fintech Archives - Page 12 of 14

December 2, 2015July 6, 2016

Citi’s Andres Wolberg-Stok: “The bank of the future understands how to become a whole-life partner for every one of its clients”

Andres Wolberg-Stok is the Global Head, Emerging Platforms and Services at Citi.

What are some of the most transformative things you’re seeing to impact banking? What are some of the most overblown?

The most impactful thing happening today in banking -and in fact it’s happening not just in banking but across pretty much every consumer-facing industry- is the digitization and the user-experience revolution. Now that we all spend so much of our time on our smartphones, those apps we use all the time have reset the bar for what we expect of every interaction. We all demand that everything be as simple and intuitive as the best apps out there from digital companies. It sets a really high standard for everyone else to strive for, and in some cases it requires a reinvention of the entire underlying process. And all of that is a good thing, of course.

You were the first bank to have an app for the Apple Watch. Can you share your thinking about mobile/wearable banking?

At Citi, we are always looking for ways to put our clients in control of their finances and to help them bank however and whenever they want. We’ve been on a journey of innovation for decades, led by that principle, working to bring your accounts ever closer to you. We pioneered the ATM in the 1970s, so you wouldn’t even need to step inside a branch. We were one of the early leaders in online banking, in the early oughts, so you could bank from home or from your office. We were the first major U.S. bank to offer a downloadable mobile banking application, back in 2007, putting the bank in your pocket. Last year, we became the first major U.S. bank to offer no-login access to your accounts (we were issued a U.S. Patent for that this year). And as you point out, this year, we became the world’s first bank with an app for the Apple Watch. You can see the progression, right? Ever closer, ever more available and closer to you. Wearables are here to stay, and your money has a rightful place on them. I just don’t know what we’ll need to do in order to get closer to you next time — what’s next, banking implants?

Your own work experience is truly global. Is that a competitive advantage in your role?

Citi is the world’s leading global bank. We operate in some 160 countries or jurisdictions, with consumer operations in 24 markets at this point. Globality is in our DNA, and it helps us cross-pollinate the best ideas from our colleagues around the world. It also allows transfusions of talent, and of regional perspectives, around the globe, and it helps us serve well those of our clients who are global themselves. To be succefully global, you have to be global and you also have to be local everywhere you are. In fact, together with digitization and urbanization, globalization is one of the three major strategic themes that drive our work.

We read a lot about the competitive pressures on banks. What will a bank look like in the future? What will be its main role and value proposition to customers, the financial ecosystem, etc.?

The bank of the future recognizes that every man, woman and child carries a supercomputer in the shape of a smartphone. It knows people want to pick and choose their experiences, and that they probably do not want to depend for everything on a single supplier of financial services. The bank of the future is the one that understands how to become a whole-life partner for every one of its clients, how to earn a spot at the heart of their individual web or assembly of financial services, and how to be by their side every step of the way for their day-to-day needs as well as for the major moments in life. That bank of the future works with, not against, the fantastic ideas coming out of the Fintech ecosystem – it figures out how to become an integrator of Fintech value for its clients. That’s what, here at Citi, we call “Fintegration”: the integration of Fintech. Banks have the heavy compliance machinery, the track record, the know-how to keep your money safe. Fintech companies can come up with great new experiences, and they need the scale. Fintegration is a win-win all around, starting with the client.

December 1, 2015

Trulioo’s Stephen Ufford: “Missing element to provide financial services for the 2.5 billion unbanked lies in a digital footprint”

Stephen Ufford is CEO & Founder of Trulioo

What is Truiloo? What was the inspiration/genesis story for why you founded the company?

Data has been around for decades, but the industry has drastically evolved in the last 10 years thanks to the Internet. I fell into the industry quickly after moving to the U.S. after high school. As a Canadian living in America, the experience of proving my identity and establishing credit was horrendous and inefficient. I have spent years building a good credit history for myself in Canada, but when I crossed the border and entered into the states, it felt like someone just hit the reset button and my identity was non-existent. I instantly knew this was a huge problem that could easily be fixed and launched iQuiri.com, one of the first companies that made consumer credit reports and scores available online. This was my first foray into the data economy.

