Fintech

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Member Spotlight: Basis Theory

According to Government Technology magazine, there were more than 1,900 data breaches in the United States in 2020. In 2019 and 2020 alone, about 16 billion records were breached, and the average cost for a single breach is $7.7 million for companies with less than 500 employees. Breaches also grew in severity between 2019 and 2020.

At the same time, there are projected to be more than 25 billion internet-connected devices online by the end of this decade. That means more data. In fact, the quantity of data creation is expected to increase to more than 180 zettabytes over the next five years.

These numbers boggle the mind — and they put consumers, businesses, and policymakers on edge.

Enter Basis Theory.

Basis Theory has built a developer platform for encryption and tokenization that can accommodate any type of data (including sensitive payments data). The company, launched in 2021 and fully distributed, helps financial services and financial technology clients stay in complete control of their customer’s data without taking on the compliance burden. The company was built during the COVID-19 pandemic, when, overnight, consumers become even more reliant on technology to shop, order take out, see their doctor and, of course, bank. Over those months of isolation, founders Brian Billingsley, Colin Luce, and Ben Milne and their team of engineers “built a secure PCI-compliant foundation to enable the collection and storage of payments data” on the Basis Theory platform.

Milne has written that he, Billingsley, and Luce wanted to create a company that could “offer a product to developers globally to help make protecting data easier.” Why? As he explained, “In many cases it’s not just about securing data at rest in all of these devices but about enabling privacy for end users ensuring their data only goes to third parties who are capable of protecting it. That’s a trend [that] will continue until it’s solved by a company or a protocol, but more likely some combination of both.”

Basis Theory also helps its clients:

  • Adhere to privacy regulations and comply with new and upcoming regulations, domestically and internationally, including PCI and the new Nacha rules;
  • Optimize payments acceptance;
  • Safely secure and manage user credentials and third-party API keys; and
  • Secure any data, document, or image a client does not want stored in plaintext.

Basis Theory became a part of FDATA North American and the North American open banking movement to “ensure the safety, security and privacy of the continued proliferation of data sprawl and not let any associated concerns stifle innovation within financial services”.

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Member Spotlight: Marble

To win a game of marbles, a player must hit a series of targets. That same goal can be applied to improving a person’s financial standing — which is how FDATA member company Marble got its name. Marbles’ proprietary MyMarble platform utilizes the power of machine learning, data science, and artificial intelligence, in leveraging its proven data-driven strategies through technology solutions Inverite, Point Deduction Technology®, Fast-Track and Learn. MyMarble utilizes scientific, algorithmic, and mathematical software that is based on rigorous banking and credit weighted algorithms, that analyzes data to identify where the impacts are placed on a credit files and banking history. This helps consumer engage in and navigate a clear path towards financial wellbeing and a meaningful credit score.

The core success to the MyMarble platform derives from its open banking and data collection strategy through the utilization of Inverite and Score Navigator’s Point Deduction Technology®. Inverite boasts connectivity to 288 Financial Institutions’ access points which is 15X greater than its closest competitor in Canada. Inverite also has the highest (99% vs 93%) implied consumer coverage and the fastest processing time by a factor of two over its competition. Its leading AI-based model Risk Score is trained from millions of banking verification requests and loan outcomes. Inverite has an international presence with coverage of FI’s in the South American market and will continue to expand its AI offering as Marble expands into other global markets.

How does Marble work in practice?

As Marble member Rich explained, the first step is expanding access to vital financial services platforms. Rich was looking for a program to help manage his debts, but most he found had a minimum credit score requirement to even apply. Rich joined Marble’s Premium program on May 30, 2020. He closely followed Marble’s monthly recommendations on when he should pay off certain debts and how much he should be put towards those debts. He also used the company’s simulators to determine what targets he needed to hit to reach his goal credit score. Within nine months, Ryan’s score increased from 480 to 663, a gain of 183 points.

In 2021, Marble launched two new initiatives that will help it serve even more Canadians.

