#FinTech / The Tearsheet guide to fintech jargon for 2021

The world of financial technology is sounding like an increasingly niche space where jargon is becoming something of a currency.
Our updated termsheet will help you cut through the noise to understand what everything really means…

agile: fast
altcoin: a bitcoin alternative
accelerators: finishing school for startups
AI: “big data,” 2021 version
API: official permission to use someone else’s work
beta: we have no idea what we’re doing
big data: so 2012
biometrics: fingerprints
bitcoin: you’re still kidding
bitcoin mining: computers are competing to get new bitcoins
blockchain: a very secure Excel sheet
co-creation: customer creation
central ledger: a really important blockchain run by really important people
chatbot: do I sound human yet?
conversational banking: you’re talking to something
consensus: when everyone agrees this is a thing
consumers: people
contactless: tapping a card instead of swiping it
conversational AI: If ‘you ask’, then you’ll get ‘a worthless answer’
corporate VCs: attention startups: take our money, let us buy you later
cross selling: selling bank stuff customers don’t need
cryptocurrency: digital currency for anarchists
chief culture officer: chief ping-pong table installer
data aggregation: still screen scraping your information
decentralized autonomous organization:humans aren’t involved
DeFi: Losing business models taking on Visa and PayPal
democratize: lowering the barriers to entry, to get more customers
DLT: blockchain tech built with banker specs
embedded finance: integrating someone else’s financial product
enterprise: for businesses, not for lowly humans
future proofing: making sure your product isn’t a passing fad
digital ambassadors: bank tellers
digital identity: the real you
digital tokens: a way to raise money
digital transformation: innovation theater
digital wallet: your wallet on a phone, sans cash and ID
Jamie Dimon: he hates bitcoin but loves blockchain
disruptors: startups with big egos
ecosystem:we want everything you do to loop back to our family of products
ethereum: the new bitcoin
fail-fast-fail-often: fail
fintech: finance today
frictionless: easy
game changing: hoping you forgot the last time we did this
guests: people
high-tech-high-touch: we support both people and robots
ICO: kind of like an IPO, but using cryptocurrency
incubator: boarding school for disruptors
incumbents: grownup people
innovation lab: adult playground
innovative: (see: game changing)
insurtech:a bot will soon tell you your medical visit is not covered
KYC: customer intake form
LinkedIn: a noisy, expensive and ineffective place to get B2B leads
machine learning: the machine that knows how to react when you yell at it
native: you don’t need Safari or Chrome to use it
omnichannel: every channel
open banking: banks need to outsource creativity, via APIs
participants: real people
permissioned ledger: you need an invite to join this
PFM (personal finance management): balancing your checkbook
pivot: our first idea didn’t really pan out
post-app world: apps will die
proof-of-concept: we’re waiting for the money to make this a thing
proof of stake: you’ve got skin in the game
proof of work: you’re mining
remittance:money that costs money to send home overseas
relationship building: when banks want to stalk you
revolutionary: hyped
robo-advisers: you’ll end up talking to humans
Satoshi Nakamoto: we don’t know if he exists, but he apparently designed bitcoin
smart contract: you don’t need to argue with real people
scale: grow
solution: experiment
stablecoins: fiat currencies dressed up as cryptocurrencies
sprints: not your average never-ending large-scale tech overhaul
Square: maker of Cash App for hyperactive bitcoin traders
Stripe: payments infrastructure focused on getting into your business next
surprise and delight: it’s kind of new and customers probably won’t hate it
test-and-learn: playtime for focus-groups
throughput: when input and output aren’t long-enough words
ubiquitous: everywhere
unicorn: those special startups in the Three Comma Club
users: people who downloaded our app once
VC: mom and dad
Venmo: how you stalk your ex
XaaS (anything as a service): using the Internet


#FinancialInclusion / The Cambridge Centre for Alternative Finance Launches the Cambridge Alternative Finance Collaboration Network

The CCAF is the leading Fintech research organization in the world… a “network of regionally embedded resources and capabilities engaged in the creation and exchange of knowledge needed by policymakers, regulators & industry to navigate the digital transformation of the global financial system.”

