2015 Digital Banking Strategic Planning (part 2)

By Jim Bruene on August 21, 2014 3:07 PM | Comments

Continuing on the 2015 strategic planning theme (see part 1: insurance, lifetime transaction archives and subscription fees)....

Here are numbers 4, 5 and 6 in my semi-prioritized list of 2015 priorities:


4. Small business debt crowdfunding

While commercial lending in the United States is up this year, the small business segment is still vastly underserved. And while there are good reasons why banks choose to avoid riskier SMBs, none of the reasons make a lick of sense to any business owner. I know from experience. 

Luckily, we live in an era where strangers are willing to lend directly to other strangers via the Internet provided the returns are attractive enough (thank you Zopa, Prosper, & Lending Club for leading the way). So banks and credit unions, time is a wasting. Partner with one of the many crowdfunding platforms to extend credit to your small business customers. You can even grab some no-risk loan-fee income in the process. 


5. Mobile deposit time-based fees

Mobile check deposit is one of the more magical services to appear in the digital age. Who would have guessed even 5 years ago that you could instantly deposit a paper check by snapping a picture of it from your smartphone? And strangely, that there would be no fee for such a miraculous service. 

This feature, that gets people talking about their bank (in a good way), probably needs to live on as a free benefit. However, there is no reason that all deposits must be treated the same. We recommend a tiered approach based on the time it takes to access deposited funds and the amount of the deposit. 

For example, Regions Bank has a brilliant, and from what I hear, very profitable pricing strategy (see post). 

     Immediate credit >>> 1% to 3% of check amount, with $5 minimum
     Credit the same night (8 pm cutoff) >>> $3 per check
     Credit within two days >> $0.50 per check

     There is also a $1 fee to temporarily raise your daily deposit limit to deposit a large check.


6. Relationship mortgages

In late 2009, I refinanced my home through what was then ING Direct. While the process wasn't perfect (see post), it went pretty smooth and I've been happy with the bank even as it transitioned to Capital One ownership. I chose a 5-year term (with 30-year amortization) because it was an absurdly low rate at the time (though who knew that wasn't even close to the bottom). 

The bank has been encouraging me to refinance almost a year in advance of the end of that deal. I finally took them up on their offer. You'd think that since they knew my life history and have pretty much owned my home for 4.5 years, that it would be relatively simple to update. But it doesn't work that way. While the phone-based refi process has been relatively smooth (there was no online refi option for my loan), I feel like I'm going through the exact same process as a new customer. 

I know the bank has its hands tied by regulation and secondary market requirements, but they could at least make me FEEL like I was saving time by rolling over an existing loan. How about accessing my account (which I've had for 13 years) and letting me verify that the info is correct instead of making me fill out every field over and over again? 

To most families, the home mortgage is their biggest financial bets they will ever make and it's time that financial institutions create relationships with the mortgage at the core.  

To be continued...........

Categories: Strategic Planning

Last Chance for FinovateFall 2014 Early-Bird Tickets!

By Eric Mattson on August 14, 2014 9:51 AM | Comments

btn3_ov.pngFinovateFall 2014 is just six weeks away and the buzz is building. After announcing the impressive roster of presenters a few weeks ago we've seen a substantial surge in ticket sales. Based on that surge, we're now projecting a Finovate record audience of over 1,300 innovators, entrepreneurs, executives and investors!

If you're interested in attending to see the future of fintech debut live on stage, the last chance to get your ticket at the early-bird price expires this Friday. Last year, we sold out so please don't delay if you want to guarantee your ability to attend the event.

In case you're curious, here is a small sample of the great organizations already committed to attend:

  • Adobe
  • American Express
  • Bain Capital
  • Bank of America
  • Bank of Ireland
  • Bank of Montreal
  • Barclays
  • BBVA Compass
  • C1 Bank
  • Capital One
  • CIBC
  • Citi
  • Citi Ventures
  • Discover
  • Equifax
  • Everbank
  • Experian
  • FIS Global
  • Forbes
  • Gartner
  • IBM
  • Jack Henry
  • Liberty Mutual
  • MassMutual
  • MasterCard
  • MACU
  • New York Life
  • Nordea
  • Oliver Wyman
  • Paypal
  • Primerica
  • PwC
  • QED Investors
  • RBC
  • Rockland Trust
  • Route 66 Ventures
  • S&P Capital IQ
  • SAP
  • Saxo Bank
  • Sberbank VC
  • Scottrade
  • Silicon Valley Bank
  • SixThirty
  • Societe Generale
  • Sony
  • Swedbank
  • Tangerine Bank
  • TD Ameritrade
  • The Huffington Post
  • The Principal
  • Umpqua Bank
  • USAA
  • Venrock
  • Wells Fargo
  • Yankee Group
  • Zions Bank
  • And many more!

We'll see you in New York in September (or in San Francisco for FinDEVr)!

