Has That Doc Been Tampered With? Ocrolus Will Detect it

September 20, 2022
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online fraudBuilding off its original technology, Ocrolus has added a new fraud detection solution called Detect.

“Detect uncovers document fraud and provides high-quality, decision-ready data that helps lenders minimize risk and prevent unnecessary losses,” said David Snitkof, Head of Analytics at Ocrolus. “With Detect, we’re able to show lenders when editing software was used, and if things like account number, account holder, dollar amounts, and more have been edited on a document.”

This analysis can be performed through the Ocrolus dashboard or API so that can lenders can review it and make a qualified decision. Tampered areas of a document are highlighted in red.

“In some cases, we’re able to uncover the original document and show it side-by-side with the tampered document,” said Snitkof. “This paints a vivid picture of how fraud is taking place.”

Snitkof believes Detect will be an asset to the company as they have already seen tremendous impact with their customers.

“For a leading small business lender, we were able to identify file tampering on 21% of confirmed fraud losses. Detect would have saved the lender over $1.2 million. That’s a significant return on investment,” said Snitkof.

To be clear, the company had previously provided customers with a fraud detection solution and this is merely a significant update.

“Fraudsters are constantly innovating and developing new techniques to misrepresent the truth and steal lenders’ capital. Even when they manipulate a document, it is often a high-quality forgery, where there would be no way for a human reviewer to identify any inconsistency,” said Snitkof.

Recent occurrences and the increase in fraud have ignited Ocrolus to improve their tools.

“People often take others’ financial documents, modify the information, and pass it off as their own. Sometimes, a fraudster will create cash out of thin air – for instance adding digits to a transaction amount – and then also change all the other numbers on the statement so that all the numbers reconcile perfectly,” said Snitkof.

What The Collaboration Between Helix by Q2 and Ubiquity Means

August 31, 2022
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HelixWith the rising phenomenon of embedded finance springing across the industry, Helix by Q2 and Ubiquity have partnered together to help non-bank companies embed financial services inside of their existing offerings. Headquartered in Austin, TX, Helix by Q2 gives fintechs and brands the building blocks of banking such as accounts, cards, payments, data and more. New York-based Ubiquity, meanwhile, provides end-to-end solutions for customer experience management, back-office operations, and business transformation.

“We did a ton of diligence looking at all of the different players in the space and we felt that Ubiquity was the best partner for us and also for our partner prospects to help them build personalized managed services at scale so that they can focus on launching an excellent and unique product,” said Ahon Sarkar, General Manager of Helix by Q2.

Sarkar expressed the importance of personalization when customers are seeking assistance so that (1) they can be directed to the right person for their matter and (2) so they can make the overall customer experience beneficial to the services they’re seeking. The “cookie-cutter” customer service experience, as he described it, doesn’t always mesh with a brand’s identity. Ubiquity, however, goes the extra mile in Helix’s view in maintaining that brand pesonalization.

Matt Agronin, Chief Marketing Officer at Ubiquity, said that when it comes to dealing with financial products in particular, it becomes incredibly personal, that there’s nothing more personal than that.

“[…] when things seem too complex, or you’re getting piecemeal answers in your journey, when you’re a customer and you’re seeking to find answers, technology solutions that are robust, clear and unified, and a customer service organization that understands and empathizes with the customer’s situation are what are going to yield best,” Agronin said.

The collaboration is supposed to make for a smoother experience for customers to be led in the right financial direction when adding embedded finance as a service to what they already have.

“We’re taking the elements of banking and making it so that people can use those building blocks of finance, to create unique products, to create unique experiences,” said Sarkar, “and embedded finance is kind of what our customers are doing with it. They’re taking the banking products and they’re embedding it inside of their existing business in order to make things unique that you couldn’t make without being that type of business.”

With the strategy of providing better customer service, Agronin agrees that having Helix as a partner allows both companies to manage customers and grow in relationships with brands.

“At Ubiquity, we’re here to help brands scale fearlessly,” Agronin said. “So that means providing world class and dedicated CX brand ambassadors and seasoned banking operational professionals to help these fintechs grow their business and their customers. So, we’re here to help them in the background, take away parts of the business that they may not be able to handle right now given their size, or parts of the business that are not their core skill set so they are able to focus on their actual business and the product roadmap and we can help manage the customer.”

