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AFG acquires 7.6% stake in Volt

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Australian Financial Group has acquired a 7.6% stake in neobank Volt for $15 million.

As part of the deal, the Australian mortgage aggegator will offer a Volt-funded digital mortgage product to its network of more than 2,975 brokers.

AFG will also tap into Volt’s credit decisioning technology and offer the company’s personal financial management (PFM) app as an own-branded product to home loan customers.

The firms say they also intend to work together to develop and distribute further Volt white label products to AFG brokers, including personal and business loans.

The white label Volt-funded digital mortgage product and AFG branded PFM app are expected to be piloted in the last quarter of the 2021 calendar year and be made available to AFG brokers in the first quarter of 2022.

AFG CEO David Bailey says: “This alliance allows AFG Securities to harness Volt’s nimble banking solutions to deliver market leading innovation and faster decisioning to our brokers and customers.”

Of the PFM tool, he says: “The relationship a broker holds with their customer is fundamental to their success. The provision of the new PFM app technology will enhance that connection and ensure their customers’ interests are kept front and centre.”

The $15 million stake is a minor share in Volt’s current $85 million capital raising exercise.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.finextra.com/newsarticle/38211/afg-acquires-76-stake-in-volt?utm_medium=rssfinextra&utm_source=finextrafeed

Payments

The Underwriter’s Gambit Part 3: Third Party Data In Auto Insurance

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In previous parts of this series, increased usage of algorithmic underwriting in complex risks and prevalence of integrated workbenches in life insurance were discussed, as ways in which traditional underwriting was modernizing. In this final part, the use of third party, alternative data in auto insurance underwriting is the focus.

A recent Deloitte study found, 90% respondents in insurance struggle to find value in data they access. Though its foundation is tightly linked to data, the insurance industry still relies predominantly on the same data points they used decades ago – claims histories, credit ratings, customer demographics and general business information – to underwrite risk. Hundreds of data sets are available to insurers, but only some show strong promise, such as IoT data, new forms of open source and social media data.  Among the most common applications of IoT are telematics that provide insurers an opportunity to leverage data generated by vehicles on the roads.

According to IHS Markit, approximately 70% of new light vehicles produced in 2023 will be equipped with some form of telematics systems, with connected devices providing information on driver behavior, such as harsh braking or rapid acceleration. According to IoT analyst firm Berg Insight, the number of insurance telematics policies in force in Europe grew at a CAGR of 28.2 percent, while in North America, the CAGR was 29.6 percent.

To unlock meaningful insights, insurers combine this data with internal data, which is often in siloes. Auto insurance has already benefited over the past few years from availability of real-time motor vehicle reports, CLUE reports and credit scores. Individually, these data elements might provide limited insight into a driver’s risk profile, but together they lay the foundation for a data-driven future. By consuming emerging sources of data, personal auto insurance has arguably been able to outperform other insurance lines by bolstering key customer interaction points.

We now see players like Verisk, a leading data analytics provider, delivering telematics data from its Data Exchange, enabling auto insurers to provide usage-based insurance (UBI) to connected car drivers. It uses traditional and advanced underwriting attributes from LightSpeed Auto to help insurers streamline the UBI buying experience without upfront driving observation period, by calculating discounts at point of quote.

Verisk returns prefilled data on drivers, vehicles, coverages, licensing, violations and losses from LightSpeed Auto while scoring raw data for thoroughness and fraud. Carriers access driving behavior data from the Verisk Data Exchange, which contains normalized driving behavior attributes from consenting drivers of over 7 million connected vehicles.

Some are still skeptical of the ROI of auto telematics. Are costs to collate and digest the data justifiable against value received? What benefits accrue from underwriting decisions based on telematics versus traditional proxy data? Ongoing and future research will keep illuminating this discussion, though strides made by usage-based pioneers, make this a foregone conclusion. As Musk claims, “Ultimately, (we want) to be able to use the data that’s captured in the car … to be able to assess correlations and probabilities of crash and .. assess a premium on a monthly basis.”