In May, Marble launched GIC Savings Loans with Jenson Graf Risk Management Inc. The partnership will give Jenson Graf a progressive software solution that will automate its GIC Savings Loan application and approval process.

In June, Marble announced it’s new API solution Marble Connect. This revolutionary B2B product utilizes detailed risk assessment, consumer financial data, and a fully functional business & consumer portal. Marble Connect offers Canadian businesses a new turnkey marketing, education, and products solution for the broader audience of consumers looking to execute on more future business to connect through Marble’s financial fitness platform, MyMarble.

What sort of promise does open banking and customer-directed finance hold for Canadians? As Marble Financial CEO Karim Nanji has said, “The amalgamation of customer data provides an opportunity for Marble to offer and deliver more efficient processing and approvals of credit solutions. Ultimately, we collect the customers goals which along with the consolidation of financial data creates an opportunity for us and our partners to access this information to provide new services and more robust solutions in the areas of personal finance, money management including savings, investment, tax and insurance.”

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Member Spotlight: Interac

In 1984, Canada’s top financial institutions came together to create Interac Association, a cooperative venture dedicated to giving Canadians broader access to their money through a single shared network. Twelve years later, eight of the founding institutions created Acxsys Corporation, a new entity that would develop new business partnerships and services for financial transfer, online payments, and international services.

To better fund innovation and reduce certain business, operating and legal complexities, the two entities reorganized in 2018 to form Interac Corp. Today, Interac is one of the most trusted financial service brands in Canada, operating an economical, world-class debit payments system with broad-based acceptance, reliability, security, and efficiency, helping more than 30 million Canadians families and businesses feel more in control of their money.

The Interac team are natural collaborators. They know that the benefits of co-operation outweigh the risks of fragmentation. The diversity of thought that exists when companies (and even competitors) come together produces better outcomes and solutions. Interac is a proud member of FDATA North America and is actively working with industry and government colleagues across the ecosystem to explore open banking solutions for Canadians.

The financial services company’s Innovation Lab and New Ventures team has a mandate to look ahead at the company’s three plus year horizon for new innovations. They research, develop strategies and pilot new solutions before taking them to market.

A foundational requirement of emerging solutions is to build consumer trust. Canadians need to trust that new technology is not only secure, but that it will provide meaningful benefits in their lives. A recent Interac survey found being in control of their financial data is important to 90 per cent of respondents, and more than half said a new financial data sharing option will “greatly benefit” Canadian consumers.

At Interac, leaders share in this optimism for open banking to support consumer needs and they are committed to collaborating with financial institutions and fintech companies and serving as a bridge for the ecosystem. The team sees great promise for Canada’s future open banking framework to enable the development of data-driven products and services that will increase access to affordable solutions tackling pressing personal and business needs such as debt reduction, benefits processing, financial planning, and the provision of faster loans.

Oscar Roque, VP, Strategy and Emerging Solutions at Interac, sees an opportunity to form a minimum viable ecosystem (MVE) for open banking, grounded in a clear, easy, and transparent consent experience. “Our collective participation in building an MVE will set the stage for data portability and empower Canadians to take control of their data – all for the betterment of our society.”

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Member Spotlight: M Science

M Science is a groundbreaking analytics firm that provides research, data, and pioneering methodologies to financial institutions and corporations. Their experts take unstructured data in near real-time and discern critical insights that help clients make smarter, more informed business decisions. Specifically, the firm provides:

  • Data-driven research that leverages data and domain expertise to provide in-depth analysis and insights on public and private companies.
  • Direct access to experts for more in-depth research and insights.
  • Data analytics that enable investment management and corporate clients to integrate curated data into their own workflow and process.
  • Data dashboards, in a web-based, on-demand platform hosting multi-sourced data feeds that are curated and customizable to clients’ needs.

Founded in 2002, the company serves clients around the world from offices in New York, Portland, London and Hong Kong.

A cornerstone of M Science’s offering is its compliance first approach to partnerships though its comprehensive due diligence program and commitment to consumer privacy.

