Sunil Madhu, CEO & Founder, Instnt
Chatting with Sunil Madhu
Sunil discussed the launch of Multipass, a new solution that Instnt are bringing to market around universal ID. He explained that as consumers, we go through a lot of friction on a day to day basis, having to establish accounts at different financial services companies for every single product we subscribe to and having to go through sign ups, KYC and fraud checking.
Instnt thought they could eliminate all that noise between the consumer and the product and bring the consumer as close to the product as possible, within one click or a scan of a QR code. When the customer signing up and accepted for the very first time, they are issued a reusable pass. It’s done behind the scenes with the mobile app of the business that the consumer is using. In essence, the consumer gets a prompt from the mobile app that says the financial institution is passing you some information about you that was just verified and asks if you wish to accept. When they click yes, this pass is seamlessly passed into that mobile app, into a secure identity wallet behind the scenes. When that customer comes back and is being upsold additional products, where they’d normally have to sign up over again, instead, they get a prompt from a mobile app that says, can I just use this pass, log you in or sign you up? So, they just click Yes and they’re in. You don’t have to sign up anymore. All the information required to verify you is in the past. The pass is cryptographically secure, and the way you are verified for the level of risk for the products you were accessing before when that pass was given to you is codified into the pass, so the recipient of the pass is able to use these open standards, verify that in fact, the pass belongs to you, that it’s not been stolen, the data has not been altered and how that pass was issued and with types of verification – biometric or passports for example. All of that information is there in the pass so the business can use that information behind the scenes to go do all of the bootstrapping that they would normally have to do in order to set up that new account for you.
From a user acceptance perspective, you’ve got the most frictionless experience. Now, all that information about you is owned by you, decentralized in your mobile app, in your hand. The business no longer has to worry about somebody hacking into them and stealing all of your information and exposing them to all sorts of reputational types of risk. They’ve made it easier for the customer, and at the same time they’ve made it better for their business.
Sunil believes that this technology is timely and it’s going to change the future. It may take five years because the industry moves a bit slow, but he said that it’s already got legs. The federal government started using the same technology to issue passes. They’re looking at digital passports for citizens, and the private sector and financial institutions are looking at ways to give people these type of seamless, frictionless experiences without skimping on the risk and blind stuff, which they required to do because they’re regulated. This solves both problems.
Sunil mentioned why it was important for Instnt to launch the Multipass at Money20/20. He said unlike a lot of conferences, Money20/20 is vertically integrated. So, all the vendors, the aggregators, the fintech companies, the banks, credit unions, they’re all represented at the event.
Sunil went on to talk about the technical side of what the Multipass means for Instnt moving forward. 30 years ago, he was part of a startup that created a standard called SAML and the concept called Single Sign on. Back then in the 90s, the internet was just new and enterprise applications were growing, and people had to remember a dozen passwords for all the apps that we’re using in the office. So, he came up with this idea of using a single password, a single ID to access all of these different applications that ended up generating a new standard called SAML. That became open authentication on the internet and consumers can now use Facebook or whatever their social media choice is to log in with that identity. But he said what’s missing in all of this is trust. Just because someone tells you this is my name and here’s my Facebook ID doesn’t really mean that they’re real or that you can trust them. And so, he wanted to bring this full circle and say, well, how can his company help accept that customer and verify them in a pretty secure manner? And then how can his company give control of their data back to them? And how can they have that single sign on experience but extend it to registration’s single sign on? And what can they do to get rid of passwords and all that friction? Because that’s contributing to the problem in the first place of hacks. And that was one of drivers for him to go and start Instnt on the back of Socure, because he realized that the market is still inefficient, and businesses are constantly having to trade-off between how many good customers to let in and how to keep the bad people out.
So, he came up with this business model for Instnt as a provider of fraud insurance and of fraud protection to businesses, that allows businesses to accept more good customers, get protection from the losses and eliminate friction for the consumer. That’s the full circle journey for him.