The nature of risk keeps changing. Underwriters have been adapting well to evolving risks. The lines are overlapping between personal and commercial auto insurance, as are boundaries between workers’ compensation and homeowners’ coverage, with millions working from home. Insurers are gearing up to provide comprehensive solutions beyond risk transfer. Amid these tectonic shifts, forward-thinking underwriters are staying ahead of the curve to ensure they are not rendered obsolete. They are thriving in an environment that challenges them to move from hindsight, with post-facto underwriting decisions, to foresight, with active portfolio monitoring. As the future unfolds, historical data will be relentlessly subsumed with new, alternative data to underwrite evolving risks.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://dailyfintech.com/2021/06/17/the-underwriters-gambit-part-3-third-party-data-in-auto-insurance/

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Crowdfunding

Mexico based Digital Payments and Commerce Fintech Clip Secures $250M from SoftBank Latin America Fund, Others

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Mexico-based Clip, a digital payments and commerce Fintech, revealed on Tuesday (June 15, 2021) that it has acquired $250 million in capital via a round led by the SoftBank Latin America Fund and Viking Global Investors LP.

Clip‘s latest investment round is the largest ever for a payments firm in Mexico. The company has become the first payments Unicorn in the world’s 12th biggest economy. Clip is valued at around $2 billion.

The Fintech firm says it pioneered simple and convenient access to virtual payments and the democratization of financial services in Mexico. The company claims it’s super focused on providing the best customer experiences and service.

Clip says it empowers businesses to easily access various financial and commerce-enabling services via its proprietary tech platform, diverse ecosystem of distribution partners, and a convenient engagement model that’s accessible to all users looking to participate in the digital economy.

Adolfo Babatz, CEO and Founder of Clip, stated:

“We are very proud to partner with two world-class investors such as SoftBank and Viking and achieve such an important milestone for a Mexican company. Looking ahead, the resources will enable us to continue to grow aggressively and continue building Mexico’s operating platform for commerce, fulfilling our vision to have Clip in every business in Mexico.”

Marcelo Claure, CEO at SoftBank Group International and COO of SoftBank Group Corp., remarked:

“Clip is the exact type of disruptive company SoftBank looks to invest in. Led by an amazing management team, Clip is using technology and AI to disrupt the financial services industry by providing essential digital solutions to merchants and small business owners in Mexico, an economy that stands to benefit greatly from digital payments. We are proud to have Clip in the SoftBank ecosystem.”

Clip’s list of investors reportedly includes General Atlantic, Ribbit Capital, Goldman Sachs, Dalus Capital, Banorte, Amex Ventures, among several others.

The firm launched operations back in 2012 with only five workers. But it has grown to around 600 employees across Mexico, the US and Argentina.

Shu Nyatta, Managing Partner of SoftBank Latin America Fund, added:

“Clip was the SoftBank Latin America Fund’s first investment, and we have been growing together in the region since then. We remain aligned on our optimism about the potential of technology and entrepreneurship, and equally excited for the opportunity to deepen our partnership.”

The transaction is currently awaiting customary approvals

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176618-mexico-based-digital-payments-and-commerce-fintech-clip-secures-250m-from-softbank-latin-america-fund-others/

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Payments

Bitcoin fans had a dream about Institutional money that turned out to be a nightmare

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Many Bitcoin fans dreamt that Legacy Finance Institutions would lead the way to mainstream adoption of Bitcoin.

This dream was the narrative that drove the last Bitcoin bull market. Now that we maybe in a Bitcoin bear market, that dream has turned out to be a nightmare.

Daily Fintech subscribers were told HOW this crypto-in a-suit bull market would end. If I could have told you precisely WHEN it would end Daily Fintech would be charging subscribers $143 per second not per day. In hindsight it is obvious that the day Coinbase went public and joined the Fintech 50 Index would mark the end of the bull market (to kaching sounds as Institutions sold COIN and BTC to retail investors).