At the core of M Science’s mission is the belief that data can revolutionize the way the world does business. In a June 2020 Forbes column, M Science’s Michael Marrale explained, “By creating insights derived from disparate datasets and expertly synthesized by alternative data analysts, operators and investors have granular visibility into company business operations.”

The alternative data M Science provides also has revolutionized the marketplace for institutional investors. In an April 2019 Marketwatch column, Marrale said, “Alternative data provides investors with a greater degree of transparency into how companies are performing. From purchase data that tracks retail sales, to social analytics that measure online brand popularity, to geo data that measures locations and traffic, investors can now take a much deeper look into business operating fundamentals in a way our research landscape didn’t previously allow.”

M Science continues to use their insights to help businesses navigate shifts caused by COVID-19, most recently by launching a new Retail and Consumer Brands Intelligence Platform. Leveraging tested analytic models and a myriad of data inputs, the solution delivers insights to more than a dozen industries including Animals and Pet Supplies, Apparel, Garden and Home, Sporting Goods, and Toys and Games. The platform’s focus on ecommerce makes it a valuable tool for traditional retailers and brands, as well as DTC and online-only players. As noted by Head of Product Elizabeth Coleman, this information will prove “more valuable than ever” as players in the space try to address shopping behaviors changed by the pandemic.

In addition to providing a revolutionary approach to data and research, M Science is an industry leader in its commitment to diversity, equity and inclusion. Indeed, this commitment fuels an innovative mindset within the company. M Power, M Science’s diversity taskforce steers recruiting and educational initiatives to foster diverse perspectives and an environment that drives better results. M Science also is proud to collaborate with American Corporate Partners (ACP), a national non-profit organization dedicated to helping military veterans transition to the private sector through one-on-one mentoring relationships with corporate professionals.

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Member Spotlight: Intuit

Intuit is a global technology platform that helps customers and communities overcome their most important financial challenges. Serving approximately 100 million customers worldwide with TurboTax, QuickBooks, Credit Karma and Mint, Intuit believes that everyone should have the opportunity to prosper and works tirelessly to find new, innovative ways to deliver on this belief.

Founded 38 years ago, the work Intuit does starts with a mission of powering prosperity around the world. Prosperity means something different for each person, but finances often sit at the core of living the life you want. Intuit believes that everyone should have access to the expertise, tools, and resources they need to take control of their financial life and pursue their dreams.

Across its platform, Intuit puts the power of technology and data on the side of customers by delivering simple, delightful solutions through their products:

  • QuickBooks is the world’s largest small business platform, serving as the center for small business growth. QuickBooks has helped customers simplify the financial complexities of managing their business and achieve success for more than 25 years. QuickBooks began by helping small businesses manage their books and grew into a platform that helps them get paid fast, manage capital, and pay employees with confidence.
  • TurboTax takes the complexity out of the tax code, helping people get the maximum refund they deserve.
  • Mint is a free personal finance app that helps users to get a holistic view of their financial picture and make smart money decisions.
  • Credit Karma is a data platform that helps people find the right financial products, putting more money in their pockets and providing insights and advice.

Intuit’s mission of powering prosperity also goes beyond its products. Intuit leverages its products, unique expertise, and scale to have a positive impact on communities around the world by investing in people and helping them meet the challenges they face. For example, to help struggling Canadian families and small businesses during the COVID-19 pandemic, Intuit launched its Prosperity Accelerator. The 5-month program encourages startups to leverage the power of AI to advance the financial prosperity of consumers and businesses in North America. Selected startups have access to a corporate and investor mentorship network, dedicated coaching, and the opportunity for follow-on investment from Highline Beta.

Additionally, Intuit QuickBooks leveraged its fintech experience to help customers access more than $1.2 billion in SBA-approved Paycheck Protection Program loans and keep thousands of employees on payroll in the United during the height of the COVID-19 pandemic. QuickBooks also launched a new platform for product-based businesses, offers on-demand accounting experts, and has helped to democratize machine learning by adding it to the company’s offerings for the benefit of small businesses.