Funding Circle’s Partnership With Farm Bureau Bank

August 26, 2022
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tractor farm“I think the main thing is that Funding Circle for a long time’s been working with banks and the way we work with Farm Bureau Bank is no different, which is we’re out here to try and put money into the pockets of small businesses,” said Angus Sanders, Chief Revenue Officer & VP Product at Funding Circle, “and Farm Bureau Bank is going to help us to do that.”

According to Sanders, Funding Circle and Farm Bureau Bank have joined forces in delivering quality loans to small business owners. This partnership allows Farm Bureau Bank to purchase loans through Funding Circle in support of the small business community. They even extend a hand to small businesses in rural communities who may not be close to a bank to receive the services they need to grow their business.

“For those customers who are in rural areas, and perhaps can’t travel so easily to a branch, working with Funding Circle and Farm Bureau Bank, they’re able to get a loan much more easily and quickly, typical turnaround, 24 hours to offer and 48 hours to loan, which is very different to your typical small business loan. So, I say those are the primary areas where this helps small businesses,” said Sanders.

With the increase of banks wanting to do more small business lending, sometimes they struggle with finding businesses or being able to process the loans, Sanders explained. Working with organizations like Funding Circle, Farm Bureau can now provide capital faster and fund more small businesses.

During the pre and post-pandemic era, Sanders said he believes that fintech has evolved and will only continue to do so. And with fintech on the rise, Sanders said that other products like Lending as a Service, will continue to be a key growth area in the coming months.

“Farm Bureau Bank is starting with financing and we hope someday they’ll refer deals to us, […] but what this really shows is the deepening focus on partnerships between fintechs and banks, and particularly this emergent Lending as a Service product, which within Funding Circle sort of takes the lead on but lots of other fintechs go into and I think you’ll see, you’ll see more about that in the coming months,” said Sanders.

Ocrolus Meets Lendflow

August 19, 2022
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OcrolusFintech infrastructure company Ocrolus has joined forces with Lendflow, an embedded credit platform to make it easier and faster for lenders, fintech companies, and SaaS companies to offer credit.

“Ocrolus is a part of Lendflow’s platform,” said David Snitkof, Head of Analytics at Ocrolus. “So, if a lender is using Lendflow, they have the ability to then use Ocrolus through Lendflow and be able to automate the digitization of documents, automate the credit analysis that we do on those documents, automate cash flow analysis of small business borrowers, and make it very, very easy to seamlessly take all of the analytics that Ocrolus generates and puts them into Lendflow’s Decision Engine to facilitate good and speedy decisions.”

Lendflow allows for a wide range of companies to create digital lending experiences to help them grow.

“It’s really tailored to what the users of that product wants to do and the proprietary data that relates to the users of that product, all that kind of stuff,” said Snitkof. “And, it enables Lendflow customers to do a couple things. It enables them to provide a more holistic customer experience, but it also provides them another way of monetizing their software products and their customer experience.”

The two companies, Ocrolus and Lendflow, found an easily integrated synergy between their products. Lendflow’s decision engine allows their clients to be exposed to Ocrolus’ data, analytics and features and later decide which basis they would like to create approval for.

“So, they can say, ‘hey, I want to get these 20 different fields from Ocrolus whenever an application comes through and now I’m going to choose, you know, this field and this field and this field’ and set different thresholds and different criteria for who gets approved and how they get approved and what kind of line they get, what kind of price they get, depending on the results of that data,” said Snitkof.

Ocrolus has quickly expanded and helped process more than 200,000 small business applications monthly. And with their new collaboration with Lendflow it will allow them to help lenders make better decisions.

“We take a lot of pride in taking this world of data, and providing it to our customers in an efficient way, in a highly structured way, in a trusted way. And ultimately, with really good analytical insights to help them make a high-quality decision,” said Snitkof.

Is Your Big Brand a Bank? You Can Turn it into One

August 16, 2022
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Yuval Brisker
Yuval Brisker, CEO, Alviere

“Any entity that has employees, customers, and fans can create a banking infrastructure that looks just like a bank,” said Yuval Brisker, Co-founder and CEO of Alviere. Founded in 2020 as a spinoff of Brisker’s previous firm, Mezu, Alviere is ringing in the next generation of fintech through its embedded finance solutions.

