Following in the footsteps of Brexit, the payments apocalypse has been delayed.
The Financial Conduct Authority (FCA) announced on Tuesday that it would delay the enforcement of Strong Customer Authentication (SCA) for 18 months.
The FCA had taken its lead from the European Banking Authority (EBA), who in late June had said it would let national regulators “provide limited additional time” on a local basis. Earlier that month, the EBA had rejected call for a continent wide grace-period.
Do you remember when Theresa May said she wouldn’t delay Brexit, and then she said she wouldn’t delay Brexit, and then she said she wouldn’t delay Brexit and then April rolled around and Brexit had been delayed?
It’s a well-trodden path, the delay. It’s becoming a cultural trope.
The EBA and the FCA had clearly been paying close attention to the political sphere in late 2018 and early 2019. Watching on, wide eyed and intrigued, as the delay as a concept was rubbished again and again and again. And then it wasn’t.
It wasn’t until 28th June that the FCA announced it would be delaying implementing SCA rules in the UK. It took until 13th August to officially endorse a contingency plan. This is eleventh hour stuff. You could almost hear to splat of perspiration on the floor, as merchants across the spectrum wiped the sweat from their brows.
Conversion rates are safe. For 18 months.
The FCA had tasked the trade group UK Finance with drawing up a transition plan. UK Finance proposed a delay of 18 months to the enforcement of multi-factor authentication, giving merchant and financial institutions time to become technically capable.
However, not all of UK Finance’s key recommendations were accepted by the FCA. The trade body had proposed giving more time for the travel and hospitality industries to update their complex legacy payment systems. The agreed upon 18 month grace period can be seen as a compromise struck.
Britain’s financial authority is not the first to come out in favour of a delay. Leading financial compliance bodies in France, Italy and Denmark have all publically endorsed the idea of a delay. France is the only other country that has outlined a timetable for the delay.
Many have welcomed the FCA’s announcement as necessary in the face of major technical upheaval. Patrick Collison, CEO of Stripe, described SCA as “almost certainly the largest migration that European online retailers have ever had to do.” Sounds biblical. An exodus of online retailers to a payment journey in keeping with the modern consumer. So that’s mobile friendly, and anti-sophisticated fraud.
The future is here. Well it will be in 18 months.
Dorothy is a startup that offers faster cash post-disaster
When disaster strikes, costs pile up quickly. Flood waters can wipe out the foundation of a home or building, just as much as wildfires can burn down the walls or the entire structure. For residents and business owners, rebuilding and rebuilding quickly is crucial: they ultimately need some place to live and offer services, and they often can’t afford to be shut out for extended periods of time.
Of course, the need for speed among consumers hits the brick wall that is the insurance industry and government’s timeline for dispersing post-disaster insurance claims and aid. It’s not uncommon for federal aid to take months or even years to arrive, and insurance companies can often take months as well to process claims, particularly after large disasters like hurricanes where thousands of claims arrive simultaneously.
Dorothy is a startup that is aiming to bridge the gap by offering, well, gap loans to users who already have existing private insurance or federal flood insurance policies. The idea is to extend cash as quickly as possible after qualification, and then Dorothy gets paid back when a claim is later processed. Much like other advance cash startups in other sectors, Dorothy takes a fee based on the size of the loan.
The company’s underwriting model assesses the likelihood that a claim will be approved given the details of a particular disaster and the user’s insurance policy.
Arianna Armelli and Claudio Angrigiani founded the company last year in the midst of the COVID-19 pandemic, naming it for the character from the Wizard of Oz who repeatedly said “there’s no place like home.” They met each other in graduate school at the University of Pennsylvania and explored different ways to solve the challenges of disaster finance.
Armelli, for her part, had experienced these challenges firsthand in the wake of Hurricane Sandy in 2012. She was an architect, and her office in Manhattan had to be evacuated. She returned a few days later, but over time, realized that many of her friends still couldn’t return to their homes even weeks after the hurricane had passed. She volunteered with recovery efforts, and I “went house to house in the Rockaways to remove drywall from their basements,” she said.