Fast-forward 9 years and I’ve successfully launched and exited three data-driven companies with my co-founder, Tanis Jorge. We both decided our next company would have a more meaningful and significant impact on lives around the world. We wanted to go after something profound that would improve quality of life – not just for you and me – but for the man in Chile who doesn’t have access to financial services and wants to start his own business, or the woman in India who works 12-hour days and walks another 2 miles at the end of her day to pay for water. The missing element that could help provide access to financial services for the 2.5 billion unbanked citizens of this world lies in a digital footprint.

Why is identity verification important? What kind of opportunities does doing it at scale open up?

In today’s digital world, trust is the backbone to the success of this truly global phenomenon. What really greases the wheels of today’s fast-growing global economy is trust. As in most online interactions and transactions, anonymity becomes the biggest threat to trust, hence why identity verification is an important element for creating a framework of trust online.

The ability to instantly verify identities around the world will break down the walls that create barriers for cross-border commerce, payments, communication, and consumption. Verified identities helps build the first layer of trust between consumers, merchants, financial institutions – pretty much anyone doing business online.

Has the proliferation of social media made it easier/harder to identify people correctly?

Social media is a double-edge sword. While it offers an abundance of unique data about consumers, there are also ways to create fake accounts. When verifying identities online, it’s best practice to have a layered approach that leverages multiple data sources in combination with advanced machine learning algorithms and fraud prevention tools so that you can weed out the fake accounts before they engage in nefarious online activities.

What’s it like for a Canadian fintech/big data company to compete globally? Are there unique challenges/opportunities?

Globally, Canadian companies have the upper hand in big data thanks to the country’s revolutionary privacy laws and transparency. We have the legal framework, expertise, and know-how needed to be a global leader in the data-driven economy.

Canada is uniquely positioned to take advantage of the growth in the data economy, especially after the recent safe harbour rulings in the European Union. U.S. companies are now scrambling to find a solution for their data storage needs leaving the door of opportunity wide open for Canadian companies.

Designed to protect both the consumers and the companies that are collecting personally identifiable information (PII), the Personal Information Protection and Electronic Documents Act (PIPEDA) was enacted in April of 2000. PIPEDA provides individuals with the right t know why any group collects or discloses their personal data. This level of transparency offers consumers peace of mind when they are looking to invest, buy products from, or associate with Canadian businesses. PIPEDA also ensures that the companies collecting an individual’s data only use the information for a specific purpose with consent from the individual.

Due to the increasing number of data breaches, how PII data is being handled by businesses and government is at top of mind of consumers, policymakers, and regulators. Exporting PII across countries and jurisdictions is a recipe for disaster, increasing risk for data breaches and regulatory compliance issues. Canadian companies are in the best position to enable the enterprise to leverage their global data assets with advanced technologies in a secure, highly regulated environment.

Where is your business headed in 2016? New products/services/geographies?

We are very excited to announce that our global identity verification API or platform, GlobalGateway, now verifies over 4 billion consumers around the world, the largest Know Your Customer (KYC) coverage in the market. Riding on the heels of China, we recently secured unique data sources in India, which will enable our clients to quickly expand into emerging Asian markets that are dominating our global economy with its unprecedented growth.

We are on a mission to provide verified identities for the entire global population, making Trulioo the largest marketplace for global data where businesses and organizations have instant access to consumer information to perform specific checks and activities granted by the user (consumer).

We will continue to disrupt traditional data aggregators around the world with our unique market place model while raising the bar for consumer consent and privacy protection. I believe that Trulioo will play an essential part of developing Canada’s global reputation as a safe haven for digital information into a robust new industry and major contributor to our economy.

Photo credit: charlesdyer / VisualHunt.com / CC BY

November 30, 2015

The Startups: Who’s shaking things up (Week ending November 29th, 2015)

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming weekly newsletter.[/alert]

Stephen Klein: LOYAL3 is turning IPO stock into a powerful, new brand engagement currency (Tradestreaming)
With LOYAL3, it’s not just investing in companies you know – it’s investing in brands you love. The company is building an interesting distribution model connecting investors with brands and brands with their customers.

RealtyMogul Completes Innovative Debt and Equity Combo Transaction (BusinessWire)
RealtyMogul announces a first of its kind, full capital stack transaction combining debt and equity with the successful purchase of a 112-unit apartment in North Carolina. Investors using equity crowdfunding for real estate are getting treated to a lot of innovative investment opportunities.

The emergence of regtech as a catalyst for innovation (BANKNXT)
What are regtech (regulation technology) startups working on, and can they solve banks’ compliance headache? This article describes what regtech is and how it can jumpstart a lot of innovation across the fintech ecosystem.

