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Finicity has announced signing a data access agreement with Green Dot. Thought Machine raises $200m in series C funding round to bring. Mastercard gets U.S. DoJ green light for Finicity deal GRAPHIC-Global equity funds draw biggest inflows in over 7 months - Lipper. Finicity provides real-time financial data aggregation and insights. See Finicity competitors, funding info on Coscout.
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Is It Safe to Share My Information With an Online Business Lender?

Data security is always a top priority, both for sensitive business information and personal details. That’s why it’s always a good idea to make sure any software product, company or platform that uses sensitive information is reputable and trustworthy before sharing your data.

Just like personal loans, identity verification and a financial history review are crucial parts of the small business loan application process. Read on to learn more about how OnDeck provides a safe lending experience, as well as other common application questions.

What Documents Do I Need to Apply for a Small Business Loan?

Whether you apply for an online small business loan or seek funding through a bank, small business lenders need to verify an applicant’s information and financial history. In addition to basic personal information of all owners, the following documents are helpful to have when applying for a small business loan:

  • Business financial statements, ideally dating back the last 3 years where possible. These should include reports such as a profit and loss, expense and income.
  • Ownership and/or affiliation agreements, where applicable
  • Business and personal income tax returns of all owners for at least the past year
  • Business certificates, licenses and permits
  • Business leases for rental spaces and/or equipment

Why Do Business Lenders Ask for an Owner’s Personal Financial Information?

Small business lenders may need to verify personal financial information of all owners, depending on factors such as the organizational structure, number of years in operation, financial history and income. This helps business creditors make more responsible lending decisions. Additionally, business creditors may ask for a business owner’s personal information because the business loan may require the business owner(s) act as personal guarantors.

Is It Safe to Share Sensitive Information With an Online Business Lender

Small business lenders, banks and other financial institutions have a big responsibility to secure and protect sensitive data. Trustworthy online business lenders use leading technology to provide a safe and secure lending experience. Additionally, reputable financial institutions take measures to protect sensitive data through website security and encryption.

Why is the Business Loan Application Process Faster With Online Lenders?

Some small business funding options have lengthier applications and processing periods, like SBA and bank business loans. On the other hand, online lenders like OnDeck strive to provide fast and convenient access to small business loans using the latest financial technology. In addition to a quick application process, OnDeck uses secure cloud technology for a faster review process.

What is a Financial API?

When you use certain types of financial technology, like peer-to-peer payment services, budgeting software and online small business loans, a specific type of technology is required for a seamless and secure connection to your business bank account. This technology is also called an application program interface, or an API. One of the leading names in secure API software is Finicity. OnDeck uses Finicity to provide a safe, encrypted and seamless connection to your business bank account.

Источник: https://www.ondeck.com/resources/is-my-data-safe-with-online-business-lender

Fintech M&A deals- Mastercard’s acquisition of Finicity

With many M&A transactions coming to a standstill in March, different sectors’ M&A activity resumed at different times throughout the year. One sector that has largely benefited from the ongoing pandemic outbreak is financial technology (fintech), which is coincidentally the UK’s best-funded tech-based sector. Fintech companies integrate technologies to automate and digitalise many traditional financial services and products. Services can range from automated financial advice or trading, to processing online payments. Some fintech sub-sectors have benefited more than others from the ongoing pandemic due to the resulting acceleration of digitalisation. One sub-sector that has benefitted from the trend of digitalisation and the movement towards a more cashless society is the digital payments space. Digital payments volume has increased almost 25% this year, stimulated by the reliance of online shopping and reluctance to handle cash during the pandemic. As a result of the resilient nature of the fintech sector and growing optimism surrounding fintech as a whole, M&A activity recovered relatively quickly for specific sub-sectors within fintech, such as the payments space. For instance, KPMG revealed that UK payment M&A deal volume in 2020Q1 exceeded the total number of deals in the whole of 2019. 

There has been a trend of consolidation in the fintech industry in recent years. Many of the large traditional financial services firms, such as Visa, Mastercard and American Express, have engaged in a large number of acquisitions of start-up companies in recent years. The aforementioned acceleration of digitalisation has accelerated the rate of acquisitions, and the larger firms are seeking access to the innovative and profitable services of the newest fintech companies. Given the heavily regulation that the financial services industry is scrutinised with, it has become harder for established firms to innovate and develop new arms for their own businesses. Hence, opportunities arise for start-up companies to develop their own innovative products and services, that the more prominent players would find it difficult to develop themselves due to the regulation. This leaves the larger companies behind in terms of new product or service offerings, and M&A deals are the easiest way to catch up. Strategic acquisitions enable acquirers to not necessarily need to innovate themselves, but instead acquire other businesses to widen their ecosystems and possess more products and services to offer consumers, and also eliminate competition. 

