#InsurTech / Rhino raises $95m to support US renters

Rhino’s security deposit insurance acts as a “direct replacement” for a cash security deposit. Renters pay the firm monthly fees to insure their landlord’s property for damages and lost rent.

The firm claims it has tripled in size to more than 100 employees. It says its policies cover one million homes in the US, and saved renters $250 million in cash.

Ankur Jain, chairman at the firm, believes the rental insurance industry is set for “explosive growth”.


#FinTech #BankTech / What’s in store for financial services in 2021?

[Key takeaways from the article by Fintech Futures]

…what the rest of this year might have in store for the world of financial services and fintech.

Your marketing strategy will focus on Gen Z… For Gen Z, it is customary for birthday money to arrive via bank transfer, and for different APIs to track and even prevent their spending… it’s the quirky add-ons, funky features and “cool factor” additions that will appeal to this generation who were practically born with a smart phone in their hands that will give your financial products an edge. Gen Z will swiftly become a main target market for financial services, so their expectations should be taken seriously…

Fintech will wear green… The need for climate change was recognised more than ever before within every sphere, and the fintech sector was no different… It’s refreshing to see that climate change and environmental awareness are shifting their position in the world of finance. What was once just an obligatory tick-box exercise is now a central focus and driver behind companies’ strategies and product design…

Innovation will shift into sixth gear… Imagine a world where pensions, mortgages, charitable donations, or early salary payments can be processed in a less tedious, paperwork-free way. 2021 will deliver innovation to the areas of financial wellbeing that we usually dread dealing with…

It’s about more than just loyalty stamps… the role of online shopping and e-gift cards will step up a notch… e-Gift cards to help with school meals or to say thank you to dedicated key workers will become available. Using a prepaid QR code they’ll be treated to free meals at the end of what must feel like an endless shift. Virtual high-fives and digital thanks will be a big theme throughout 2021.


#FinancialInclusion / Milo brings in $6m to provide US credit to international citizens

“Banks had neglected us, lenders avoided us, and others just wasted our time,” the firm states on its website. “This frustration led to action and compelled us to create a company with global consumers unique situations at its core.”

Milo launched in late 2018, led by former Morgan Stanley financial advisor, Josip Rupena.

Only 30% of international consumers are ultimately able to secure US home loans, according to Milo. If they do get approved, they often suffer from high interest rates or a cumbersome customer experience.

Since finalising funding in summer 2020, Milo has processed more than $100 million in loan requests, doubled its team and launched two offices in Miami and Colombia…

Last year, it became the first company to do a fully remote digital closing for an international consumer. Milo says its proprietary technology “bridges the gap to deliver a fully online way to qualify, underwrite, and close a loan from anywhere in the world with very attractive US interest rates”.


#FinancialInclusion / HSBC, Microsoft, and Santander back Included VC’s diversity fellowship

The 12-month-long programme is designed to give those from diverse communities easier entry into the world of investing.

Europe’s seed-stage VC Seedcamp is another backer in the 11-company initiative, alongside seven other European funds.

As Included VC explains on its website: “Traditional methods of pattern recognition and ‘warm introductions’ limit diversity and reduce exposure to many of the most talented entrepreneurs.”

Whilst female entrepreneurs have, according to PitchBook data, climbed up the UK’s total VC investment for 2020 by 6%. There are still plenty of other minority groups not even getting a look in, and this is in large part down to a lack of diversity on VC boards.

Included VC argues it has “the broadest definition of diversity”. It covers gender, ethnicity, non-typical degrees, intergenerational diversity, disability, neural diversity, and applicants from excluded communities such as refugees and ex-inmates.


#PayTech / Payroll fintech founded by Google alums raises $35m

Co-founders, Andrew Brown, Vivek Patel, and Eric Stromberg, are all former Google employees.

Brown and Stromberg also founded streaming service, Oyster, which Patel worked on as a software engineer. Oyster was acquired by Google in 2016 and assimilated into the Big Tech.

Check says it already works with 100,000 small businesses, providing payroll infrastructure that “enables innovation across the ecosystem”… small businesses often use industry-specific software to manage their business, but all pick the same payroll service.

[Founder:] “Paying employees is still done in much the same way it was 30 years ago: through standalone systems.”


#PayTech / Ten trends set to influence the payments industry Fitech Futures

1. …growing popularity of treasury management solutions that link money-in and money-out, providing a clear line of sight into your finances. It’s likely we’ll see these solutions attract investment in 2021 as banks offer sophisticated, white-labelled cash management apps to their corporate customers.

2. Interoperability across multiple payment rails will bring more choice for consumers and businesses. In a world increasingly dominated by application programming interface (APIs), payments will become faster and easier to track.

3. Open Banking may evolve into open finance as it matures and we’re likely to see a growing number of value-add applications in corporate payments. We’ll see more account-to-account payments rather than traditional card networks, and white-labelling by the High Street Banks will help bring open banking to the market.

4. ISO 20022 will accelerate the digitisation of payments by enabling machine-readable, structured data to travel as XML tags in payment messages, which will improve straight-through-processing (STP) and compliance with anti-money laundering and know your customer (AML/KYC) requirements…

5.The G20 has launched an initiative into the pain points around cross-border payments, aiming to establish a roadmap for a frictionless future. It’s long overdue and hopefully 2021 will be the year that cross-border payments become simpler, faster and more secure.

6. Innovations in overlay technology are increasing, as by overlaying new services on existing systems, companies can avoid ripping and replacing expensive infrastructure. A good example of this is Visa B2B Connect being overlaid on Swift to improve cross-border transactions.