Fundrise’s Brandon Jenkins on the need to keep raising the quality of real estate deals online (Tradestreaming)
Fundrise is seeing a lot of success with its online real estate investing platform. And now, it just raised $50M for an e-REIT for everyone as part of the new crowdfunding rules.

VCs investing over $500 Million in follow-on funding for companies crowdfunding (Crowdfund Insider)
If over $500M of follow-on funding happened off your platform, you’d want a piece of that, too, right? That’s one big reason why Indiegogo is interested in getting into the equity crowdfunding game.

StockTwits and Robinhood: Teamed up to Provide Social Trading (Howard Lindzon)
As part of a wider integration push, Robinhood announced an integration with the investor social network, StockTwits. Like an investment idea your connection is pitching? Click and trade – for free.

Bleu Unveils its Beacon-Powered Point-of-Sale Solution (Finovate)
Bleu’s solution around Bluetooth technology can move payment data over long distances and ranges: from a nearby transaction at a fast casual restaurant terminal to reaching a terminal in a fancier restaurant that may be several meters away.

Apple Pay to Be Available in China by February 2016 (Let’s Talk Payments)
In the latest quarter, China amounted to 27% of Apple’s revenues and now the WSJ reports Apple is launching its payments into the Chinese market early next year.

Trōv: a new way to insure the things people care about (Daily Fintech)
“Trōv is an app that collects data about your things, builds it into a list, then provides machine enhanced risk pricing for single item coverage. Trōv provides micro-duration policies (down to the second), charges micro-premiums (down to the cent) and uses chat robots to manage claims.”

Startups raising/Investors investing

Vanare | NestEgg Raises $3.25 Million in Seed Capital to Drive Fintech Innovation (Biz Journals)
Last week, Vanare announced the launch of Synapse, the first-ever fully customizable white-label roboadvisor API. The simple, flexible and scalable solution allows financial service firms the ability to create their own user interface (UI) so that their clients have a seamless experience using the firm’s existing website.

Interview with Santander InnoVentures managing partner Mariano Belinky (Business Insider)
Santander InnoVentures managing partner Mariano Belinky talks blockchain, roboadvisors, and challenger banks.

Online Lender LoanDepot Tries Plan B After Canceling IPO (American Banker)
Bryan Sullivan, the CFO at LoanDepot, talks about its growth prospects without fuel from an initial public offering, how getting consumers to opt for home equity lines of credit is tough, and why he considers the nonbank a disruptor.

Photo credit: V31S70 / VisualHunt.com / CC BY

November 19, 2015May 13, 2019

[podcast] LendKey’s Vince Passione: There’s no Uber-ization of finance because the banks will adopt technology. Eventually.

As the interest in fintech and financial services in general continues to grow, there’s been chatter of an Uber-like disruption by the startups in the space.

Our next guest, Vince Passione would beg to differ. He’s the CEO of LendKey which provides the incumbent banking system the digital tools it needs to sufficiently compete in marketplace lending. The issue right now isn’t whether marketplace lending is going to grow, it’s more of who takes the lead in this space. It’s worth listening to Vince because he’s been a major part of the move to digitize financial services, leading Citi’s move online and Ameritrade’s Institutional Client group.

This move to online lending started with pure play disrupters like Lending Club and Prosper and is moving to a more collaborative environment with traditional institutions following quickly with their own offerings powered by companies like LendKey. The company has 320 clients and has helped originate over $1 billion in loans with its banking clients.

In Vince’s opinion, there will never be an Uberization of finance because banks and credit unions do eventually adopt technology. They survive. Same thing happened in Internet banking.

There is an entire system of trust and regulatory framework built around banks making them very hard to disintermediate. In this sense, LendKey is providing the shovels and pickaxes for the marketplace lending goldrush and it’s selling them to the big boys.

Listen to the FULL episode

In this podcast, you’ll hear about the following:

How and why lending-as-a-service is being adopted by traditional lenders
Why banks aren’t being Uber-ized
How this whole land grab for online lending will play out
New consumer demands for increased transparency, speed, and customization in payment terms
How future clients desire to engage with digital lending brands
How digital decision making is occurring at top performing banks

This week’s sponsor

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To learn more, go to www.collective2.com/tradestreaming and as a Tradestreaming listener, you will get $55 off the first strategy you publish to Collective2.

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November 18, 2015

5 trends we’re watching this week

Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s weekly newsletter (published every Sunday).