Tracey Davies, Global President, Money20/20
with Tracey Davies
Tracey talked about what Money20/20 is doing differently in comparison to other events in this sector. She said the 12 year old event was created and founded to bring the industry together, whether that be banks, fintechs, VC or startups, to do business under one roof. The things that stand out are the scale, the volume of people from every corner of the industry. She said Money20/20 events are held in the USA, Europe and there will be an event in Bangkok next April, on April 24. She described is as ‘where money does business.’
Tracey went on to say the USA event is their original show, having launched in 2012. The Europe version was launched in 2016. But it’s not just about the USA, there will be people from over 95 countries at the event this week. Everyone is here because money is global and everyone’s coming to do business. Vegas is their biggest show, everything is bigger here, including Money20/20. Money20/20 is also about having fun. She said at the event they have got various evening industry nights, including 50 years of hip-hop. She also noted that Money20/20’s other signature is its creative side, which can be seen with thing like the Money Motor Circuit.
Tracey talked about Money20/20’s launch of Twentyfold which is a new intelligence platform focused on helping their customers do business. It is a digital product that helps the industry do business by finding startups. They are in early access phase at the moment at Money20/20, showing it to their customers and demoing it. It will launch fully in January, covering 80,000 fintechs globally. It’s fintech specific and Tracey described it as the ‘deepest focus on fintech startups globally’. It will enable VCs and fintech companies to find and identify startups, particularly early stage.
Tracey talked about the Money20/20 podcast, which featured Sunil Madhu being interviewed by Sanjib Kalita, who is known as the Chief Wizard at Money20/20. The conversation between Sunil and Sanjib centred around identity and how the progression of the industry is about the removal of friction for customers. They discuss the announcement that Instnt have made at Money20/20 around MultiPass, their new product that enables one click identity verification. Money20/20 is all about big announcements that move the industry forward. And Tracey said they are delighted to see many customers making big announcements at the event. Money20/20 is delighted to have Instnt make such a big announcement at the show, which is about making the customer experience more frictionless.
Finally, Tracey touched on the launch in Asia again. She said Bangkok is a fantastic city, Asia is a truly exciting fintech market. It’s logical that Money20/20 should be there. They’ve already announced over 50 speakers from 15+ countries, it’s such an incredible dynamic region with innovation and incredible startups.
Dee Choubey, CEO, MoneyLion
with Dee Choubey
Dee started by saying he is fascinated by cutting edge innovation and in particular all forms of artificial intelligence. He talked about the role of AI across the supply chain – financial services, operations, compliance, underwriting and the consumer experience. He thinks the way consumers think about things like loans, mortgages, credit cards will change with the power of personalization that artificial intelligence brings.
Dee then talked about how MoneyLion emerged. He started the business ten years ago in 2013. One of the things that they saw when they started the business was the large money center banks were on the sidelines from creating personalized experiences for the long tail of American consumers who were struggling with finances. He noted that modern economies in the United States and Europe have a very robust form of credit reporting and credit scoring. But oftentimes there’s a lot of data out there that really reveals a lot more about the consumer. And that was the original premise of MoneyLion. Using all these different pieces of data, MoneyLion are going to predict when a consumer has money and when they run out of money. The business started off as an experiment and since then it’s been an unbelievable mission driven journey. They now serve over 10 million consumers.
Dee then talked about what opportunities there are for MoneyLion in terms of AI. He said that embedded finance has multiple meanings. You can embed banking products deeply into workflows, in entertainment or shopping or ecommerce. But consumers use credit cards and loans and other financial instruments to navigate their life. MoneyLion have a business called Engine and they embed marketplaces across the internet. MoneyLion often powers widgets or the personal loan calculators for the likes of CNBC or Forbes or Fortune. And then they take the consumer consents and data and match them with the best financial product in real time.
Dee talked about the onboarding process at MoneyLion. He said the industry came from the medieval ages to 2023. He talked about password management which has become frustrating for a lot of consumers. He said it’s about striking the balance between really, really fast and convenience and protecting people’s money.