In June 2020, Mastercard announced that it would acquire Finicity for 825 million USD at close, but with a possible 160 million USD in extra consideration based on performance targets. The strategic rationale behind the deal makes sense long-term, but this deal was estimated to have been priced at over 50 times Finicity’s annual revenue, possibly accounting for the vast synergies to be realised upon integration. Based on a revenue multiple of 50x, this would yield an annual revenue figure for Finicity of around 19.7 million USD, which is a tiny percentage of Mastercard’s mammoth 2019 revenue figure of 16.88 billion USD. Hence, it is clear that the rationale behind this deal was driven from the long-term synergies, rather than current fundamentals. Extremely high valuation multiples have developed in public tech markets, and has also partially been realised in private markets as investors want a piece of the resilient, long-term prospects of the innovative companies that make up this market. It not uncommon to see such high valuation multiples in fintech M&A deals, as there is always competition for acquisitions in this market from the traditional players, which results in a bid-up price. 

Finicity is an open banking company that uses its application programming interface (API) to enable third-parties to connect to financial institutions and access a consumer’s banking, transaction history, and other financial data in real-time. Open banking was an initiative aimed to centralise the consumer throughout the banking process by permitting access to their data to provide a better financial package via a more informative and transparent process. Traditionally, consumers searching for financial services or products were often restricted for choice, as the large firms dominated the market, thereby limiting visibility of products from smaller firms. However, with the implementation of the open banking initiative, consumers could compare different packages of products or services, which are tailored and best suited to their usages and needs. The tailored packages are determined via the aggregation and analyses of data collected over different points of the consumer network. Finicity collects data by facilitating access to secure, consumer data on a data-sharing ecosystem between fintech companies and consumers. It then handles and analyses the data gathered throughout these processes and transactions. Finicity’s customers include Experian, Bank of America and Rocket Mortgage, and has offices in Utah and Mumbai with around 445 employees. It is also known to operate using a very bank-friendly model which help banks make better-informed decisions on matters such as credit lending, account verification or account-based payment initiation. As stated by Mastercard’s president “they’re [open banking services] helping banks in terms of doing better credit decisioning, they’re helping bank’s customers make sure they can apply for a mortgage or a loan in a much more easy fashion.” Hence, the addition of Finicity’s strong API would enable Mastercard to improve their services’ efficiency to sustain long-term competitiveness.

Strategically, the rationale regarding the acquisition makes sense. The acquisition of Finicity will aid Mastercard in strengthening their global open banking platform. Mastercard has organically grown its own open banking service in Europe (a much more regulated marketplace). However, this acquisition will accelerate Mastercard’s global expansion of its open banking platform by inorganically growing its own open banking platform in other key geographies and advance its position as a strong open banking partner for fintech companies and financial institutions. Mastercard aims to leverage Finicity’s existing relationships and become a “one-stop partner” for North America’s banking, lending and wealth management ecosystems. The implementation of Finicity’s API will enhance user experience and offer consumers and small businesses better and more tailored services provided by Mastercard from streamlining the decision-making process. This could ensue revenue synergies as the enhanced service may attract future customers to Finicity’s advanced and efficient API, combined with the trustworthy utility that comes with the Mastercard brand. The expansion of Mastercard’s current open banking platform in this way would enhance their positioning in this market, as the use of data is growing, and more firms are beginning to utilise consumer data in this way. Earlier this year, Visa acquired Plaid, a fintech company that connects fintech applications to consumer bank accounts, whilst aggregating data in the process. So, it is clear that large financial institutions see the future being more a consumer-centric process, with data aggregation and analysis as one way to achieve this. Furthermore, acquiring data-collecting fintech companies provide the opportunity to sell the data to partnering banks and institutions – providing further value to a proposed acquisition. 