1. Computers vs. Humans: Who wins the investment game? (Tradestreaming)
Do humans have an innate ability to pick winning stocks or should we turn everything over to the machines. A frank conversation with 2 experts moderated by Tradestreaming’s managing editor, Zack Miller and hosted on Dealbreaker.

2. A Future Where Virtual Reality and Finance Converge (Finance Magnates)
In this week’s Fintech Spotlight, Finance Magnates delves into how virtual reality could become a big data tool of the future in the finance industry.

3. The Next Fintech Boom: Resource Maximization (Bank Innovation)
Former Thomson Reuters CEO, Tom Glocer predicts fintech startups to begin squeezing more out of the financial system. “Think of all the underutilized financial resources out there — credit lines, savings, advisory, illiquid assets. All are ripe for maximization.”

4. Why Every Financial Institution Needs a Digital Champion Now (The Financial Brand)
Is anyone spearheading your organization’s digital strategy? Here’s what banks and credit unions should look for when creating this new role.

5. Robo-Advisors Squeeze Advisor Profits, Not Fees (Michael Kitces)
Michael Kitces with a thoughtful analysis of the robo-advisor trend and how it’s impacting the AUM fees investors pay (it’s not what you think it is). While fees don’t seem to be dropping, profit margins are indeed getting squeezed. Worth a read.

November 16, 2015

The Startups: Who’s shaking things up (Week ending November 14th, 2015)

[alert type=white ]Every week, Tradestreaming highlights fintech startups in the news, making things happen. The following is this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming weekly newsletter.[/alert]

Funding Circle’s Sam Hodges explains how tech gives SMBs access to much-needed cash (Tradestreaming)
Funding Circle is becoming a massive, global business. And it’s doing so by helping the little guys. Sam Hodges gives Tradestreaming an exclusive interview after his firm’s acquisition in Germany.

PayPal and Lending Club Prove Fintech Is Ready to Sit With Banks at the Grown-Ups’ Table (TheStreet)
Banks are feeling the pinch from fintech and that may be an opportunity for investors.

Mighty Is A Funding Platform For Personal Injury Lawsuits (TechCrunch)
As anyone who has ever been in court knows, lawsuits are often a long, tedious process. This is especially true with lengthy personal injury cases. Mighty is bringing crowdfunding to the rescue.

Openfolio is building a social trading network that works (Tradestreaming)
Openfolio is building a new kind of social trading network built upon transparency and collaboration. Here’s how.

P2P Lending Is Profitable, Even In A Recession (TechCrunch)
A surprising career change finds a battle-hardened entrepreneur turning to peer to peer investing for the next stage in his career. Surprisingly for him, the market has held up in spite of a challenging economic climate.

I (Shall Happily) Accept the 2016 Nobel Prize in Economics on Behalf of Bitcoin creator, Satoshi Nakamoto (HuffPo)
“I am completely serious in suggesting Satoshi Nakamoto for the Prize. The invention of bitcoin – a digital currency – is nothing short of revolutionary.”

Startups raising + investors investing

Fintech investor, Pascal Bouvier on where there’s big money to be made in fintech (Tradestreaming)
Interesting view from fintech investor, Pascal Bouvier on where he thinks current opportunities lie for fintech investors and entrepreneurs and the overcrowded spaces he’s avoiding.

The 2015 Fintech Finance 35: The Financiers Who Place the Bets (Institutional Investor)
For the bankers, venture capitalists and others financing and facilitating the fintech explosion, it’s not just a money game. Strategic vision and networking are just as critical.

CircleUp Banks $30 Million to Help Investors Find Top Food Startups (WSJ)
CircleUp raises a $30 million Series C round led by Collaborative Fund to grow its equity crowdfunding platform for consumer goods.

Peer-to-Peer Marketplace Peerspace Secures $5M Series A (Crowdfund Insider)
PeerSpace, a peer-to-peer marketplace dedicated to uncovering unique short-term commercial spaces for events, announced a $5 million Series A led by Foundation Capital.

Bessemer Backs Consumer Lending Startup, Bread (WSJ)
Bessemer Venture Partners has made its first investment in a new alternative lending startup in about 10 years, leading a $14.3 million Series A round in Bread, the investment firm told VentureWire.

Rakuten establishes $100 million fintech fund (Finextra)
Japanese e-commerce giant Rakuten has established a $100 million fintech fund to invest in disruptive early to mid-stage startups in Europe and North America.