Dee highlighted fraud is growing and it’s getting very sophisticated. He told a story about a robo zoom call where an avatar of someone was instructing the Treasury team send money to five different accounts. He sees a lot of innovation on both protecting fraud and the fraudsters trying to use all of the tools to do the nefarious activities that they want. But he said that vendors like Instnt are going to do a really good job in staying ahead of those datasets.
Beverly Anderson, President & CEO, BECU
Russ with Beverly Anderson
Beverley talked on a panel about levelling the financial playing field with regards to international payments. She explained the importance of global remittances and creating a trust-based system that allows people to move money around any way that they want. The second thing that was talked about is financial inclusion and how across the financial ecosystem, it’s important to cast a broader tent and bring everybody into that tent to serve their needs. And the third thing discussed on the panel was the future of fintech, mergers and acquisition, consolidation and expansion.
Beverley went on to talk about the challenges they have when it comes to customer onboarding as historically BECU has been a human high-touch channel. BECU have neighborhood financial centers. Their customers would come in the door, and BECU would onboard them that way. Over the last several years, they’ve really invested in digital, giving their members access to ease of use, real-time movement in things like account setup and onboarding. BECU make sure that they know who their customer is right at the very beginning and they work with a number of partners that are at Money20/20 to help with layering in things like fraud tools and KYC capabilities.
Beverley explained BECU have been investing in fraud for quite a while and are excited about some new partnerships that allow them to really look at fraud proactively and reactively, particularly in the digital space. She said they’re really focused on understanding data better, leveraging their first-party data. She said it is important for BECU to stay up to date on the latest and greatest innovations in fraud.
She then spoke about three priorities for BECU: developing an execution path for a new vision and strategy that they rolled out to the organization this year; ensuring that our employees have the right employee experience at BECU; and finally making sure that they stay in touch with their members’ needs and continue to focus on helping improve the financial wellbeing of their members and their communities.
Milton Santiago, Global Head of Digital Solutions, Silicon Valley Bank
Graham with Milton Santiago
Milton highlighted that Money20/20 is giving SVB an ability to show the market that they are present. It also gives them an opportunity to really connect with their clients as many of them have booths at Money20/20. Their customers not only use their services for banking purposes, but also use many of the technologies that SVB have to power their businesses, therefore it is important for SVB to be present and have conversations with these clients.
Milton summarised the past year at SVB. He said they are engaging with clients even more. SVB have met with well over 30,000 clients which helps to reinforce their relationship and enables them to understand the needs of their clients and then deliver and exceed these needs through innovation. Milton said that this industry has the most challenging client base in the world because these customers are disruptors but SVB are prepared to meet this challenge.
Milton went on to discuss the announcements they are making at Money20/20. He talked about an announcement around embedded technologies that power their clients’ business and online banking solutions, which allow SVB clients to manage their business, something that is especially useful for start-ups. In addition to that, SVB focused on making the onboarding process as frictionless and as expedient as possible. SVB have looked at embedded solutions that allow clients to collect payments and for clients to initiate payments and they are seeing around 4.5 billion transactions go through these embedded solutions on a monthly basis.
Milton explained the onboarding process at SVB. They have simplified the onboarding process online to be no more than six screens. Within minutes clients can onboard themselves and there’s no paper exchange. Their clients are digital natives and also disruptors who are very vocal about whether they like something or not, but currently over 80% of their clients are using this process for onboarding and the reaction and feedback has been positive.
Milton then highlighted how AI is impacting fraud and how SVB combat this. He said SVB educate their customers to identify fraud, enabling them to be wiser, especially for those that are doing a lot of fast business because when you’re going fast, you can fall victim to things that you wouldn’t have under normal circumstances. He said is it about a layered security model during the onboarding and the online banking process. He described it as an invisible guardian that is overseeing transactions and making sure that you are who you say you are and the transactions are the ones that you intended.