Brisker wasn’t talking about turning the corner diner into a bank, but rather about providing the infrastructure to enable the largest companies and brands in the US to be one-stop shops for financial services, including banking.

“[It could look] like a bank in every sense,” he said, “FDIC insured, providing a savings account with yield, being able to ultimately give them a credit card, that is not a co-branded credit card, but it’s a single brand…”

Alviere has already spent loads of time dealing with the hard parts, building the tech, but also navigating the regulatory framework to make this concept a reality.

“We are a 100% regulated entity, meaning we’re not piggybacking on a banking license,” Brisker said. “We are actually licensed across the United States in every state that takes a license (except Montana). We are licensed with the federal government in Canada and Quebec and in the English speaking provinces, we’re in the process of completing our licensing in Mexico, and in Europe and in the UK.”

Brisker says this proactive approach is a “big differentiator” against the competition because they really want to provide the full services end-to-end. And that’s a big range given that it spans from bank accounts to payments to cards to cryptocurrency.

Alviere SymbolIn making this possible, partnerships are key. Alviere has multiple bank partners across the globe, the company claims, one among them being Community Federal Savings Bank in the US. Alviere even solidified a deal with Coinbase back in March that enables brands to provide crypto services to their customers all through their own branded technology.

Retail customers might not ever know the name Alviere because they remain in the background, Brisker explained. The brands would, but the customers would only see themselves interfacing with the brand, which is basically the whole point.

“We tell [brands] those customers will never be our customers,” Brisker said. “We’re never going to take over the customer relationship.”

Larger companies have probably entertained this whole idea at some point already, according to Brisker. The potential to capitalize on a loyal customer base by trying to offer them financial services is increasingly being looked at.

“If you’re one of those companies and you also look at the same time how difficult it is to get into this business, both from a regulation, an ecosystem, and a technological point of view, then you’re probably putting that on your back burner and saving this for another day,” he said. Alviere, however, can make this a reality right now.

“We have all the contracts, we have all the relationships, you just need to have one point of contact, one API, one relationship, one contract, and that’s us,” Brisker said. “And we take care of everything else.”

But perhaps it’s all a big bet, because would customers actually use financial services offered through non-bank brands that they’re fans of otherwise? Technically, they already are.

When Alviere launched two years ago, more than 1 out of every 2 Americans had already used a Buy-Now-Pay-Later (BNPL) service, an embedded financial concept that’s taken off around the world. BNPL sales amounted to $100 billion in 2021 in the US alone.

“We believe that there’s a huge opportunity for more traditional beloved and essential brands to become the financial service providers for [people] coming of age,” Brisker said. “And then of course there’s a huge unbanked population that for whatever reason has not entered the financial system here and abroad, which we think that through the affinity with sort of less foreboding, less anxiety, stress-ridden relationships like some people have toward banks that they will be more inclined to come into the financial system through the back door of the system, the front door of the brands they already know and patronize.”

Upstart Has Quietly Entered the Small Business Lending Market

August 9, 2022
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upstart websiteUpstart, once known as the AI-fintech lender for student loans, has gradually added products over time. Today, the company has entered the small business lending market, making good on the plans it announced last year.

Launched shortly before the close of the 2nd quarter, Upstart CEO Dave Girouard said during the earnings call that “We’ve already seen some more than 40 small business loans originated, totaling more than $1 million in principal in just a few weeks.” He further added that the company is “well ahead of schedule” in terms of rolling the program out.

“That team is quickly ironing out operational issues with an eye toward rapidly expanding this product in the coming months and years,” Girouard stated.

Previously, Girouard acknowledged that small business lending is becoming a crowded field.

“While there is no shortage of credit options to business owners, we aim to deliver the zero-latency affordable credit solution that modern businesses require,” he said last year.

There is a lot on the line for Upstart with this new product. Its core consumer lending business experienced a setback in the 2nd quarter when revenues declined on weaker demand for loans originated through its marketplace.

“In the last few months, lenders and institutional credit investors reacted more quickly and abruptly than we anticipated,” Girouard said. “Despite the fact that our bank partners have seen consistently strong credit performance, meaning portfolios performing at or above plan across quarterly cohorts, several of them have paused or reduced originations due to fear about the future of the economy.”