Roostify Garners $500,000 in Funding from Wells Fargo Accelerator (Finovate)
Roostify accelerates and streamlines the home loan and closing experience. The startup joins the Wells Fargo Accelerator Class with the investment.

Anthemis Group Announces North American Expansion (Anthemis)
The new location is an obvious next step for early stage, fintech-focused firm, which counts a significant number of U.S. companies in its portfolio, including Betterment (New York), Trov and Automatic (San Francisco), Payoff (LA), Blueleaf (Boston) and Simple Bank (Portland).

Robo-advisor MoneyFarm raises EUR16M for UK launch (Finextra)
Italian digital wealth management startup MoneyFarm is preparing to enter the UK market after raising EUR16 million from Cabot Square Capital and United Ventures.

NCR Gets $820M from Blackstone to Accelerate Transformation (American Banker)
The investment accelerates NCR’s overall plan to transform itself from a reliance on ATM and other hardware, into a software and services provider.

November 13, 2015

How Funded Today’s Zach Smith raises millions of dollars for its crowdfunding clients

zach smith and crowdfunding agency, funded today

While crowdfunding is a great example of the growing democratization of capital formation online, many of the top campaigns turn to professionals for help running their campaigns. One of these professionals, Zach Smith, founded a firm to do exactly that. Funded Today has helped over 150 start-ups achieve success. In one example, with the help of Funded Today, BauBax raised $9.1 million to launch its travel jacket, making it the most funded clothing project in the history of crowdfunding and the 4th most successful Kickstarter project of all time.

Zach Smith, co-founder of Funded Today joins Tradestreaming for an exclusive interview.

Why would crowdfunding campaigns turn to an agency? Can you crowdfund on your own?

You can crowdfund on your own, but any campaign needs some marketing in place, and unless you’re an expert in PR and paid media, you’re leaving a lot of money on the table. With a campaign that has a good product and does no marketing, Funded Today increases pledges by 1000%.

For example, if a campaign is averaging $500 to $2,000 per day, we could take them to $20,000 per day. Magbelt is an example of one of our clients. We increased pledges by 10,000%. Even if a client is running a successful crowdfunding campaign, we can still reach more people than anyone else and drive additional sales because we’re experts in paid media on multiple channels. We can reach over 2 billion people by honing in on likely buyers. We will always augment whatever a client is already doing.

Has crowdfunding gotten more competitive — if so, how?

It used to be that you if you had a good product, you could put it on Kickstarter and reach out to press and they would cover it. Or, if a company had a good product, they would sell X many units per day and stay within the top 5 on Kickstarter (essentially, you’d stay within the top 5 on Kickstarter and continue to generate more sales because you’re in that popular category).

Now, the crowdfunding market is pretty saturated, and it’s not as easy to be a success. With that said, if you have a successful campaign, the market is much bigger, so instead of having a $250K campaign, it might result in a $2.5M campaign.

What are some of the tools in your toolbox that help you be successful for your clients?

We have worked on over 300 campaigns, so we have audience demographics that we use in our social media marketing that we can utilize to hone in on markets that work well and convert well. We can also scale a campaign with just two weeks or four weeks, whereas most people wouldn’t be able to scale that quickly. And, we have credit that we can leverage, so if there’s a campaign that we know will have a good ROI we can spend half a million dollars to front it.

Essentially, we are experts in paid media because the audience for a campaign is the most important. And finally, we know how to reach out to media and generate publicity for our clients. In fact, just this week, we became the first crowdfunding agency to ever represent clients in the top two most popular campaigns on Kickstarter (Xpand Lacing System and UsBidi).

What components are necessary for a successful crowdfunding campaign?

We have something we call the Crowdfunding Success Matrix : there are 4 quadrants that a campaign fits into:

good product and good marketing
a good product with bad marketing
a bad product and bad marketing, called “outer darkness,”
a bad product with good marketing, a “black hole”.

We also have a formula we came up with: Ubiquity + Techy (i.e. groundbreaking technology in their field) + Chill Factor Story + Amazing Video = huge chance of success.

So, ubiquity means is it everywhere. One example is one of our clients called Trunkster. They developed luggage and of course everybody has luggage. Another example (not one of our clients) is Pebble Watch: it’s a watch but the client made it like an Apple iPhone. Or the Coolest Cooler (not a Funded Today client). SilverAir invented socks that don’t stink. By soaking the fibers of the cloth in silver you can wear their socks for 10 days. These are a few examples of clients that fit that success formula.