Overall, it is likely that the trend of consolidation in this industry will continue, especially given the low interest rate environment combined with the rapid pace of new start-up companies that are emerging. Cheap financing is relatively easy to access, particularly for the larger cash-rich firms such as Visa, Mastercard and American Express. Hence, this generates a fruitful setting for rife M&A activity in this sector, given that the future leans towards a sustainably fast rate of digitalisation, with many economists calling this the fourth industrial revolution. Larger firms will continue to want access to the new products and services which are being developed and it is no coincidence that the fintech sector is the UK’s most funded tech sector considering the optimism surrounding how these new services will revolutionise the financial services industry. Young fintech companies are typically able to implement a more consumer-centric service, which seems to be what is achieving more success in this era from a change in consumer expectations for newer generations. These are primary reasons why the valuations of these companies have been bid up so much: the fintech sector contains over 12% of recognised unicorns (start-up companies with valuations of $1B+), which have resulted from extensive M&A interest. Larger companies can implement fintech services to large addressable markets that it either is already operating in or looking to expand into. In the case of Finicity, the enhanced service offered by the merged company will streamline and make processes and services more efficient for Mastercard and the consumer, and thus, provide a more consumer-centric and profitable service.

Источник: https://www.thecorporatelawjournal.com/finance/fintech-mampa-deals-mastercards-acquisition-of-finicity

The FICO-free credit card brings increased diversity to the consumer credit industry with a focus on cash flow, not on credit scores for customers

SAN FRANCISCO, September 15, 2021--(BUSINESS WIRE)--TomoCredit, a fintech company offering a credit card focused on building a credit history for first-time borrowers, today announced a $10 million Series A funding round led by Kapor Capital and KB Investment Inc. (KBIC), a subsidiary of South Korea’s leading consumer bank. This comes on the heels of TomoCredit raising $7 million in seed funding, which brings the total funding to $17 million this year. The company also appointed Ash Gupta, former CRO at American Express, to the board.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210915005141/en/

(Photo: Business Wire)

According to the company’s analysis of Consumer Financial Protection Bureau statistics, 76% of GenZ and Millennials have not previously built up a credit history. Ultimately this means they cannot obtain loans from traditional financial institutions, which require at least a credit score with some history to get started. Such lending policies prevent 40 million people from accessing credit, including cars and homes.

TomoCredit aims to bring millions of individuals that lack a credit score into the financial system, allowing a diverse group of consumers the opportunity to better position themselves as qualified candidates for mortgages, auto loans, or other major life purchases. Powered by Finicity – a Mastercard company –and leveraging their secure data network and open banking technology, applicants permit TomoCredit to securely access their bank accounts to access financial data for underwriting purposes. Once approved, applicants receive the TomoCredit Mastercard, a no-fee credit card with 0% APR. The company has already pre-approved more than 300,000 customers and expects to issue a total of 500,000 cards by year’s end.

"TomoCredit is a glowing example of financial services innovation that meaningfully benefits individuals and families," said Steve Smith, chairman, CEO and co-founder of Finicity. "The team at TomoCredit understands the value of open banking, the wide range of data and how it can deliver richer insights and better decisioning to drive inclusion for those who are underserved by traditional borrowing processes. We expect big things from the team."

"As a South Korean immigrant, I understood the true pain point when I came to the US and couldn’t get qualified for an auto loan. I knew there must be a solution so with my co-founder Dmitry, we built TomoCredit centered around helping consumers build credit faster," said Kristy Kim, co-founder of TomoCredit. "We believe we have the opportunity to not only foster a diverse and inclusive team but to break socioeconomic barriers and provide credit solutions to a much wider audience impacted by this issue. Currently we have a 50% female representation in our executive leadership team and we are proud of our inclusive culture here at Tomo," said Kristy.

With this latest funding round, TomoCredit will hire additional staff and enhance key features like weekly AutoPay and High Credit Limits to boost credit scores faster. Through a no credit-pull method with no fees, the company can provide credit to everyone, especially to the ones neglected by major lenders due to their lack of FICO scores. TomoCredit’s Advisory Board includes current and past executives from LendingClub, Mastercard, Chime, SoFi and Venmo.

"At Kapor Capital, we believe in the power of transformative ideas and diverse teams. TomoCredit is just that," said Brian Dixon, Partner at Kapor Capital, ''TomoCredit gives fair opportunity to everyone that is looking to start building credit and it is much needed for underrepresented communities. TomoCredit founders understand the pain points in the credit system from their own struggles as immigrants."

