spend a lot of

cesses that were manual. We are also f i nt e c hma ga z in e. com

The Art of the Nudge Larky turns mobile banking apps into real-time conversions Gregg Hammerman started Larky based on an epiphany: why shouldn’t the organizations we engage with regularly be able to communicate with us at just the right moment?

He recognized that consumer expectations and behavior have evolved, driven not only by the shift to doing things remotely, but also by the strategies of companies that have mastered the digital space— Spotify, Netflix, Amazon.

These platforms provide added value through features like end-of-year reports, movie recommendations based on your watch history, and “like” purchase suggestions, deepening the customer relationship. They sync with your life outside of their platforms.

Larky has taken this idea of blending into a user’s everyday life and run with it. Their functionality easily integrates with mobile banking apps to engage with users at different touch points throughout their day. Using lock screen notifications, Larky can guide people to offers, promotions, local events, and information relevant to their unique needs in that moment.

MSU Federal Credit Union identified a powerful way to use

Larky’s technology to engage with their members: “We have a loyalty program where we work with local merchants who will give you a discount if you use a MSUFCU debit/credit card.

Larky helps us remind people to take advantage of those.” —Ben Maxim, Assistant VP of Digital Strategy & Innovation, MSUFCU People have a lot of options when it comes to banking, and it’s hard to stand out. Larky works with a diverse selection of community financial institutions to help them showcase the unique services they provide. Maxim recognizes the potential for their partnership to expand and innovate, helping them stand apart from the competition: “Beyond the geolocation and personalization, we’re working with Larky to figure out credit card fraud detection and prevention.

Future possibilities are out there.

They have an established product, which is great, but what else can we do with them? For one, we’re looking into gamification of different interactions within our digital accounts. Larky is fully open to that, and I look forward to where we might go.”

MSU FEDERAL CREDIT UNION

“ Imagine a future in, let’s say, five years where security is entirely based on artificial intelligentence bots combating each other and trying to outmaneuver one another” — Tim Mielak, MSUFCU’s Chief Information Security Officer

90

FEBRUARY 2021

looking at how we can improve efficiencies through automation or custom AI solutions from the front line all the way to the back office. We’re also really trying to improve our digital presence.”

The credit union is keenly aware that almost a third of its members live too far away to make regular in-person visits to a branch, notwithstanding another pandemic lockdown or other unforeseen event.

“People have adapted to interacting with us digitally, and they don’t come through the traditional channels with the same frequency as previously. We don’t see as many in the branch every Friday to deposit their paychecks, because they do it with eDeposit; we don’t have as many people calling in to check balances because they do that on the mobile app, and they can get text message alerts,” said Maxim.

This is the bedrock from which MSUFCU hopes to accelerate using The Lab. And that initiative has proven a testing ground not only for technologies but also for partnerships, such as with the fraud prevention tool Keyno.

Maxim explains, “They’ve been working on a product for a couple of years f i nt e c hma ga z in e. com

91

Conversational AI Built for Credit Unions

Boost.ai delivers best-in-class conversational AI. Their solution makes it simple for us to develop virtual agents in-house that are powerful, intelligent and achieve the high member service standards that we set for ourselves.

Benjamin Maxim Assistant Vice President of Digital Strategy and Innovation, MSUFCU

1 week to deploy AI-powered self-service

1,000+ topics automated out-of-the-box

90% resolution rates and unlimited scalability

Exceptional customer experience and lightning-fast deployment, with no AI expertise necessary We know that no one understands your members better than you do. That’s why our conversational AI platform is designed from the ground up to put your member services team in the driver’s seat.

We use proprietary self-learning conversational AI to repurpose data from websites, chat logs and chatbots into superior virtual agents that delight members through dynamic self-service interactions.

With the industry’s largest library of credit union-specific content, our no-code solution makes it easy to train and maintain an AI-powered virtual agent that leverages employee expertise without the need for data scientists or external consultants.

Our market-leading Natural Language Understanding (NLU) gives our virtual agents consistent resolution rates of 90% - in 25 languages - making it possible to deliver that ‘personal touch’ your members expect to direct messaging channels.

With boost.ai, you get: A fully-opterational virtual agent, built using self-learning conversational AI, ready to deploy in less than one week Software that’s easy to learn and use, putting the power of automation into the hands of your member services team Unlimited scalability. Handle 10,000+ intents while maintaining a 90% resolution rate thanks to our enterprise-grade NLU

www.boost.ai

MSU FEDERAL CREDIT UNION

94

“ People have adapted to interacting with us digitally, and they don’t come through the traditional channels with the same frequency as previously” — Ben Maxim, Assistant Vice President of Digital Strategy and Innovation at MSUFCU FEBRUARY 2021

and have made some traction, and they were looking for a first client. We had a call and I instantly knew that this was something we wanted to explore.