She continued her career, spending nearly six years as an architect and urban planner, and that training drove some of her early ideas about how to improve post-disaster recovery. “I thought the answer to these problems was designing better infrastructure and long-term sustainable solutions with planning,” she said. “After six years in planning, [I] realized these were 40-year projects.”
After meeting Angrigiani, the two explored ways to make the insurance system better for end users. They began by investigating how better flood data could help insurance companies underwrite better policies and process claims faster. They realized over time though that the insurance industry was quite sclerotic, and that a third-party provider of better flood predictive data wasn’t going to have a large impact on outcomes.
As COVID bared down on the world, they then explored business interruption insurance. Using their technology for disaster prediction, they saw an opportunity to offer “a financial supplementary product for businesses,” essentially a “credit line product that is offered to commercial business owners similar to a credit card,” Armelli said. That idea eventually morphed into the company’s current product offering targeting property owners, both businesses and individuals, with the same sort of gap loan to solve immediate cash-flow problems.
Dorothy participated in the latest cohort of Urban-X and closed a pre-seed round this past February. The company has raised a $250,000 debt facility to further test out its gap loan product, and it has 25 qualified customers in its pipeline. It’s early days, but an interesting new bet on how to make insurance actually useful when people face some of the toughest moments of their lives.
It’s just one of a new crop of startups that are building new offerings in a world increasingly filled with massive disasters.
Finary wants to create the wealth management dashboard for the next generation
Meet Finary, a new French startup that wants to change how you manage your savings, investments, mortgage, real estate assets and cryptocurrencies. The company lets you aggregate all your accounts across various banks and financial institutions so that you can track your wealth comprehensively over time.
After attending Y Combinator, the startup has just closed a $2.7 million (€2.2 million) seed round led by Speedinvest with Kima Ventures and angel investors, such as Raphaël Vullierme also participating.
If you know people who have a ton of money, chances are they tend to be at least 40 or 50 years old — you don’t become rich overnight after all. And they tend to manage their investment portfolio through a wealth management service with tailor-made services.
“There’s very little tech in wealth management. Advisors are also incentivized to sell you some financial products in particular,” co-founder and CEO Mounir Laggoune told me. In that situation, the company in charge of the financial product is generating revenue for the advisor — not the client.
At the same time, a new generation of investors is starting to accumulate a lot of wealth. And yet, they don’t have the right tools to allocate it properly. Younger people want to see information directly. They want a way to track information in real-time, or near real-time. And they want to be able to take some actions based on that data.
Finary wants to build that service based on those principles. It starts with an API-based aggregator. When you create a Finary account, you can connect it with all your other accounts — bank accounts, brokerage accounts, mortgage and real estate, gold, cryptocurrencies, etc.
The startup leverages various open banking APIs to be as exhaustive as possible. For instance, “you can connect a Robinhood account and a Crédit Mutuel de Bretagne account,” Laggoune said. Behind the scenes, Finary uses Plaid and Budget Insight, runs its own bitcoin and Ethereum nodes to track wallet addresses, estimates the value of your home through public data and a proprietary algorithm.
After that, you can see how much money you have, how it is divided between your investment pools, the current value of your gold and cryptocurrency assets and more.
“Our long-term vision is that we want to build a virtual wealth manager for Europe,” Laggoune said.
That’s why Finary recently launched its premium subscription called Finary+. With a premium account, you can see how much you’re paying in fees and track your performance — more features will get added over time.
A few months after launching its platform, Finary already tracks €2 billion in assets across thousands of users. With today’s funding round, the startup will roll out its service to more countries and more financial institutions in France, Europe and the U.S. The company is also working on mobile apps.
This is an interesting take on wealth management as Finary doesn’t try to reinvent the wheel. Legacy players want you to use a single bank for all your financial needs. But you end up paying a lot of fees and you have to use old and clunky interfaces.
Finary isn’t yet another wealth management service. It’s a holistic service that lets you use multiple banks and services while remaining on top of your assets.