Building on its commitment to help small businesses save time by simplifying complex business operations and taking the guesswork out of complicated compliance matters, Intuit QuickBooks Australia became the first accounting software firm in Australia to be accredited by the Data Recipient Accreditor at the unrestricted level and the third data recipient to be accredited overall in October 2020. The landmark accreditation gives Australians greater control over how their financial and banking data is accessed and used and allows them to securely share it with accredited third parties. In addition to saving users additional time – estimated at around eight to ten hours per week – as well as money and resources that are currently spent on financial management, the move allowed real time and simple cash flow management, with highly accurate future forecasting through richer insights.

Intuit is proud to join FDATA North America’s efforts to bring the benefits of opening banking to businesses in other geographies so that individuals and business owners can easily and securely access their banking data allowing them to spend their time focusing on what matters most to them.

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Member Spotlight: Kabbage

In the wake of the Great Recession, Kathryn Petralia and Rob Frohwein launched Kabbage, a startup whose mission would be to use data-driven solutions to empower small businesses to grow with flexibility, efficiency, and prudence. Since then, Kabbage, which is now an American Express company, transformed itself from a funding startup for eBay sellers into a leading cash-flow management platform for all small businesses. Over half a million small businesses accessed more than $16 billion through Kabbage and, during the COVID-19 pandemic, it was the second largest Paycheck Protection Program (PPP) lender in the United States during the first round of PPP, approving nearly 300,000 applications.

By connecting real-time, existing third-party business data to Kabbage, small businesses can be approved for a line of credit between $1,000 to $150,000 in minutes. (Kabbage charges no origination fees, annual fees, monthly maintenance fees, or documentation fees for its small business loans.) It’s new online Kabbage Checking™ account comes with no monthly maintenance fees and small business customers receive a 1.10 annual percentage yield (APY) on balances up to $100,000. Kabbage Payments helps businesses send, process, and settle invoices quickly.

The company’s offerings have been particularly helpful for underserved entrepreneurs. As Kabbage noted in a February 2020 news release, a joint report penned by the Federal Reserve Bank of Atlanta and the Federal Reserve Bank of Cleveland found credit-worthy Black-owned small businesses are about 20 percent less likely than credit-worthy white-owned small businesses to receive approval for financing at both large and community banks. Even when approved for credit, minority-owned businesses are less likely to be approved for the amount they need. Kabbage and its automated underwriting platform improves financing experiences for underserved small businesses by only measuring their true business performance to make credit decisions, creating a blind application process.

With Kabbage, small businesses are approved by analyzing their real-time, and objective, business performance data, eliminating hurdles that may contribute to the struggles minority-owned firms face in traditional loan-application processes. Kabbage also offers data insights to arm entrepreneurs with knowledge to grow their companies. The firm’s Small Business Resource Center includes information on topics ranging from invoicing to competitor analysis to switching checking accounts.

Kabbage was acquired by American Express in 2020 to continue to expand American Express’s B2B offerings beyond their Card business with Kabbage’s broader set of cash flow management tools.

Kabbage co-founder Kathryn Petralia discussed the future of financial technology with Forbes in February 2021. Her comments sum up the benefits of a customer-directed finance system. Petralia said, “It all boils down to the user experience and consumers’ on-demand expectations. Banks are increasingly being commoditized. Fintechs will become the de facto face of money management, as they provide exceptional user experiences that remove friction points common with traditional banking. It shouldn’t take days or weeks to open a bank account, multiple days to settle funds, or months to be approved for a loan. Fintechs will make financial services more seamless and accessible for everyone.”

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Member Spotlight: BillGO

Founded in 2015, BillGO is driven by the core belief that everyone deserves access to a healthy financial future. BillGO helps facilitate this access by providing consumers, billers, fintechs and financial institutions with a faster, smarter, more secure way to pay and manage bills and subscriptions.