FinovateFall 2014 is sponsored by: The Bancorp, CapitalSource, Financial Technology Partners, Greater St. Louis Financial Forum, Hudson Cook LLP, Life.SREDA, UK Trade & Investment, Visa, Xignite & Zions Direct

FinovateFall 2014 is partners with: Aite, ABA, Bank Innovators Council, BankersHub, Bobsguide, California Bankers Association, Canada, Celent, Filene Research Institute, Hotwire PR, Javelin Strategy, Mercator, NYPAY, Payment Week, The Paypers, SME Finance Forum, & Visible Banking


The 40 Fintech Graduates from Y Combinator (YC)

By Jim Bruene on August 12, 2014 6:49 PM | Comments

image By most measures, Y Combinator (YC) is far and away the most important incubator in the technology space. Graduating from there is like facing the job market with a resume boasting summer internships at Google, Facebook AND Goldman Sachs. You are almost guaranteed a multi-million funding.

Fintech (note 1) has been part of YC from the beginning. The first class (Summer 2005) included one fintech startup, TextPayMe, among the eight companies. TextPayMe was acquired shortly thereafter by Amazon for a rumored $3 million.

But as YC grew from 2005 to 2009, the number of fintech companies stayed at roughly 1 per year. During those five years, YC graduated 5 fintech companies out of a total of 139 (3.5%). Suddenly in 2010, the fintech number grew dramatically, average of more than 7 per year. During the past 4.5 years, there have been 35 fintech startups out of a total of 406 (8.6%) (see note 2). 

Table: YC Fintech Companies by Year

Class Total Companies # Fintech Companies % Fintech
2014 (half year) 56 5 9%
2013 83 9 9%
2012 117 8 7%
2011 89 7 8%
2010 61 6 10%
2009 39 1 3%
2008 43 1 2%
2007 32 2 6%
2006 17 0 0%
2005 8 1 13%
Total 545 40 7.4%

Source: Y-Combinator (yclist.com), Finovate analysis 
(see note 1 for Fintech definition)


List of fintech YC alums by year

2014 (Winter class only)

Say goodbye to expense reports.

Digital currency data and analysis. TradeBlock's digital currency tools and research are trusted by hundreds of thousands of traders and enthusiasts across the globe.

Two Tap
Users can now order any product directly in your app with Two Tap.

We are pioneering the first online microlending community to connect lenders and borrowers directly across international borders - overcoming previously insurmountable barriers of geography, wealth and circumstance.

Zinc is the best way to buy. Pay with with Dwolla or Bitcoin, and manage all your orders in one place.


Trade bitcoin with ease.

PayTango links the cards in your wallet to your fingerprints.

Featured investments available for funding.

Simple health insurance for small businesses.

Standard Treasury
APIs for commercial banks.

Swish is a dynamic, specialized mobile payment company that has developed a ground breaking new card reader and application which provides a complete mobile point of sale solution to any size business.

True Link Financial
We keep a watchful eye out for fraud and spending mishaps so you can spend your time doing what matters.

We aim to give everyone - regardless of wealth - the opportunity to invest in startups.

Zenefits runs your benefits, so you can run your business. Get affordable benefits for your company in minutes. Then set and forget them.


Airbrite is a cloud-enabled platform that powers mobile commerce We are the next generation of e-commerce. Our mobile-first API powers modern shopping.

Your Hosted Bitcoin Wallet. Coinbase is the easiest way to get started with Bitcoin.

Crowdtilt allows users to pool funds for objectives in a simple, social, and frictionless way online.

Real Time Eligibility Checks for Health Insurance.

FundersClub is a web service that gives investors unprecedented access to investment opportunities and the tools to review and invest online with ease and speed.

LendUp is reinventing the payday lending industry

SmartAsset makes life's biggest decisions easier by bringing full transparency to the financial decision making process.

We are creating beautiful, modern payroll.


We are an automated credit counseling solution to help customers get out of debt, a little like a “turbo tax” for those who need debt relief.

GiftRocket sells a new type of gift card that works at any location.

GoCardless is a UK-based service that allows smaller merchants to easily set up interbank transfers for customers.

Leaky helps consumers make better decisions about insurance.

OrderAhead is the easiest way to order from local merchants on your phone.

The simplest way to save for a child's future.

SwipeGood allows users to enroll their credit or debit cards and automatically round up every purchase to the nearest dollar for charity.


Cardpool is a gift card exchange marketplace where anybody can buy, sell, or trade their new or pre-owned gift cards.

E la Carte
E la Carte develops tablets for restaurant tables so guests can order, pay and play games from their seats

FutureAdvisor was founded in 2010 on the premise that investing for your future does not have to be difficult or expensive.

Accounting, taxes & payroll. One solution. inDinero is your company's accounting department.

ReadyForZero creates online financial software that helps people control and reduce debt.

Stripe is a simple, developer-friendly way to accept payments online.


WePay is an online payments platform for individuals, organizations, and businesses.


Tipjoy was a simple, social payments engine that allows merchants to sell digital content and features, charities to raise money for causes, and individuals to give money to one another.