Kayla Jones, Chief Fintech Banking Officer, Focus Bank
with Kayla Jones
Focus Bank brought Kayla on as Chief Fintech Banking Officer to head up the fintech department. Kayla said it started with an acknowledgment by their board and CEO that there’s been a significant shift in the banking industry. After recognizing brick and mortar locations may not be the way to expand as a community bank in Southeast Missouri with just under $1 billion in assets, they bought her on to build a fintech sponsorship division for the bank. They spent the first year building out the program, talking to their regulators, having conversations, and they are building out that pipeline and looking to continue to grow.
Kayla then spoke about the top priorities over the next 12 months, which would be to onboard their first couple of partners, making sure they’re running that process efficiently; continuing to build out their project pipeline; and then looking at how they can improve that experience for the fintech.
The onboarding process at Focus Bank starts with a thorough due diligence process from the beginning. The top priority is making sure they’re running a sound and compliant operation. They have conversations with executive leadership, senior leadership, their compliance team, their BSA team if they have one and make sure Focus Bank really understands their vision and where they might need to make improvements. They looking at metrics like whether they are meeting project deadlines.
Kayla explained that their fintech partners are looking to get a product to market as quickly as possible and Focus Bank want to make sure it’s compliant. But Focus Bank also want to make sure they are allowing them to move quickly. Therefore, their key metric is really whether or not they’re able to meet those timeframes. Kayla said they relying heavily on feedback from partners about what they would like to see and if they’ve had challenges in the past, how might Focus Bank be able to address those.
Kayla considered how AI is challenging the industry. She said fraud is a continued concern and with the introduction of AI, certainly a growing concern. But they’re also excited to see how the industry, as a whole, answers that threat. If there’s AI that’s committing fraud, they expect that a lot of these fintechs are going to be able to answer that with their own AI. With Focus Bank being a community bank they still see the value of the human touch – they know their customers by name and understand their spend habits so it’s easy to pick out some of those patterns that may not be typical for their customer base.
Todd Pollak, Chief Revenue Officer, Marqeta
with Todd Pollak
Todd talked about some trends in the embedded finance space. For Marqeta there’s been this transition to shifting gig workers. He said around 60% of people are in hourly wage jobs. And the reality is most of those people are either unbanked or don’t have a solution for finances. Marqeta are seeing companies that have traditionally not been in financial services, really thinking about how they can offer specific opportunities around credit building. Can they have their wages given to them on an accelerated basis, can they get wages directly after they work their shifts? He said companies want to offer this to their employees as it creates loyalty and goodwill and there’s this idea of longevity, which goes beyond the traditional payments’ ecosystem.
Todd sees onboarding as one of the most important things they do at Marqeta, focused around how quickly they can get people up and running, a traditional process for them is usually about 4 to 6 months. They have use cases, like expense management or consumer financial hub that they’ve done for multiple customers and because they’ve done that with partner and sponsor banks on a regular basis, they are very fast to market. Marqeta generally assigns someone from their team who’s a specialist in that construct to work with a customer and get them onboarded. Marqeta try and make it as simple as possible by providing them with as much expertise and background in the area they’re interested in.
Todd then talked about fraud. He said Marqeta have a whole team that’s dedicated to risk and fraud which starts with KYC, KYB. They are constantly looking at ways to identify fraud and make sure that the folks that are on the platform are users of the card. For Marqeta, they have lots of rules and decision engineering that they’ve been building. They have the fourth largest debit program in the world and they’re constantly seeing interesting use cases pop up and working with their partners to talk about how they combat fraud in the future.
Todd then highlighted Marqeta’s State of Credit report. The main finding was that more than 50% of 18 to 45ish-year-olds are interested in a new credit card in the next 12 months. The second thing they learned is that consumers don’t really gravitate towards the bank. Therefore in the co-brand, the consumer is really more attached to the brand. As a result, there is a huge opportunity in the market for corporations to really think differently about what they offer to those consumers that banks haven’t traditionally done. The third thing he mentioned is personalised rewards, which is generally what people want and it is what they are building at Marqeta. They completely personalize the rewards structure for every individual user that’s on the platform that has a card.