So how can bill payment technology improve financial wellbeing?

Consider this: even though most consumers trust financial institutions (FIs) to manage their money, only 22 percent of them use the bill pay technology their FIs provide. Seventy-six percent, meanwhile, pay their online bills directly to biller websites, which is both a cumbersome and risky method of managing bills.

When asked why they reject FI-offered bill pay technology, many consumers say their FI bill pay technology is outmoded. It is difficult to use, offers little visibility and fails to provide real-world bill payment confirmation. This lack of confirmations has real-world results – namely late fees. A 2019 study revealed late credit card payments alone cost consumers up to $3 billion a year.

By offering a modernized, real-time bill pay solution, BillGO not only helps consumers avoid late payments and fees by sending due date reminders but also provides consumers with a single, consolidated tool to manage bills and payments, eliminating the need to log into multiple biller sites each month to manage their financial obligations.

BillGO’s mission doesn’t stop there. In 2020, BillGO launched its Bill Pay Relief Hub, a resource originally conceived to help consumers impacted by bills brought on by COVID-19. Since then, the Hub’s mission has expanded, providing help to consumers facing an array of economic setbacks. The Hub now connects consumers to more than 300 businesses and FIs offering payment relief. In 2020, Banking Tech Awards named the Hub one of 2020’s Best COVID Responses by a Fintech.

Speaking of awards, Fortune recently named BillGO one of the “Best Places To Work” in the financial services industry. And last March, Forbes named BillGO one of “America’s Best Startup Employers” because of its reputation as an employer, its high levels of employee satisfaction, and its potential for growth.

BillGO’s award-winning real-time bill management and payments platform transforms the dreaded necessity of managing and paying bills into an opportunity for financial well-being. The company currently serves more than 32 million consumers, 8,000 FIs and nurtures relationships with more than 170,000 billers and suppliers nationwide and is headquartered in Colorado, with offices in Ohio and Washington state, employing more than 250 people.

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Member Spotlight: ValidiFI

Can open finance positively impact the traditional financial services sector? ValidiFI has proven it can.

ValidiFI is a technology company that delivers data solutions to business and financial service providers. Simply: through a combination of technology and strategic partnerships, ValidiFI creates better ways to validate and analyze customer information.

ValidiFI’s data—which is sourced from banks, payment processors, financial platforms, and hundreds of thousands of businesses—comprises the most comprehensive lake of financial information in the industry. Financial services firms harness the data to improve account openings, credit decisions, payment processing, fraud detection, and risk segmentation. Businesses of every size—from new startups to public companies—use ValidiFI solutions to increase sales and facilitate payments.

Take managing underwriting and risk, for example.

It is becoming increasingly difficult for financial institutions to properly segment their applicants while identifying who will be a good and bad customer. ValidiFI’s alternative data solutions help firms identify and segment the risk of applicants based on their employment, income, and bank data. ValidiFI’s Payment Instrument (PI) Risk Score analyzes thousands of attributes to enhance the financial profile of the consumer, helping to mitigate fraud, reduce defaults, and reduce returns.

ValidiFI’s tools also help financial services firms stay compliant with government and organizational regulations. Using Bank Account Validation (BAV), firms can adhere to the Consumer Financial Protection Bureau’s payment provisions. ValidiFI also offers comprehensive Account Validation services to help maintain compliance with Nacha’s WEB Debit Rule.

According to ValidiFI, accessing a greater range of data is essential as the United States and Canada climb their way out of the COVID-19 health and economic crisis. ValidiFI said companies that are able to adapt to change by utilizing alternative underwriting methods and data, for example, will recover and advance more successfully.

ValidiFI joined FDATA North America in March 2021.

President and Chief Operating Officer Jesse Berger said, “Access and insight into the rapidly changing regulatory environment for open banking and finance is crucial. It is vital for the development of innovative financial data and technology products like those offered by ValidiFI and other FDATA members. With FDATA’s support, members are ensuring financial products give consumers and businesses more choices and competitive service offerings.”