7. Public cloud platforms are gaining acceptance as a solution for financial services. Until recently, chief information security officers (CISOs) considered the likes of Azure and Amazon Web Services (AWS) to lack the security level demanded, but, as this year’s Sibos conference proved, public cloud solutions are at the heart of many financial offerings.

8. Whilst the consumer market has led the way in payment innovations, the business community looks set to catch up as technology providers look to these opportunities.

9. … accelerated digital transformation… for businesses

10. Financial crime remains a huge issue. As we move to an automated, real-time, remote and cloud-based world, the security and due diligence balance will remain essential…


#BigTech / Why Google Pay’s reboot signals a major land grab on financial services

… with the relaunch of the Google Pay app, it looks like Big Tech’s competitive threat to both legacy banks and fintechs is about to be realised… Here are five reasons why the banking world, including fintech challengers, needs to sit up and take notice:

1. Google’s scale and ubiquity
The first key weapon in Google’s armoury is the size of its user base. With five billion active Gmail users globally and 5.6 billion searches daily, Google doesn’t need to burn cash on customer acquisition in the way fintech start-ups have had to do in recent years…

2. Rich data
Through its product ecosystem, Google has access to unparalleled customer data and insights which it can now combine with a whole new data set – consumers’ financial data. This is going to be very powerful allowing Google Pay, Google Plex and Google personal financial management to develop much more compelling services than anything legacy banks and fintech companies provide…

3. Customer-centricity
Every company talks about putting the customer first, but Google – and the GAFA brands in general – are much better at user experience and at being customer-centric than most legacy banks…. Google knows how to package technology in a consumer-friendly way, and this is an area where legacy brands need to up their game urgently.

4. Google’s AI expertise
No one does artificial intelligence (AI) software better than Google. Google search and Google Assistant are way ahead of similar products by Amazon and Apple… Google’s entry into financial services means the company’s AI capability will have access to a huge new data set allowing it to become even more useful and powerful for users… Just think where this could take Google as it embraces its new role as a window on consumer finances.

5. Owning the customer relationship
Google Plex will embrace the banking capabilities of partners such as Citibank and Seattle Bank and overlay them with the proven Google experience. What this means ultimately is that Google has its eye on owning the customer relationship. Down the line, this strategy runs the risk of banks becoming commoditised. If they are reduced to the role of financial “plumbers” – only providing the back-office function – they may collaborate their way out of customers’ lives.

Final thought
Google’s play for financial service dominance isn’t a guarantee of success… But the new Google Pay does introduce a serious note of urgency and competition into financial services. Banks and fintechs need to recognise Google’s move for the land grab that it is.


#CryptoCurrency / Crypto Lender BlockFi Registers Bitcoin Trust With SEC

BlockFi, a major hub for crypto lending, appears to be increasing its courting of institutional bitcoin bets through a new bitcoin trust product.

The trust, revealed in Friday regulatory filings, could put BlockFi in direct competition with Grayscale for bitcoin-friendly Wall Street investors’ attention and dollars. Grayscale’s own bitcoin (BTC, +2.31%) trust is one of the single-largest bitcoin investment vehicles on the market. CoinDesk parent company Digital Currency Group also owns Grayscale.


#CryptoCurrency / Visa prepares for crypto future

Visa CEO Alfred Kelly says the card scheme is preparing its payments network to handle a full range of cryptocurrency assets.

… the company will treat the crytocurrency market as two distinct segments: traditional cryptocurrencies, such as bitcoin and Ether; and fiat-backed digital currencies including stablecoins and central bank digital currencies.

[Kelly:] “In this space, we see ways that we can add differentiated value to the ecosystem. And we believe that we are uniquely positioned to help make cryptocurrencies more safe, useful, and applicable for payments through our global presence, our partnership approach, and our trusted brand.”

Visa has already struck card deals with some 35 organisations in the crypto-markets, such as BitPanda and BlockFi… Looking to the future, Visa will also train its focus on upcoming stablecoins that can be handled as a traditional and globally accepted mean of exchange, including bank-issued coins and central bank digital currencies.

“We think of digital currencies running on public blockchains as additional networks, just like RTP or ACH networks… But we see them as part of our network of network strategy.”


#FinancialInclusion / Businesses look to fintechs to quickly pay gig workers

Lili, Galileo Instant and Gig Wage are powering flexible banking services to help companies and workers manage payments

… New York-based Lili, a banking app designed for independent and gig workers. Founded in 2018 and launched a year later, the startup offers a checking account and encourages individuals to save for emergencies by creating a separate bucket of money… People can define a daily amount for savings such as $1 and Lili will move the money into it… The company increased its features in 2020 by adding the option to save money to make tax payments… The company plans to add more features in 2021 such as launching savings accounts that generate interest, the ability to invoice and more professional services such as getting paid via credit cards. Lili works only with sole proprietors currently, but plans to offer services for small businesses and limited liability companies in the future.

Another fintech that helps contractors get paid faster is Gig Wage… Green Dot will serve as an infrastructure bank partner to Gig Wage, allowing the startup to offer “seamless, reliable” banking solutions to its instant payments platform for gig workers. The partnership means Gig Wage can introduce a new debit card with no monthly fee, free online bill pay and free cash pick-up at over 7,000 retail locations nationwide.

… Salt Lake City-based Galileo Instant that was launched in June 2020 for the gig economy. The company works with banks to standardize the debit card issuing process. Now businesses can create branded debit cards and accounts in 14 days instead of waiting several months to pay their freelance workers faster and not have to rely on cutting checks or making ACH payments… The goal of Galileo Instant is to enable businesses, especially those that seek a fast and easy payout solution to become fintechs through the use of embedded payments, Wilkes said. Instant has over 1,500 enrollments from businesses.