Irish Fintech Payslip Announces Closing of Additional $10 Million to Series A Financing Round; Brings Total Funds Raised to $14.5 Million
Payslip, an Ireland-based global payroll management software and fintech company, announced on Tuesday it closed an additional $10 million to its Series A financing round, which brought the total funds raised to $14.5 million. MiddleGame Ventures reported led the round and Mouro Capital serving as co-lead, with additional participation from Frontline Ventures, Tribal.vc, investors David Clarke, former CTO of Workday; Brian Williams– Co-Founder of One Source Virtual; and Phil Chambers, CEO, and Co-Founder of Peakon.
As previously reported, Payslip stated it delivers innovative global payroll management software to multi-national enterprise clients. The company also enables multi-national Global Payroll Teams to manage all data and workflows, internally across functions and externally with payroll providers, on a centralized cloud platform, delivering increased GDPR data protection, consolidated reporting, transparent process and people performance management. Fidelma McGuirk, CEO of Payslip, spoke about the company’s products by stating:
“Covid travel restrictions, in-country business continuity requirements, and increased WFH acceptability have turbocharged international hiring and country expansion. Payslip customers use our technology to grow quickly into new countries, deliver a unified employee self-serve experience globally and, most importantly, to have real-time insights via the reporting available on Payslip around payroll costs, operational delivery and vendor performance.”
Payslip further revealed that the extension round follows a record year of growth for the company since its last financing in March 2020, which saw a nearly 100% increase in employee headcount, 40% revenue growth, and 25% quarterly customer growth. The company then reported it plans to use the additional funding to expand its product roadmap to include enhanced payroll, benefits and employee payroll personalization, greater zero-touch automation and validation, and “last-mile” global payments & benefits integration.
The company added that the investment plans will ensure its platform and integration technology are fully optimized to lead the “next generation of innovation” in the global payroll space.
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Spica Technologies awarded Innovate UK Grant to develop plug & play workplace app
Workplace experience software provider Spica were awarded the grant in November 2020 and will see the project through to completion in October this year. The grant was awarded by the UK Research & Innovation (UKRI) organisation. Spica’s application was one of those selected from thousands of applications to make advancements in their fields.
The case for funding cited industry experts and statistics on the gap between the importance of employee experience and the lack of digital tools being implemented to help improve this.
• 88% of business leaders rate the employee’s experience of their workplace as either important or very important, but only 22% report that they are using Digital tools to create differentiated employee experiences.
• “Employees look at everything that happens at work as an integrated experience that impacts life in and out of the workplace. They expect a better-designed experience where every element of their employee experience can be accessible and easy to use on their mobile device.”
Spica’s original workplace experience app, Luna, was initially launched in 2019, with a strong focus on a bespoke and customised nature, working closely with their customers on design and development activities for new modules. Global clients have praised the firm for this approach with Clament Lijoy, Global Real Estate Technology & Innovation at EY stating “The digital workplace transformation journey with Spica through the last 3 years have been extraordinary. The team was able to rise to the challenge and provide industry leading smart building capabilities tailored to the unique requirements that we had.”
However Spica realised they could take their wealth of experience in delivering employee experience apps out to a wider market, providing an “off-the-shelf” version of Luna with established best practices, standardised modules and customisation controls built in. The application cited “a need for solutions to this problem that are available to companies of all shapes and sizes”. This new approach reduces initial setup and maintenance costs and offers employee experience benefits to a wider audience.
This project will look to incorporate technologies like indoor positioning, IOT sensing, gamification, and machine learning to deliver an exceptional digital workplace experience. The proposed outcomes for users within the winning application were improved productivity and removing workplace frictions such as finding assets and resources, reporting workplace issues and accessing amenities. Ultimately culminating in enhancing employee wellbeing and sustainability goals of the built environment in which the business operates.
Project Manager and Spica Chief Technical Officer Paul Collins said “The support of Innovate UK (UKRI) has helped us significantly accelerate our research and product development plans in this area. With post COVID return to work at the top of the agenda, there is a surge in demand for digital tools like Luna to help businesses of all shapes and sizes provide a safe, healthy, productive, collaborative and enjoyable working environment.
A major focus of the project has been on reducing the time it takes to get tools like
these installed and up and running, as we recognise that businesses need help right now in preparing for people coming back into the workplace.”
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