Keyno is one of our first pilots as part of The Lab. They had a ready-made pilot program set up where they had the technology built, but they needed some actual cardholders to try it with.”

As testing rolls out to more cardholders, and the fourth quarter crunch for big ticket purchases comes along, MSUFCU is “already looking at how it can reduce fraud

become certified Boost.ai trainers. We were able to build out the content and train the model in 10 days and then test it with a group of 60 individuals.” User satisfaction reached almost 100% over the ensuing four weeks. Through the pilot, we determined we could automate approximately 2,000 employee-toemployee interactions each month.

“We decided this was a company we wanted to move forward with and we’re currently scaling that out. We’re learning AI. Yes, there’s technology involved, but a lot of it has to do with the content, the training, business flow, and business process.” as a way to gain back some of the

The Lab, which only officially launched

revenue we lost during the first few

in autumn 2020, is already creating

months of COVID, and set us up

alchemical results for MSUFCU. As the

moving forward in terms of revenue.”

credit union looks to 2021 and beyond, it

Boost.ai is another key partner, ena-

can look forward to seeing the reaction.

bling the credit union’s chatbot to take over simple inquiries while MSUFCU employees help members with more complex inquiries.

“With the virtual assistant, you get more consistent answers across the board,” says Maxim. “We did a pilot with Boost.ai and we asked individuals from our team with no experience to f i nt e c hma ga z in e. com

95

Enjoy your life

96

TNEX TRAILBLAZES NEW DIGITAL BANKING SECTOR

WRITTEN BY

DOMINIC ELLIS

FEBRUARY 2021

PRODUCED BY

MICHAEL BANYARD

97

f i nt e c hma ga z in e. com

TNEX

Bryan Carroll, CEO TNEX, explains how Vietnam’s first digital bank will connect 40 million ‘unbanked’ consumers with numerable small merchants

I

t speaks volumes about Bryan Carroll’s desire to break from banking convention that the first people he recruited for the

launch of TNEX – Vietnam’s first digital-only bank – were not financial or technology experts, but a psychologist and sociologist. By truly understanding customers’ needs, behaviours and emotions, 98

he feels that TNEX is in a unique position in the market to deliver services, products and features that better match their lifestyle needs and aspirations.

TNEX has a clear mission “to provide inclusive, secure, free and innovative financial and lifestyle solutions for every individual and small and microenterprise in both urban and rural areas.”

A quick click on the feature-rich TNEX website, which floats through “space”, endorses this against-the-grain approach and seems appropriate for a company which wants to take digital banking into a new “universe”.

TNEX targets two customer cohorts; lower income consumers and micro merchants, both of which are primarily under/unbanked. The TNEX-Consumer app allows customers access to offers and products that match their daily lifestyle and financial needs e.g.

FEBRUARY 2021

99

“TNEX came out of inclusion. We believe that every person in Vietnam has the right to banking, to support their lifestyle, and every merchant has a right to leverage digital commerce to grow their business” — Bryan Carroll, CEO TNEX

f i nt e c hma ga z in e. com

TNEX

TNEX Story CLICK TO WATCH

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2:08

100 payments, savings, buying food, chatting,

with its customers, even going as far

entertainment etc. These are

as the design of its own set of emojis

delivered via an online marketplace or

to better reflect customer emo-

ecosystem which is supported by the

tions; payments are gamified – ‘fired’ by

fully digital bank. TNEX-Merchant app

rockets.

allows merchants to post real-time, targeted offers to TNEX consumers.

It is clear that every aspect of customer

The consumer app has ‘Planets’ which customers can visit to browse and purchase products such as clothing, food,

experience is critical to TNEX. For exam-

education and travel. These products

ple, when designing its consumer app,

are placed on the planets by merchants

it did not approach a traditional

through the TNEX Merchant App.

development partner. They engaged

The whole ecosystem is fueled by ‘TNEX

with a successful gaming company out

Energy’, a loyalty currency which incen-

of Ho Chi Minh City. Every small detail

tivises a vibrant flow of interactions

has been co-designed face-to-face

and commerce between consumers

FEBRUARY 2021

and merchants. TNEX QR provides a closed-loop payment scheme, removing the current cost to consumers and merchants when making and receiving digital payments.