[Director and Co-Founder of the CCAF:] “We are now entering a new chapter for the CAFCN, with plans to operationalise in three more regions. We will also be introducing digital tools, currently under development, that provide the necessary resources to feed a dynamic global network that enables tangible assistance to be delivered to underbanked, unbanked, financially excluded populations. These tools will be equally relevant to supporting the development of micro, small and medium-sized enterprises worldwide.”

The CAFCN’s mission is to facilitate cross-regional and sectoral knowledge to fulfill its goal of “informing decisions related to financial inclusion, economic growth, and poverty.”


#FinancialInclusion / The 21 year old entrepreneur building a community that builds credit

Growing up in a military family of nine, Michael Broughton spent most of his life in the vibrant communal cultures of Okinawa and Seoul. There he learned the importance of nurturing a family and community network even within the fast-paced realities of business. Upon his return to the U.S, Broughton observed a stark contrast to his previous existence… “It made me wonder if there was a way to build the concept of community inside of the business world…”

The 21 year old entrepreneur and self-professed anime nerd soon found the opportunity to establish a community by co-founding the credit building app Perch which offers young adults the chance to build their credit through rent payments or with subscriptions to Netflix, Hulu and Spotify among others… “We wanted to focus our product in a way that anyone can start building their credit no matter who they are, despite their social background, their ethnicity, or where they’re from…”

Last month Perch ended the year on a high note by closing its seed funding round of $2.5 million with investors from Marcy Venture Partners, Citi, Softbank Opportunity Fund, Concrete Rose and Village Capital.

… In the near future, Broughton hopes to buy his parents their own house, and to end up in Forbes’ 30 under 30. In the long run, he wants to continue to work towards attaining the financial stability of vulnerable communities.


#FinTech / SoFi going public via SPAC backed by Social Capital in $8.65 billion deal

In one of the most eagerly anticipated fintech deals of 2021, online lender SoFi plans to go public through a merger with a special purpose acquisition company (SPAC) backed by billionaire VC investor Chamath Palihapitiya. The deal, announced Thursday, would value San Francisco-based SoFi at $8.65 billion.

Palihapitiya told CNBC that SoFi is an attractive bet based on its mobile-first approach and its low-cost delivery of financial services. He likened SoFi’s disruption in the fintech space to Amazon’s impact on the retail sector…

SoFi started in 2011 with an initial focus on student loan refinancing for millennials. It now offers stock and cryptocurrency trading, personal and mortgage loans, and wealth management services.

SoFi’s CEO is Anthony Noto, former chief operating officer of Twitter and former managing director of Goldman Sachs. He said “deal certainty” was among the reasons SoFi chose to go public through a SPAC, instead of a traditional IPO.


#FinancialInclusion / Fintechs helping immigrants navigate a new financial world

Several fintechs are focusing on working with or helping immigrant communities to improve their credit score, build a credit history and find other people who share the same cultural experience while providing financial tools and resources that empower them.

Kristy Kim founded TomoCredit because she was personally frustrated in her 20s when she attempted to get approved for an auto loan. She was rejected five times because as an immigrant she did not have a credit history… Kim realized there was an opportunity to help other immigrants avoid the same hassle and pain of not having a credit score… Not having a credit history in the U.S. means that companies like Equifax, TransUnion and Experian can not provide a financial score for an individual, leaving them unable to finance a car loan, obtain auto insurance or lease an apartment… Rather than relying on credit scores to assess applicants, TomoCredit looks at a person’s banking history and sources of income to determine eligibility…

Besides immigrants, expatriates are not able to obtain credit because they do not have credit scores when they first move to the U.S. Matt Holden, founder and CEO of Denver-based Black Opal, developed a credit card to address the gap.

“Black Opal is my fourth startup and I really wanted to solve the problem of expats and professionals moving to America and the shock that all of us face which is – you can’t get credit” … Black Opal aims to address this market segment – each year 14 million people arrive in the U.S. … The credit card will be one way for expats to access credit faster and easier since Black Opal will use a person’s home country credit file… “One of the great things about Black Opal is we’re a company built by expats for expats,” Holden said. “We know the pain and want to be that pivotal partner for our customers.”