Buxfer is the next-generation personal finance solution, taking money management to the web.

SocialPicks provides individual investors with a trusted online investing community where they can invest smarter together.


TextPayMe was an SMS payment service that lets you send money to other people using cell phone text messaging.


1. We are using a broad definition of fintech including payments, insurance, investments, gift cards and even a few that are ecommerce focused such as E la Carte which is an order entry and payments play for restaurants.
2. Some YC companies are in stealth mode, so this public list is not 100% complete.

Categories: Startups

FinDEVr 2014 Presenters Revealed!

By Eric Mattson on August 11, 2014 4:39 PM | Comments
FinDEVr Logo

FinDEVr San Francisco 2014 -- the first event focused on fintech developers -- is less than two months away, and we're excited to announce our presenters!

These leading companies came from a competitive application process designed to find the best ideas and innovations for fintech developers. Not only did we have an unprecedented number of applications for a debut event, but we also saw an incredible range of cutting-edge solutions!

On Sept. 30 & Oct. 1 in San Francisco, they'll showcase their latest tools, APIs, and platforms via fast-paced onstage presentations and in-depth workshops.

On the first day, our sponsoring presenters will reveal their latest & greatest fintech to a packed auditorium, then close out the day with happy hour and dedicated networking time. Here's who you can expect to see on stage on Tuesday, Sept. 30:

  • Platinum Sponsors: Yodlee Interactive, TD Ameritrade, MasterCard & Visa
  • Gold Sponsors: PayPal & Forte Payment Systems
  • Silver Sponsors: Financial Apps, Avoka, Xero, InComm, EVO Snap, Xignite, Eshta & Intuit
  • Bronze Sponsors: CardFlight, BehavioSec, Mifos Initiative, Cloud Lending, ModoPayments, StockTwits, Bluefin Payment Systems, Finicity, Expensify, OnDeck, Paradigm4, Tradier & PayNearMe

After whetting the audience's appetite on day one, our sponsoring presenters will kick off day two with deep-dive workshops into their developer technology. These 50-minute workshops will run throughout the morning in six tracks and continue into the afternoon.

Alongside these workshops, another round of fast-paced presentations will also take place during the second half of Wednesday, Oct. 1 in a shrunken auditorium. Here is the initial list of the cutting-edge companies that have been selected to present on day two: BCL Technologies, Bionym, BlockChain.info, CopSonic, CrowdCurity, Entersekt, Kiind, Knox Payments, MASSPAY, Morpheus Aiolos, PayStand, Pich Technologies, Plaid, Prudena, Sekur.me, SimplyTapp, TagCash, Thinknum, Trulioo & The TxPUSH Initiative.

Even prior to today's announcement, tickets have been selling strongly and we're pleased to be projecting an audience of 400-500 for the event. The room is going to be packed with developers and technical execs from startups as well as financial institutions like CIBC, Experian, Wells Fargo, BlackRock, USAA, Capital One, Target, and Western Union.

If you and/or your technical colleagues are interested in attending to learn about the latest innovations for fintech builders, tickets are on sale at the very early-bird discount of $200 off through Friday August 22nd.

We'll see you there!

FinDEVr San Francisco 2014's VC sponsor is: Life.SREDA

FinDEVr San Francisco 2014 is partners with: BankersHub, BayPay Forum, California Bankers Association, fin-tech.org, Hotwire, Mercator, PaymentWeek & The Paypers


The Surprising Banking Giant Behind New Savings Site Sumday

By Jim Bruene on August 5, 2014 10:18 AM | Comments

BNY's Sumday.com homepage

Last week, the Internet discovered an interesting new savings site called Sumday (note 1). It has responsive design, a cute intro video, and social media integration. But it also has something that few trendy fintech plays have, a $230 billion dollar parent, BNY Mellon. 

I've published something like 2 million words about retail banking and technology and this may be the first time "BNY Mellon" (or Bank of New York) has appeared. Not because they aren't a good company, but its specialities, corporate banking and uber-wealth management, rarely fit our editorial coverage. 

But surprisingly, BNY is bankrolling Sumday, a site encouraging beginners to start investing with "as little as $1.00." That's about 6 zeros to the left of the decimal point from where the typical BNY Mellon client usually starts with. All money collected through Sumday is invested in the Dreyfus Basic S&P 500 Stock Index Fund, according to the prospectus accessible in the fine print (the fund is low-cost index offering charging just 20 basis points annually in fees). 

One distinguishing feature of the service, you can automatically add a preset amount of cash whenever you use hashtag #sumday on a tweet. That's a novel feature, but it's unlikely to get much usage (e.g. most people don't want to use precious characters to add a misspelled hashtag to their snarky missives). Still, it's a nice addition to a platform clearly targeting youth. 

Other than that, there is little detail spelled out on the site. It is in closed beta and soliciting email addresses for the waiting list.

Apparently the project is a collaboration with IBM given that the only person on the LinkedIn listing provided by Sumday is a consultant with IBM Interactive Labs. 

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