The TNEX proposition principally targets 58 million under/unbanked consumers and the plethora of four million small merchants across the Asian country. The target is to have three million customers and 200,000 merchants by 2023.

“The idea came to me while I was eating at a street stall and I saw consumers and merchants, but they

“ Our CX team is the largest and data science, the second largest. Our smallest is operations, the second smallest is IT. We inverted the pyramid and have no end of the day” — Bryan Carroll, CEO TNEX

101

weren’t connected digitally,” he said. “It was this interaction or ecosystem of the unbanked meeting the unbanked that got me thinking.

“Our objective, fundamentally, came out of inclusion. We believe that every person in Vietnam has the right to banking, to support their lifestyle, and every merchant has a right to leverage digital commerce to grow their business.”

While sponsored by Maritime Bank (MSB), TNEX is a stand-alone entity, given MSB’s focus on more affluent consumers and large SMEs and Corporate segments. f i nt e c hma ga z in e. com

TNEX

DI GITAL- S AVVY V IETNAM

“Our goal is to be to be profitable by June 2023 and to pay back the investment by February 2024. Of course we

• 140 million active phone subscriptions

would like to hit profitability sooner but

• 61 million internet users

Our operating costs are low and control-

• 70% internet penetration

lable and we can scale easily. Right now

• The average consumer on digital media six hours and 30 minutes every day

we have 108 staff known as ‘TNEXers’,

• The government is in the process of testing 5G 102

I believe that these dates are prudent.

growing to 131 by July 2021.”

The current version of the platform delivers two top-line propositions, B2C and B2B . With regards to B2C and reverting to the central theme of connecting retailers and customers, Carroll states that “most micro-merchants know how to succeed in the physical business world but not the digital one”.

“TNEX gives them the tools, knowledge and real-time data to remove most of the barriers which are preventing micro-merchants from joining in the Vietnamese Digital Revolution.”

For free, TNEX gives every merchant a website, cash management capabilities, qualified, targeted campaign management and inventory management.

TNEX-QR allows them to make and accept digital payments. They can even chat in real-time (TNEX Chat) with their current and potential customers.

FEBRUARY 2021

“TNEX helps merchants to grow their

advanced technology, data science,

business online with effective real-time

robots and automation which will ensure

targeted offers, using our ML and AI

products and costs to serve are, on aver-

capabilities. These may be offers to

age, 97% cheaper than traditional banks.

previous customers, anyone who is

“Most banks are trying to optimise ana-

within a kilometer of the store or to any-

logue processes and existing business

body who is likely to be interested,

models, whereas we are concentrating

based on insights provided by TNEX

on a new business model for a largely

deep analytics capabilities.”

underserved segment, leveraging a

TNEX is committed to providing ‘free

digital-only experience. Key to our suc-

everyday banking’ and a branch-less

cess is that we have zero technical debt.

and personalised, data-driven experi-

All our technology is new and is the most

ence. Carroll believes that TNEX is using

advanced digital technology available,” 103

E X E C U T I V E P R O FILE :

Bryan Carroll Title: CEO

Location: Vietnam

As well as being CEO of Vietnam’s first Digital Only SME and Consumer lifestyle banking platform – TNEX, Bryan sits on the board of two fintech firms: Xtremepush, based in Ireland, and adprov.io, based in the US. Bryan is a highly experienced practitioner in the areas of Digital Banking, Data Science, Digital Marketing, Information Security and Technology Architecture. Before joining MSB he held senior roles with many Banks, Fintechs and Venture Capital companies across Europe, Middle East, Asia and North America, including Rabobank International, Alfa-Bank Russia, Bank of Ireland, Royal Bank of Scotland and National Bank of Abu Dhabi. f i nt e c hma ga z in e. com

Mambu - the only true SaaS cloud banking platform.

When MSB chose Mambu to launch their digital-only bank TNEX, we worked closely together to bring their vision to life. Driven by customer behaviour, TNEX was built to support the lifestyle, needs and dreams of Vietnam’s dynamic and digitally adept population.

Li TNEX, we believe that no single vendor Like can innovate on every front as well as a healthy ecosystem of vendors that each focus on their area of expertise. Mambu’s platform enabled TNEX to adopt a composable architecture, picking out best-for-purpose tools and services and avoiding vendor lock-in.

On Mambu, TNEX was able to roll out a suite of innovative financial offerings within weeks, rather than the months or years that it would have taken using traditional core banking technology or a custom in-house platform.