What does crowdfunding in the future look like? Do you see trends from your clients and in the market? Will more bigger brands enter the space?

Your question comes at the perfect time. In fact, Hasbro, one of the world’s leading toy and game manufacturers, just announced they will be doing a crowdfunding campaign as a way to connect with gamers. So, definitely, we will start to see bigger brands entering this space, and we already are. Also we will see more equity crowdfunding. Typically, you’re pledging to get a perk, and this is the type of crowdfunding we specialize in.

November 12, 2015

[podcast] Stockpile’s Avi Lele hopes to get investors excited about stocks again

Avi Lele, Stockpile's CEO — Avi Lele, Stockpile’s CEO

In a world of roboadvisors, index funds, and algo trading, investors have learned to cut costs and simplify their investing. In some markets, over 90% of all trading is done by machines and we know markets are moved by large indices, not retail investors

It’s fair to say that we’ve lost that connection between an individual investor and the company behind a stock he or she owns. We may lack the connection but it’s also hard to come by the magic moment when an investor falls in love with a company and goes out to buy the stock to show his allegiance and affiliation.

Founder and CEO of Stockpile, Avi Lele joins us to talk about what it took to build a fractional share brokerage and how doing the small things right has positioned his company to just close a $15M investment round and launch in a big way.

Listen to the FULL episode

In this podcast, you’ll hear about the following:

Stockpile’s retail product and distribution strategy
How gift cards for stock works
How Stockpile is combining physical and virtual distribution strategies
How education plays a major role in investing discovery
The challenges and opportunities in building a fractional brokerage

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November 12, 2015

Fintech investor, Pascal Bouvier on where there’s big money to be made in fintech

Pascal Bouvier is an experienced fintech investor and joins Tradestreaming today to talk about his investments in the fintech space, how the market has changed over the past few years, and where this investor thinks the opportunities lie ahead. Follow Pascal on Twitter, LinkedIn, and his blog.

Who are you and what do you do?

I am a fintech investor who brings both operational and investment experience to the table. I have worked with large financial institutions as well as with startups and post-revenue small-sized businesses. I have also worked with technology and non-technology businesses. This uniquely positions me as an investor in early stage companies in the financial services industry. Further, I do have a global background having worked on several continents, a requirement given the financial services industry is a truly global industry.

What’s your view of fintech and finserv and how has it changed?

I have developed an expansive model where finserv equals fintech, like it or not. By that, I mean all finserv participants will have to behave like technology companies going forward. This means they will have to stop creating products and pushing them in unilateral ways to consumers and users and they will have to start to focus on technology, data and in a broad sense, customer experience.

All participants will have to do so, whether they are startups or incumbents, large or small or service providers. This will have, and is already having, a profound impact on how the industry is organizing itself. Namely, the customer and his needs – be it an individual or a corporation – will need to be front and center as opposed to wha the financial institution thinks the customer needs. This is both a subtle and profound departure from past and current paradigms.

In many ways the industry will have to reorganize itself around customers’ lifetime events via contextually relevant services and move away from a product-centric approach. That is the greatest insight one can have as a fintech investor.

You have a very interesting work history, with experience on the operator side in software and other industries. How has this impacted your worldview of fintech as an investor?

I was a commercial banker which influenced my view on commercial credit. I worked as an operator with various early stage startups, as well as high growth post revenue SMBs, which helped me understand the reality of day to day tactical operations and long term strategic vision in a very material and tangible way.

I also have acted as an investor in the banking world and in the VC world. My fintech investment style has been heavily influenced by my learnings as an operator. Early stage investing is not purely informed by dry analysis and spreadsheets. It is informed by how one relates to individuals and teams and by how one understands how operational complexity grows as a startup grows and experiences traction. I believe this has made me a better investor.

Where’s your sweet spot for making an investment? What does your target investment look like?

Based on how I see the financial services industry evolving, I believe the most effective sweet spot at this point in time is to focus on seed, Series A, and Series B investments where the investment size ranges from $500k to up to $5m. I do like to go above $5m for exceptional investments. I like that flexibility.

From an operational point of view, this means I focus on startups that have a product or platform in use with customers, whether in beta or whether live, and whether pre revenue or post. I shy away from ideas or technology that has yet been productized. I focus on companies that are about to hit product/market fit or already have a strong sense of product/market fit and who are experiencing the first inklings of pipeline growth. Although my view is global in nature, I have lately focused on Europe and the US.