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Member Spotlight: Fiserv

Established in 1984, Fiserv is a leading global provider of payments and financial services technology, including data aggregation. Today, the firm, which has been named among Fortune “World’s Most Admired Companies” for eight years running, helps thousands of financial institutions, millions of businesses, and tens of millions of consumers in more than 100 countries move money and access information.

Fiserv is among the world’s most admired companies for good reason. Just consider, for example, how it has revolutionized consumer financial management. The company has made pioneering contributions in digital banking, electronic bill payment, person-to-person payments, and invented the e-bill.

Fiserv understands that consumers are not thinking about financial data – they’re thinking about buying a home or putting a child through college – or if they have enough money in their bank account to go out to dinner tonight and still cover the bill payment that is due tomorrow. Data is at the heart of what Fiserv does every day. From moving more than $75 trillion each year to delivering a better customer experience to preventing fraud, Fiserv enables today’s digital economy while solving real-world problems for real people and real institutions.

Leading financial institutions and technology providers use AllData® Aggregation from Fiserv to access real time consumer financial data from more than 18,000 unique data sources. Given data security and regulatory compliance are crucial, Fiserv is also focused on reducing risk associated with data sharing via its AllData® Connect product.

Fiserv plays a unique role in the market as both an aggregator and data source – with a client list that includes thousands of banks and credit unions. A range of companies as well as consumers rely on account aggregation solutions from Fiserv, from fintechs disbursing wages on-demand, to lenders automating and expediting the lending process, to financial institutions helping customers gain insight into investments and spending. Fiserv brings decades of data aggregation expertise to the industry, striving to improve the secure exchange of financial data, and deliver value to clients and consumers while helping move the industry forward.

Find out more about Fiserv at www.fiserv.com/alldata.

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Member Spotlight: Envestnet | Yodlee

A founding member of FDATA North America, Envestnet® | Yodlee® is one of the world’s leading data aggregation and analytics platforms for financial service providers. Our platform has proudly fueled innovation for financial institutions (FIs) and FinTech for more than 20 years, and has refined the art of normalizing, categorizing, and enriching data, making the information derived from these records reliable and insightful. As a result, today Envestnet | Yodlee helps more than 1,400 financial institutions and fintech companies, including 16 of the top 20 U.S. banks, to deliver innovate products and services to more than 33 million consumers across the globe enabling them to live better financial lives

Envestnet | Yodlee’s Financial Wellness Solutions, for example, are white labeled applications that leverage more than 17,000 data sources and incorporate leading data security, regulatory compliance, and privacy practices enabling FI and FinTechs to give consumers the broadest possible view of their investments, savings, and debts. Using Envestnet | Yodlee FastLink, consumers can securely link all of their financial accounts – including credit cards, mortgage statements, rewards programs, and more. The FinApp series also can also provide consumers with expense, income, and cash flow analyses and it estimates net worth, and also uses artificial intelligence to dynamically measure financial health and to create financial forecasts that help manage recurring income and financial obligations.

The company also is leveraging its data to help businesses and policymakers make better decisions. During the COVID-19 pandemic, for example, Envestnet | Yodlee has used its resources and capabilities to help its partners, economists, and lawmakers track and understand the impact the virus has had on American families. The company examines spending trends on a week-to-week basis while also looking at changes in net employment by industry.

Envestnet | Yodlee is an industry leader in making data more accessible and secure via open banking connections. Envestnet | Yodlee provides a trusted and secure open ecosystem for all financial institutions and FinTechs by providing responsible data access through our enhanced governance package, open banking-ready platform, and leadership in security and privacy practices so our customers can easily deliver digital financial experiences that enable the needs of the consumer to achieve financial wellness. As an independent financial data aggregator with a diverse customer-base composed of financial institutions, wealth management firms, FinTech, and other innovators, Envestnet | Yodlee’s Open Banking Central offers a robust, multi-country pathway so our customers can quickly participate in the open banking ecosystem.

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