To find out how Mambu can help your business take a digital leap get in touch helloapac@mambu.com. helloapac@mambu.

mambu.com

Mambu - the only true SaaS cloud banking platform.

Mambu: the engine of TNEX’s digital-only bank When MSB chose Mambu to launch their digital-only bank TNEX, we worked closely together to bring their vision to life. Driven by customer behaviour, TNEX was built to support the lifestyle, needs and dreams of Vietnam’s dynamic and digitally adept population.

Myles Bertrand, MD of Mambu APAC, and Bryan Carroll, CEO of TNEX, describe how Li TNEX, we believe that no single vendor Like can innovate on every front as well as a healthy the partnership could yield a transformative ecosystem of vendors that each focus on their area of expertise. Mambu’s platform enabled banking experience

TNEX to adopt a composable architecture, picking out best-for-purpose tools and services and avoiding vendor lock-in.

“I think one of the most important aspects On Mambu, TNEX was able to roll out a suite of Mambu is that we want to be different. of innovative financial offerings within weeks, than the months or years that it would We want to make sure we bring rather a very have taken using traditional core banking technology or a custom in-house platform. customer-centric view of what we do and To find out how Mambu can help your how we tackle things,” states Myles Bertrand, business take a digital leap get in touch hello@mambu. hello@mambu.com.

Managing Director of Mambu APAC. Providing the financial sector with an innovative SaaS (software as a service) banking platform, one of its closest customers in the region has been TNEX, one of Vietnam’s first digital-only bank offerings. “One of the key points is that it’s not just about technology. Fundamentally, it’s about culture and there’s no point in building phenomenal company values within your organisation if your partners don’t mirror them. Mambu’s product is all about putting the customer first, but, more importantly to me, it’s there for us when we need it. Mambu cares.

Mambu goes the extra mile,” explains Bryan Carroll, CEO of TNEX.

Incorporating elements of behavioural psychology, user experience, Big Data, artificial intelligence (AI) and more, Mambu demonstrates very clearly that embracing digital isn’t restricted simply to technology, mambu.com but rather involves investing in a new way of operating as a business. “We use this analogy that we’re an engine and that our customer gets to build whatever car they want around us,” says Bertrand. However the solution is not only configurable but also iterative: if the client decides to pivot from their original idea, Mambu facilitates this while still remaining the immutable ‘engine’ of the project.

Culture and technology are, for Mambu, inextricably linked. Always receptive to feedback from its customers and the wider market, the company strives to stay abreast of trends and keep its development in line with them. Carroll relates that this open attitude has been particularly useful for helping TNEX navigate different regulatory environments and carry out its ‘first principles’ approach to design.

“Mambu does what it says on the tin, and the team genuinely cares about my challenges and is willing to work with me.”

Concluding, Bertrand reiterates that, as TNEX continues to develop what it hopes to be one of Asia’s best banking experiences, Mambu will ensure it plays a vital part. “The fact that we can support someone like Bryan, who basically wants to do something really different and be a game changer, is super exciting for my team and for us as a business.”

www.mambu.com

TNEX

“ I fundamentally believe that banking can be a force for good.

Our business model is created on lifetime value not quick profit” — Bryan Carroll, CEO TNEX

106

FEBRUARY 2021

he said. “The profile of our team reflects our proposition. The TNEX Customer Experience team (CX) is the largest and Data Science, the second largest.

Our smallest is Operations, and the second smallest is IT. We have inverted the traditional bank staffing pyramid of being heavy in the back-office and light in the front-office.

“Customers want a personalised, almost humanised experience”, he adds.

“Banking needs to evolve to meet this challenge; to become embedded in peoples’ everyday lives, rather than passively co-existing without lifestyle context.

Data Science, AI and ML are a big part of this evolution, allowing us to personalise our services. But Data Science brings value throughout our bank. It allows us to better protect our customers, gain their trust and service their needs at key moments.”

He believes Vietnam is ready for digital banking and foresees few barriers, given the penetration of mobile phones, the high expense of running physical branches and the rising cost of managing cash.

“The Vietnamese regulator (SBV) is very progressive and is actively pushing f i nt e c hma ga z in e. com

107

TNEX

108

“ At this time the vast majority of traditional banks don’t want my customers as they cannot profitably serve their needs with their current technology debt and traditional operating models”

the digital agenda in a society where 80% of its citizens prefer to use cash,” he said.