Also joining this round is Lewis & Clark Ventures. "We are enthusiastic about the potential for TomoCredit to make a real impact in our nation by offering opportunities for inclusion for immigrants, foreign students, and those just beginning their careers with something as basic as their access to credit," said Tom Hillman, Founding General Partner, Lewis & Clark Ventures.

ABOUT TOMOCREDIT

TomoCredit is a next-generation credit card, catering to students, working professionals, and immigrants looking to build a better financial future in the U.S. TomoCredit is backed by KB Investment, Kapor Capital, Barclays Ventures, Lewis & Clark Ventures, Ame Cloud, Knollwood Investment Advisory, Bronze, Bam Ventures, Strong Ventures and more. The founding team members are based in San Francisco. More information is available at: www.tomocredit.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210915005141/en/

Contacts

Aaron Berger
917.355.8959
[email protected]

Источник: https://www.yahoo.com/now/tomocredit-raises-10-million-series-120500994.html

$42M Funding For Finicity

“This will improve existing processes and lead to better financial decisions for individuals and the institutions that serve them.”

It seems like just yesterday I was writing about Finicity, and now they’ve gone and secured $42M in new funding. Companies grow up so fast.

Finicity is a leading provider of real-time financial data aggregation and insights with more than a decade of experience. Its aggregation platform delivers transaction and account data, account history, account verification and account statement data. This information allows a wide variety of financial institutions and fintech partners to create services and solutions for their customers around personal financial management, wealth management, online banking, lending, expense reporting, digital payments and more.

Experian led Finicity’s Series B Round, and Bridge Bank provided a venture debt facility. ““With the multitude of disparate data sources in the financial industry, businesses are struggling to provide consumers with access to financial data through any application of their choosing. Bridge Bank is pleased to support Finicity in accelerating their business and further development of solutions that enable financial institutions and developers to deliver on the promise of data democratization,” says Kelly Cook, SVP, Bridge Bank Technology Banking. Existing investors also contributed to the $42M.

Finicity plans to use the investment to accelerate new solution development by expanding its engineering and support teams. Expanding on its financial management and payment initiation tools, Finicity will offer a variety of solutions for the credit decision market. These solutions will streamline the loan process, and improve accuracy while reducing risk and enabling a better customer experience. “The emergence of the open financial web, and our ability to access and analyze account data, is enabling new thinking in financial services,” says Steve Smith, co-founder and CEO of Finicity. “This will improve existing processes and lead to better financial decisions for individuals and the institutions that serve them. We are grateful to Experian, Bridge Bank and our existing investors for believing in our vision and working with us to transform our market.”

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Источник: https://newsroom.siliconslopes.com/news/42m-funding-for-finicity/

Mastercard’s Finicity signs data access agreement with Green Dot

By Pavithra R

Mastercard’s Finicity signs data access agreement with Green DotFinicity, a Mastercard company and leading provider of open banking solutions, has announced signing a data access agreement withGreen Dot Corporation, a digital bank and fintech focused on delivering trusted, best-in-class banking and payment solutions that seamlessly connect people to their money.

The integration enables the digital bank’s customers to securely connect to approved third-party apps and accounts.

“We’re excited to announce Green Dot as the next in our data access agreements lineup. The company is a big proponent of client empowerment, giving their banking clients the control to utilize their financial data to benefit them. This aligns well with Finicity’s mission to bring greater transparency to consumers to improve financial health and inclusion,” said Steve Smith, CEO of Finicity.

Through this agreement, Finicity is extending its leadership in direct data access through the use of an application programming interface (API). Finicity’s signed data access agreements with many of the nation’s largest financial institutions, credit card companies, and wealth management institutions and currently covers 63% of their open banking platform traffic with direct API access.

“This integration enables customers to put their financial data to work for them by offering secure, seamless connections to tools and features that can have a meaningful impact. The majority of Americans, and particularly low- to moderate-income consumers, can benefit from tools that help them feel more in control and connected to their money, and our partnership with Finicity is an exciting step in that direction,” said Abhijit Chaudhary, SVP and GM, Direct to Consumer Products, Green Dot.

Established since 2000, Finicity helps individuals, families, and organizations make smarter financial decisions through its safe and secure access to fast, high-quality data. It works with many of the popular Personal Financial Management (PFM) tools, and many of the largest lenders and most innovative payment providers, among other services.

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