How do you compare consumer fintech opportunities with more B2B ones?

Speaking of the firm I recently left, the portfolio is evenly split between D2C and B2B. some of the D2C are really B2B2C plays. As for my natural inclination, it really depends on the sector I look at.

The industry is comprised of five sectors: lending, capital markets, insurance, asset management, and payments. Given a particular geography and time for each of these sectors, I would be more attracted to D2C models, whereas this may change to B2B models otherwise. For payments, I prefer B2B by far, as getting traction in D2C payments is extremely difficult. In banking and insurance, I would prefer digitizing distribution channels which may mean D2C or B2B2C. For asset management or capital markets I would favor B2B models.

It really depends. Consumer plays are so much more difficult to hit just right that there is a natural comfort zone around B2B models, in my opinion.

What do you think is the most exciting investable part of fintech right now?

I will give several answers. First, insurance because the industry has barely been touched as of yet by disruption, so the opportunity is immense. Second, anything that has to do with identity management as applied to any of the five sectors comprising the industry. Third, and this is a new trend I am focusing much more on these days, financial wellness, which can be equally applied to the Western world as to emerging markets. Financial wellness is going to be huge in my opinion, as it sits at the intersection of the expectations of customers and a better stewardship of money, in general (not that I expect us to be completely weened from excessive consumerism mind you, but still I do expect changing times ahead).

What’s the most overdone part of fintech? Where are expectations too high in fintech investing?

It is always difficult to answer this question. So much depends on geography and timing. I would tend to answer that retail/consumer payments in the US is overheated and extremely crowded. “Digital” banking also seems to fall in that category. Finally, one particular model past its prime is pure retail roboadvisory in the wealth management space.

November 10, 2015

Bought by Many’s personalized insurance products are changing the way we manage risk

Steven Mendel is the CEO and co-founder of Bought by Many.

Why is buying insurance so hard?

There has been a lot of innovation/ change in the way in which consumers buy and interact with most retailers/ distributors in most industries, just this change has not arrived in the insurance world – so we are all forced to deal with intermediaries to buy insurance through poorly designed web offerings. So rather than saying buying insurance is hard, I prefer to say that it hasn’t moved on, in the same way that most other industries have.

Also, everyone dreads having to renew/ take out an insurance policy, not knowing who to buy from, how much cover to buy, whether they are being ripped off, etc.

How does Bought by Many change that? How does it work?

Consumers are used to transacting on their mobile phones, and indeed 70% of Bought by Many members join us on a mobile device – this is the medium consumers are now demanding.

We enable our members to interact with others looking for the same type of insurance to discuss this with them. We work with each group to help individuals get a better deal on their insurance.

We write a lot about the complexities around insurance decision-making and encourage our members to share their insights as well, making the whole experience much more social and less about the individual, thereby giving our members much more comfort that they are making a good decision.

What’s the genesis story — where did you and your co-founder come up with the idea?

Was there a personal reason? Both Guy and I have been frustrated with the financial services industry that takes advantage of individuals in a way that the industry doesn’t take advantage of other corporates – evidence is widespread: group life assurance is much cheaper than individual life assurance — retail share classes in unit trusts can be 3-5 times the price of institutional share classes for the same fund.

My personal example was in private medical insurance where the price for me was four times as a self-payer compared to the same offering from the same insurer when part of a corporate scheme.

How does arranging insurance buyers in groups change the dynamics of the underwriting/brokerage relationship? At what benefit to your users?

We cut the traditional face-2-face broker out of the equation – which has been costing consumers 30-35% per annum and instead use that saving to improve terms for our members.

You recently bought an insurance underwriter in the pet insurance industry. Why?

We are keen to show consumers and the industry what a great mobile-designed customer experience can be like in the insurance industry and found that the only way to achieve this was by being able to own the whole customer journey – hence the acquisition. Watch this space for the launch of this new experience soon….

What’s next for users of BBM — product enhancements/services?

So the roll out of the new customer experience for a small number of our groups is definitely next. We’ll then be expanding this to a number of other groups. We recently launched our first private medical insurance groups, which you’ll appreciate from my personal experience above, was important to me. We’ll be adding more medical insurance groups in the coming months, so if you don’t find what you are looking for now, let us know!