Carroll extended a “big thank you” to several key partners, including Mambu, AWS, TopeBox and iConnect101. “All of our partners have been amazing.

Thanks to the foundations that the Mambu core has given us we could integrate very quickly with all of our partners. Our success has undoubtedly been made possible by working hand-in-hand

— Bryan Carroll, CEO TNEX

with these partners. They really understood what we are trying to do, bought into our mission and values; they really cared about our success.

FEBRUARY 2021

109 “TNEX is a fully open API’ed platform.

customers as they cannot profitably

Over the last few weeks, we have been

serve their needs with their current

progressing discussions with partners

technology debt and traditional oper-

about allowing them to leverage our

ating models.

capabilities and to further develop

“Most traditional banks are at the early

their business models. The conversa-

stages of digital transformation. It is an

tions on our B2B product-set, Banking

expensive and complex process, so I

as a Service, Ecosystem as a Service,

think we have about two years head-

Payments As A Service and Data

start on the competition.”

Science are really getting exciting.”

For now, as a trailblazer, Carroll doesn’t see any rivals emerging soon.

“I really don’t see competitors biting at our heels just now. We are the first to do it. At this time, the vast majority of traditional banks don’t want my f i nt e c hma ga z in e. com

110

FEBRUARY 2021

Creating Infrastructure for the Fintech Era WRITTEN BY

WILL GIRLING PRODUCED BY

GLEN WHITE

f i nt e c hma ga z in e. com

111

MAMBU

Eugene Danilkis, CEO and co-founder, describes how Mambu’s pure SaaS banking platform is accommodating the evolving needs of modern banking

A

t first consideration, banking may seem like an unlikely focus point for the transformative potential of lean and agile

digital technology. Images of cumbersome vaults, 112

grand buildings and long-standing heritage colour the industry’s popular perception. However, whereas once rigid endurance was the measure of a bank’s success, now, particularly in the COVID19-affected world, the core distinguisher of quality in a leading organisation centres on change and the ability to adapt to it. Launched in 2011, Mambu was created in order to facilitate this operational shift for banking clients using a combination of future-ready tech and a visionary cultural philosophy.

“I always had a passion for combining my interest in technology with something a little bit more broad,” explains Eugene Danilkis, CEO and cofounder. “I wanted to figure out the way people interact with technology and how that information could be employed to design a great user

FEBRUARY 2021

113

f i nt e c hma ga z in e. com

MAMBU

“ Real value lies in a mindset of always learning and always changing, and that goes for individuals as well as the business” — Eugene Danilkis, CEO and co-founder, Mambu 114 E X E C U T I V E P R O FILE :

Eugene Danilkis Title: CEO and co-founder

Company: Mambu

Industry: Financial Services Location: Germany Eugene Danilkis is the co-founder & CEO of Mambu. With a background in technology design, degrees in Human-Computer Interaction and Computer Science, Eugene is the driving force behind Mambu’s vision.

Eugene started his career as a programmer developing mission-critical software for the International Space Station. At Mambu, he now leads an international team that is helping banks and lenders, both greenfield and traditional, to shape the next generation of financial services around the world. Eugene combines his background in technology and design with an entrepreneurial approach, using technology to find simple solutions to some of the banking sector’s complex challenges.

115 experience, injecting technology in the

financial products and digital experi-

right parts of the journey.” A computer

ences would have a massive impact.”

science major and genuinely passion-

What resulted was Mambu: the

ate about how technology interacts

world’s leading cloud native banking

with people, Danilkis gained experi-

platform, designed to lay the tech

ence first as a programmer and then

infrastructure required for organi-

as a team lead. It was while working

sations operating in the modern era.

in an interdisciplinary programme at

Enabling clients to own and focus

Carnegie Mellon University combining

on the customer experience aspect

tech design, business and psychol-

of their business instead of the techni-

ogy that he determined the value

cal, the company offers a unique

a Software-as-a-Service (SaaS) plat-

opportunity for banks to upgrade

form could have in the finance sector.

rapidly. “You can configure the plat-

“We realised that giving organisations

form without having to get developers

anywhere in the world a platform

to customise the application, as you

upon which they can build and create

would with a lot of legacy systems,” f i nt e c hma ga z in e. com

MAMBU

116

“ Effectively, our clients don’t need to invest massive amounts into the projects upfront; they pay for the service as they go, with the option to pay varied amounts for different elements” — Eugene Danilkis, CEO and co-founder, Mambu FEBRUARY 2021

