Vista Equity Partners has announced the acquisition of DH Corporation and intended merger with Misys; DH Corporation is a Canadian fintech company with a full range of technology solutions for financial institutions; Misys is a UK-based firm also providing similar solutions for financial institutions globally; in January it announced a new P2P lending solution for banks, FusionBanking Crowdlending; Vista will acquire DH Corporation for approximately $4.8 billion, representing a premium of approximately 36%. Source
Revolut will now offer its customers investment at property platform Bricklane; investors can invest in Bricklane tax efficient individual savings accounts for a minimum of 100 British pounds ($122); Bricklane investors receive rental income and capital appreciation from the properties they invest in. Source
The company's speech recognition technology has reported a 5.5% error rate in speech recognition, breaking the previous speech recognition error rate of 5.9% set by Microsoft in October 2016; the current error rate for speech recognition falls just above the newly reported human error rate of 5.1%; the speech recognition error rate continues to be a focus area as speech recognition technology becomes more broadly utilized in consumer electronics and the internet of things. Source
HNA Group has a diverse portfolio of investments in a wide range of industries spanning from hotels to electronics and airlines; the Chinese-based company has now reported significant investment in the financial services industry with recent deals focused on the SkyBridge hedge fund platform, New Zealand lender UDC Finance and a 3% stake in Deutsche Bank; the investments from HNA follow encouragement by Beijing in global investments; they also reflect China's growing middle class and the expected demand for broadened investment options among Chinese consumers. Source
At LendIt USA, Antony Jenkins from 10x Future Technologies discussed the challenges for incumbent banks in implementing transformative technology; Jenkins says transformation for incumbent banks is very difficult primarily because of the cultural change; Jenkins' 10x Future Technologies is developing software and API technology for banking products including current accounts, credit cards, mortgages and loans. Source
Fintech innovation is not only being fueled by faster, lower cost alternatives but also by the potential to reach a broader market demographic; while financial inclusion is a current market focus, many lenders have positioned their underwriting for the extreme opposite; American Banker's Penny Crosman analyzes both market extremes; notes the prevalence of current underwriting systems that integrate college degrees attained as a factor for credit approval resulting in a greater number of loans to elitist borrowers; identifies potential reform that could infuse financial inclusion mandates for all fintech companies beginning with provisions in the OCC's fintech charter that require financial inclusion considerations and following with further direction from the CFPB who is currently studying the use of alternative credit data for more inclusive borrowing; if financial inclusion mandates do become requirements it could provide even more momentum for the growing number of inclusive credit providers but also significantly upend a majority of the market's underwriting schemes which are based on algorithmic analysis with variables targeting socioeconomically elite borrowers. Source
Commercial credit data sharing scheme (CCDS) is a market solution providing data sharing for alternative lenders in the UK; the CCDS was launched on April 1, 2016 and is now nearing full integration which means the majority of mandated banks have implemented systems to share their data with UK credit agencies; CCDS will provide current account banking data to credit agencies for approximately 98% of small businesses in the UK which is expected to help improve credit underwriting and broaden credit availability. Source
Citigroup has reported the appointment of Yolande Piazza to head of the company's fintech unit after naming Piazza interim head in August; Piazza will permanently replace previous leader Heather Cox who left for a role at USAA; Piazza has extensive experience with Citigroup working at the company for approximately 30 years and previously serving as the fintech unit's chief operating officer; initiatives for the Citigroup fintech unit are primarily focused on mobile. Source
According to ThreatMetrix, digital fraud has been costing insurance companies approximately $250 billion annually in recent years; data from ThreatMetrix also reports that fraudsters have compromised over five billion personal identities, 1 in 10 insurance accounts are fraudulent and 3% to 5% of all claims in the US are fraudulent which adds approximately $400 to the cost of a family's insurance per year; with these statistics, development in advanced fraud solutions is also becoming important for insurtech; machine learning and artificial intelligence (AI) are the main drivers behind many of the industry's fraud detection solutions and the AI capabilities are expected to gain even more traction as additional solutions evolve. Source
AmEx has recently begun offering personal loans however its loans are only available to existing credit card customers; the firm says its new product is focused on its premium, high-credit quality card customers; overall, the firm appears to be taking a cautious customized approach to the lending product while also using the new initiative to help improve market share and struggling business growth. Source