Another startup working with immigrants is Homeis, a digital platform for immigrant communities around the world that was founded in Tel Aviv and New York … Homeis now has 1 million registered members and offers financial services by partnering with fintech companies, neobanks and financial institutions in the remittance industry to give immigrants a “platform that will solve all of their needs in one place,” said Ran Harnevo, CEO of Homeis. These financial services are being shown in their own language.

“In the last few months we’ve added more and more financial services to Homeis, partnering with the best startups in the space,” he said. “We believe that the fragmentation in the space is a problem to both our users and the service providers.”


#BNPL / Uplift Receives New Credit Line As It Looks To Expand

Menlo Park, California-based Uplift is a buy now, pay later platform for travel that now has raised a total of about $695 million in equity and debt since being founded in 2014.

“Travel already is springing back,” said CEO Brian Barth, adding the company chose a credit line because it is capital efficient and equity funding would have been more expensive. “People are looking toward summer and fall and booking travel.”

… Barth said the company plans to possibly move beyond travel… The company has received requests from merchants in other verticals to integrate their payment platform with their e-commerce infrastructure… “We’ve had a lot of inbound interest from merchants when it comes to that.”

… Uplift also could look at the public markets, Barth said. The growth of the buy now, pay later option in the U.S., as well as the different methods to go public, such as a direct listing or SPAC, make such an exit possible… “We’ll definitely have the number to be public.”


#DigitalBanking / Green Dot launches GO2bank to compete with challenger banks

Green Dot … unveiled GO2bank, the prepaid card issuer’s challenger bank aimed at serving the low-and moderate-income (LMI) market.

The digital bank, which the company has been building since early last year, offers overdraft protection up to $200, early paycheck access, a high-interest savings account and access to a secured credit card, available with no credit check or annual fee.

Green Dot CEO Dan Henry said … "GO2bank is built to be the go-to destination for seamless, affordable, useful banking — combining the security, stability, and experience of an FDIC-insured bank with the innovation and agility of a leading fintech."

[Green Dot’s senior vice president:] "This is a real bank. I see a lot of competitors — new neobanks that are essentially marketing firms because they don’t have their own infrastructure … No. 1, they are nonbank holding, and No. 2, they don’t have their own tech stack. So, it would be unfair to compare against any of those guys."

Another differentiator that sets the Pasadena, California-based company apart from many challenger banks is its physical footprint…


#BankTech #SaaS / Mambu Raises €110 Million in Funding Round

Mambu’s SaaS banking platform sets it apart from traditional core banking players as it drastically accelerates and simplifies the way financial products are built and serviced by any financial institution.

[Founder and CEO of Mambu:] “When Mambu launched in 2011, we knew the future of banking would have to be built on agile and flexible technology. Nearly a decade later, this is more true now than ever, particularly given developments over the past year…”

[TCV General Partner, John Doran:] “Mambu was one of the first companies to leverage the opportunity to move banking software into the cloud. The team has built a highly composable, truly cloud-native product in a multi-billion dollar, rapidly-growing market traditionally dominated by large, slow-moving on-prem vendors. We have been following Mambu’s progress for many years and are truly delighted to be able to partner with Eugene and the entire Mambu team on their journey to expand their offerings to customers worldwide.”


#SME / PayPal investment lands SME fintech Divvy with unicorn status

The start-up announced a $165 million Series D funding round with participation from new investor PayPal Ventures… Divvy wants to combine credit, vendor, and spend management into a single platform

“We’re not just building for tech startups,” explains Blake Murray, Divvy’s CEO. The fintech claims to have driven up its sign-ups by 500% monthly since March 2020.

Divvy claims to cut down the time it takes small business managers to process their expense reports.

Its software is free, so Divvy makes its money from the fee merchants pay banks every time they use the start-up’s card.

More recently, Divvy has fleshed out offerings around paying bills.

Long-term, Divvy says its ambition is to modernise financial processes “by combining credit, vendor, and spend management into a single platform”.


#SME / Orange Bank acquires French neo bank Anytime

Orange Bank has acquired french neo bank Anytime, extending its app-based services to the freelance and SME market.

The acqusition gives the telco a foothold in the small business banking market, having launched three years ago as a pure-play consumer bank.

… Anytime has grown by offering business accounts, payments and expense management tools that make life easier for small businesses, including automated accounting and invoice management. The merger with Orange will provide the business with an opportunity to extends its offering into loans and insurance.