A decade of changing banking CLICK TO WATCH

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4:38

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MAMBU

118

“ I wanted to figure out the way people interact with technology and how that information could be employed to design a great user experience” — Eugene Danilkis, CEO and co-founder, Mambu

FEBRUARY 2021

Mambu in 2020 - CEO and Co-Founder, Eugene Danilkis CLICK TO WATCH

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119

says Danilkis. “That has a tremendous

the projects upfront; they pay for the

benefit on the business side; it means

service as they go, with the option to pay

if you want to, let’s say, change how

varied amounts for different elements.”

your financial products behave, or how

Because Mambu is able to offer

you capture customer data, you don’t

banks the opportunity to add their own

need to go into the nitty gritty of the

customer-facing value, it substantially

code.” Because Mambu maintains and

accelerates product time-to-market

manages the platform, the ease of

and enables greater resource allocation

delivery is akin to a subscription ser-

agility. However, despite these benefits,

vice, one where continuous streams

Danilkis relates that the initial chal-

of updates are layered in such a way

lenge of the company was overcoming

that doesn’t disrupt the end-user’s

scepticism levelled at cloud, itself

business. “Effectively, our clients don’t

a new technology at the time. “Working

need to invest massive amounts into

with banks and banking regulators, we f i nt e c hma ga z in e. com

MAMBU

120

explained that there was actually

technology ecosystem. That experi-

a reduced risk by running the platform

ence enables us to determine the

in a public cloud environment versus

best way to use tools, the best way

a local data centre,” he says. “That

to integrate systems, and the best way

process was quite transformative

to manage change.” Change is a con-

for Mambu as a company, because

cept so integral to Mambu that it has

it really opened up the market where,

become one of the company’s core

initially, no-one was active in the cloud.”

cultural tenets. Aware that modern

Helping financial institutions realise

finance is evolving on a continual basis,

that ecosystems of resources could

Danilkis emphasises that flexibility

fundamentally be stronger than a siloed

needs to permeate every aspect. He

approach, Danilkis is proud that Mambu

continues, “Real value lies in a mindset

was among the first to start challeng-

of always learning and always chang-

ing the industry’s perception of what

ing, and that goes for individuals as

cloud could do.

well as the business. Our leadership

This focus on relationships extends

team doesn’t go into conversations

from the macroscopic to the more

assuming that we’re right; just because

specific. Mambu prides itself on

you’re a leader at Mambu, that doesn’t

a highly customer-centric approach;

mean you’re automatically more right

involving business analysts, solutions

than anyone else.”

engineers and product managers at

Danilkis states that the company’s

an early stage, it is able to quickly and

philosophy of flexibility coupled with

accurately determine the needs of

its advanced tech capacities meant

its clients and their customers. “This

that, when the COVID-19 pandemic

includes giving best-practice advice

struck, operations managed to continue

based on the hundreds of projects

relatively unabated. By maintaining

we’ve participated in around the world

an open office for those unable to

at technical level, as well as introduc-

work from home while also supplying

ing them to relevant partners in our

equipment and offering flexibility

FEBRUARY 2021

THE 1 0 P RI N CI P L E S OF COMPO SAB L E B AN K I NG

Introduced in Mambu’s complete guide, these points capture the essence of the concept succinctly for organisations intent on discovering what composable banking can do for them: 1. Ecosystems beat pre-integrated suites 2. Start with a composable platform

121

3. Think ‘cloud-first’ 4. Every component is self-contained 5. Everything must be exposed via open APIs 6. Building new connectors must be simple and straightforward 7. Scaling should be elastic and occur horizontally 8. Continuous delivery is better than over-sized updates 9. The flexibility of the software must be reflected in the commercials 10. Self-service developer experience is essential.

f i nt e c hma ga z in e. com

MAMBU

122

to employees who wanted to work

He explains: “It effectively means that,

remotely, Mambu was able to focus

to really thrive in the current era, where

on helping those struggling with the

new technologies are coming onto the

logistics of the pandemic instead.

market and changing the conditions,

“We noticed that some customers

you have to be able to look for technolo-

were struggling and we identified

gies and solutions, either at a technical

several capabilities that they (banks)

level or business level, and combine

could offer their clients to provide

them rapidly to create value for your

a degree of flexibility on their payment

customer.” Focusing on building for the

terms, such as payment holidays or

future and ensuring competitiveness

payment rescheduling. Everything’s

in the long-term instead of simply

becoming much more digital, so

conforming to current trends, compos-

I think that’s accelerating a lot of

able banking eliminates rigid vendor

different initiatives.”

architectures and prioritises dynamic

Indeed, one key digital concept of

ecosystems that can develop opti-

which Mambu is an ardent proponent

mised solutions fast. “It’s essentially

is ‘composable banking’ - something

the philosophy that ecosystems will

Danilkis believes could be the ultimate

beat monolithic systems every time,”

solution for creating truly agile banking.