Turning Businesses into Funding Warriors

July 27, 2022
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business warriorsThe downside to offering any small business a loan to grow is that they might not necessarily know how to do the growing part. And so for years, that’s what a Tempe, AZ headquartered company called Business Warrior had been focused on, helping small businesses grow and become more profitable. If businesses needed funding, Business Warrior could certainly provide that too, but the key was in maximizing the value of that.

It all seemed a swell fit until the company became further intrigued by the value proposition of one of its vendors, Alchemy, an “embedded finance” company headquartered in nearby California. deBanked had interviewed Alchemy CEO Timothy Li via Zoom back in August 2020 and the tech company had only grown since then. After reconnecting in April of this year, Li described Alchemy as the “Salesforce of embedded finance.”

Embedded Finance sounds altogether buzz-wordy, but Business Warrior smelled opportunity. In June, Business Warrior announced that it had acquired Alchemy. Since then, Alchemy’s Li has become a warrior and he is working hard to roll out Business Warrior’s next generation of products.

Among the first on the horizon is an Alchemy specialty, giving small businesses the tools to become lenders themselves. It sounds like Buy-Now-Pay-Later, and to an extent it is, but the difference is that a furniture store, doctor’s office, or repair shop would be the one extending the credit, not a faceless third party on Wall Street hoping to win big.

Li explained the advantage of this by using a doctor’s office as an example. “So the creditors, the banks, don’t understand [the customer] just from reading the credit report, but the doctors understand them, they’re local people, they might have seen this patient before,” said Li. “Now [that patient] wants to do a $10,000 procedure and nobody under the sun will underwrite them.” When this happens, the doctor’s office might try to arrange some type of private financing arrangement, “but they don’t have the software to do it,” Li stated.

Business WarriorBusiness Warrior’s software solves this. The platform will be free for the business and Business Warrior will process the customer payments, which is where they’ll earn their revenue, on transactions fees.

In one respect it reduces two risks for the business: (a) A third party BNPL lender dictating future approval, supply, and cost of financing, and (b) credit card companies cutting the lines of their customers that they would otherwise normally use to pay for services. The downside, so to speak, is that the business itself is tasked with being its customers’ creditor.

But ultimately, just like BNPL, such a service is likely to lead to a boost in sales, which is what Business Warrior’s mission had always been from the start.

“This tool is a tool for the small business to do more business,” Li said.

The Alchemy name will remain as far as Li knows, because they still have a lot of customers using its original products. Day to day now, Alchemy is also working with Helix House, an online marketing company that Business Warrior also acquired. They’re all leveraging each other’s resources.

Li concluded the interview by sharing a recent real world experience, he himself going to a dental office to get some work done.

“They have every single imaginable technology, schedule appointments, all the tech,” he said. “They don’t have something that manages payments. It’s either a credit card, cash, or it’s nothing.”

Referring to the financing capabilities that Business Warrior can bring to the table in those very circumstances, “I feel like it should have been there already.”

Merchant Loses Whole EIDL After Attempting to Earn High Yield On It

July 25, 2022
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money bombIt’s a tale of Covid EIDL relief gone wrong. A small business owner in Colorado Springs, CO is begging for his funds back after taking the entire lump sum of his EIDL funds ($525,000) and depositing them with a high-yield non-FDIC insured cryptocurrency tech company. The tech company, Celsius, declared bankruptcy less than two months later, yanking the merchant’s EIDL funds with it. Celsius was not a bank, the arrangement not a true deposit account, and the funds not FDIC-insured.

In a letter submitted by the merchant to the bankruptcy court, he says that he deposited the funds there to “earn an APY to help pay back the 3.9% on the loan…” He further added that he believed his account to be safe because of the site’s Terms of Use.

“The funds in my Celsius Custodial account are not mine, they are the US Governments and I my entire business is secured and backed by these funds,” he wrote. “If they are not returned, my business would go bankrupt, my 15 employees would be let go, and 14 years of my life’s work lost and at the age of 49 years old, I would have to start over with nothing.”

Prior to the bankruptcy, Alex Mashinsky, Celsius’ CEO, oft touted the phrase: “banks are not your friend.”