I think there will be another Bitcoin bull market – I am a long term bull. I do NOT know when it will start. I do know that the narrative of the next Bitcoin bull market will be opposite of the previous bull market:

Bull market 1 in 2013. Cypherpunks, Anarchists & Libertarians (more interested in “sticking it to the man”than making money) created the early traction that got Bitcoin from an obscure message board to the possibility of game-changing innovation. The dramatic price rises brought in Retail Speculators hoping for a quick buck to recover from the 2008 depression)

Bull market 2 in 2017. Retail Speculators. Sticking  it to the man was not high on the agenda. This brought in new capital and excited the Legacy Finance Institutions who drove the next bull market.

Bull market 3 in late 2020/early 2021. Institutions & Governments aka “the man”. This was when the Cyperpunks, Anarchists & Libertarians were thrown into the dustbin of history and the speculators are told to grow up and trust in the products sold by Legacy Finance.

The crypto-in a-suit bull market ended because Legacy Finance Institutions exist at the pleasure of Governments, so when regulators take action against Bitcoin the Institutions are vulnerable to pressure. A few whales could trigger a bear market, knowing that Governments acting would deepen the price decline.

The narrative of the next bull market will be the opposite of the recently ended crypto-in a-suit bull market. The Cypherpunks, Anarchists & Libertarians from 2013 will cheer from the sidelines but the Bull Market 4 narrative will be “First the Rest then the West” about billions of people interested in Bitcoin to help them “put food on the table”.

Daily Fintech articulated this “First the Rest then the West” Path To Mainstream Adoption 2 years ago. We are seeing signs of this in countries such as Venezuela and El Salvador.

This use case, with billions of people in countries with failing Fiat currencies, will build Bitcoin’s second leg – a currency for everyday spending.

These billions of users at the Bottom of the Pyramid constitutes an unserved market excluded from the modern consumer economy of  about $5 trillion in Purchasing Power Parity terms.

The advent of fast, low cost micropayments via offchain technology such Lightning Network also make it much easier to profitably serve the Bottom of the Pyramid. Credit Cards obviously don’t work in that market and physical cash has hidden costs (theft, time, handling etc).

Nightmares (and bear markets) do end. This too shall pass.

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://dailyfintech.com/2021/06/16/bitcoin-fans-had-a-dream-about-institutional-money-that-turned-out-to-be-a-nightmare/

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Crowdfunding

Paris based Fintech Upflow, which Addresses Late Payments, Secures $15M from 9yards Capital, Others

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Paris-based Upflow, a startup that assists B2B firms with getting paid, has secured $15 million in capital via a Series A round which included contributions from 9yards Capital, eFounders, and angels N26 co-founder Maximilian Tayenthal and Uber exec Pierre-Dimitri Gore-Coty.

Companies or businesses usually try using a combination of manual processes and outdated payment methods to get paid, which often leads to delayed payments.

Upflow says it will address this issue with its SaaS platform that allows companies to take control of their cash flow cycles. The company notes that it plans to help get rid of the late payments problem.

Upflow’s technology integrates with various finance tools like QuickBooks, Xero, Netsuite, and Chargebee. Upflow has also teamed up with major payment gateways such as Stripe and GoCardless, in order to offer business teams with a central hub so they can effectively manage communication with their clients while settling payments.

Currently handling over $200 million in invoices every month, for 1.5 million+ transacting firms, Upflow intends to use the funds raised to support ongoing product development, while establishing a business office in New York. The office should help with enhancing distribution in the US markets, and also with expanding the company’s team in the coming year.

Alexandre Louisy, CEO at Upflow, stated:

“We are on a mission to revolutionize the way that companies get paid. At Upflow, we provide a solution that adds connectivity and clarity to a company’s payment and invoicing stack. Where systems were previously closed and disconnected, Upflow’s platform enables smooth and clear processes.”

Louisy added:

“By enabling a company to take control of its entire cash cycle, we want to help eradicate late payments. There is a common misconception that ‘late payments’ are only a symptom of big companies holding smaller vendors to long payment cycles. Upflow sees it differently: late payments are a tech problem, as B2B payments haven’t changed for decades.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176630-paris-based-fintech-upflow-which-addresses-late-payments-secures-15m-from-9yards-capital-others/

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