Danilkis summarises.

FEBRUARY 2021

Undeterred by COVID-19, Danilkis is confident that 2021 will be an exciting year for banking and particularly for Mambu. With new product launches and exciting initiatives on the horizon, he anticipates that the company will be

“ Fintech is the era that we’re living in” — Eugene Danilkis, CEO and co-founder, Mambu

able to expand deeper into the markets

tech companies become critical busi-

it currently serves and prepare for launc-

ness partners for how financial services

hing exciting new services. However,

companies are designed and built.” In

it is the change happening within the

this vision of the future, tech companies

industry itself that excites Danilkis the

will be part of a rapidly evolving, self-

most: a new, digitally-augmented vision

improving ecosystem that creates

of finance is emerging, one which places

a platform for building better banking for

Mambu at the epicentre of modern bank-

everyone. With its pioneering approach

ing. Not regarding fintech merely as an

well-suited to the post-COVID-19 new

industry, he declares that it could actually

dynamic, Mambu is sure to occupy

be considered more of an era, “Fintech

a prominent place in that vision.

is the age we’re living in,” he concludes.

“I think this decade will be a time when f i nt e c hma ga z in e. com

123

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FEBRUARY 2021

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Connecting Markets Through Digital Experiences WRITTEN BY

RHYS THOMAS

PRODUCED BY

MICHAEL BANYARD f i nt e c hma ga z in e. com

MONDIA GROUP

We hear how collaboration, people and data are the keys to unlocking global ecommerce in emerging markets

F

rom Dubai, Brad Whittfield, Group Chief Financial Officer at Mondia Group, oversees a global network of regional offices span-

ning Europe, the Middle East and Africa.

Today, however, he has been packing his suitcase.

Later this week he will fly to Europe to spend some time with the Mondia teams and to meet with Mondia’s countless valued partners. The irony of heading a 126

company that prides itself on connecting disparate parts of the planet through technology, while himself flying 3,500 miles for an in-person meeting, isn’t lost on Whittfield; genuine relationships are paramount to success.

Mondia helps companies connect with their customers through digital experiences. It provides the technology platform, the acquisition and engagement know-how and the extensive content catalogue – through its long term partnerships with the likes of Warner Bros and Universal. Essentially Mondia manages the end-to-end user journey. It underpins its digital content business with Mondia Pay, a flexible, direct carrier billing infrastructure which allows customers to pay through their phone bill - a fintech innovation driving current growth into new markets and sectors.

FEBRUARY 2021

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f i nt e c hma ga z in e. com

MONDIA GROUP

128

“You must have a top-down data-driven mindset and fundamentally make all decisions based on it” — Brad Whittfield, CFO, Mondia FEBRUARY 2021

A technology business by definition, Whittfield says Mondia is a “very unique company” at heart. Its approach stems from an internal culture of collaboration and innovation – despite the team being spread across many countries around the world.

“Our platform and product teams are based in Germany and Spain. We have a development and delivery hub of almost a hundred people based in Cairo,” Whittfield says. “We have offices in the UAE, Egypt across Europe and throughout Africa. So we have a really diverse group and we invest a lot into creating a one

team environment, having everyone

and that’s why we really do create teams

engaged in our products and services,

that are purposely located everywhere.”

and having everyone engaged in our

Through this international network,

core values: customer-centricity, inno-

Mondia serves some of the world’s big-

vation, collaboration.”

gest telecoms operators, including O2,

Having people “on the ground” with

Etisalat, Orange, Telefonica, and Vod-

insight into regional dynamics and user

afone alongside a host of other B2B

behaviour is key, says Whittfield. “If I

customers. Mondia’s products and

were sitting in Dubai, I wouldn’t neces-

services empower these operators to

sarily get a sense of what’s happening

engage their users through digital

in Africa. I wouldn’t be able to comment,

experiences, but its ambitions go far

so we have to have that sense of engage-

beyond that. Whittfield and the execu-

ment and collaboration, no matter what,

tive team firmly believe in extending 129

E X E C U T I V E P R O FILE :

Brad Whittfield Title: Group CFO

Company: Mondia Group

Brad Whittfield joined Mondia in 2019 as Group CFO and Executive Board Member. He has nearly two decades of international finance experience, with specialisms in rapid growth, funding and IPOs. He spent 10 years in Mergers and Acquisitions at the Big 4 consultancies based in London and the Middle East, and was recently recognised as an industry leader, voted a Top 10 CFO of 2020 from Industry Era, and winning acclaim as Best Emerging Global Finance Leader 2020 by Acquisition International.

f i nt e c hma ga z in e. com

MONDIA GROUP

their internal culture of collaboration to partners and, indeed, other startups and tech services.

“We’ve got a lot of longstanding relationships, but we really challenge ourselves,” he says. “We do not want to relax and sit on the fact that we’ve got these longstanding relationships.

We want to be their true innovation partner. What do our customers want next? As an executive team, we ask ourselves this every day.

“With technology nowadays, it’s not necessary - and probably not advisable to build everything yourself,” he continues.

“There are a lot of companies out there doing awesome work. It’s about creating this ecosystem where you can provide a suite of technologies and services.”

One recent such partnership is with mobile communications giant Vodacom Group, an agreement spanning five countries across Africa, a continent where much of Mondia’s immediate growth plans lie. Though individual countries are at different stages along the path, much of Africa and the broader MENA region can be characterised by a stark dichotomy: high tech literacy and adoption, coupled with a population that FEBRUARY 2021

131

“We invest a lot into creating a one team environment, having everyone engaged in our products and services, and having everyone engaged our core values” — Brad Whittfield, CFO, Mondia f i nt e c hma ga z in e. com

MONDIA GROUP

132

Mondia Introduction Video CLICK TO WATCH

FEBRUARY 2021

|

3:36

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“ As telcos are heavily regulated, direct carrier billing is rightly perceived to be an extremely safe way of payment”

is grossly underserved by traditional finance institutes. It is here that Mondia is innovating.

“In the last few years, we’ve really grown a presence in the MENA region and now our focus is to digitalise Africa” Whittfield says. “We see Africa as a huge opportunity, not only for the B2B business, and our digital content, but also for our direct carrier billing platform, Mondia Pay.” “In emerging mar-

— Brad Whittfield, CFO, Mondia

kets, many people don’t have bank accounts, but they’ve got two mobile phones. That’s how they participate in f i nt e c hma ga z in e. com

MONDIA GROUP

134

FEBRUARY 2021

digital commerce. Our transaction volumes are more than doubling every year – which is extremely exciting.”

Mondia’s direct carrier billing also expands beyond the walled garden of its own services, extending to Spotify, Deezer and other market-leading streaming and download services.

The possibilities are endless; users in the future can pay for physical goods through Mondia Pay; they might visit a restaurant, enjoy their meal, and at the end of the evening charge the whole thing to their phone bill. For many, it has unlocked access to the global ecommerce market, says Whittfield, and “from a user’s perspective, it’s a very simple experience and journey”.

Cultural perceptions also play a vital role in advancing Mondia Pay across the territory, an insight gleaned only thanks to Mondia’s emphasis on regional teams and localised, tailored services.

“As telcos are heavily regulated, direct carrier billing is rightly perceived to be an extremely safe way of payment,” Whittfield says. “Particularly in the Middle East and Africa region, where security and safety is such an important part of the perception of paying online” f i nt e c hma ga z in e. com

135

MONDIA GROUP

60

Countries globally

300

Number of emloyees

14

Office Locations

136

“ What do our customers want next? As an executive team, we ask ourselves this every day” — Brad Whittfield, CFO, Mondia FEBRUARY 2021

Underpinning Mondia’s push to “digitalise Africa” and other underserved regions is data. “You must have a top-down data-driven mindset and fundamentally make all decisions based on it,” Whittfields explains. “You really ask the data questions, and you can see the data providing the answer and user stories: we made this experience, this is how people reacted, and this is how you can see it in the data.”

90mn Monthly visits

80mn

Monthly pieces of content

900mn Payments processed monthly

Mondia invested heavily into its data

busi-nesses that didn’t acknowledge

strategy over a number of years and

the importance of data five years

the company is “really starting to feel

ago are now scrambling and are at

that benefit”.

a real competitive disadvantage.”

“When you have this data-first mind-set, you make much quicker and much better decisions. For me, it is less about the actual technology and more about the effective use of that technology and ability to collect, extract and interpret meaningful data.” says Whittfield. “The tech f i nt e c hma ga z in e. com

137

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