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Peoples Trust Takes Home Three Awards At 2016 PX Payments Awards

Thursday, April 28th, 2016


Peter Read Recognized as Top Industry Leader; Peoples Trust, InComm and National Money Mart Company Win Best Consumer-Funded Prepaid Program for Titanium+® Prepaid MasterCard®

VANCOUVER, British Columbia, April 27, 2016 /PRNewswire/ — Payments eXchange, an organization that brings together leaders from the Gift, Prepaid and Payments industries to educate, collaborate and innovate, has selected Peoples Trust as the ‘Leading Prepaid Organization’ in Canada, and honoured Peoples Card Services’ president, Peter Read, as ‘Industry Person of the Year’. The Company, along with InComm and National Money Mart Company, was also recognized at the annual awards event, for the Titanium+ Prepaid MasterCard®, which took the ‘Best Consumer-Funded Prepaid Program’ category.

Peoples Trust is the leading issuer of Visa® and MasterCard® prepaid cards in Canada. Peter Read has led the prepaid operations of the Company to become the foremost provider of regulatory expertise and market guidance, helping card program managers around the world establish, launch, and grow card programs in Canada. Since joining the Company in 2012, Peter has driven business through the addition of 150 new programs, and nearly a 19 percent increase in dollar volume from 2014.

The Company is also proud to be the issuer of the award-winning Titanium+® program, managed by InComm and offered by National Money Mart Company. Since June 2015, the cardholder base has grown to more than 125,000, fueled by online distribution and through nearly 600 Money Mart® and Insta Cheques® retail locations across Canada.

“We’re thrilled to continue to champion prepaid cards in Canada in support of financial inclusion, and help companies to re-think prepaid in order to bring innovative and new payment technologies to market,” said Peter Read, president of Peoples Card Services. “We’re seeing an unmatched 90 percent reload rate with the Titanium+® card, which is a great example of how easily customers can manage their spending with a prepaid product.”

“When InComm was looking for a financial institution to partner with for the Titanium+® prepaid card, Peoples Card Services stood out as being entrepreneurs, and most importantly, leading subject matter experts in the Canadian prepaid market,” said Bill Turner, VP Financial Services International, InComm. “Our relationship with them has enabled us to proactively adapt to the changing needs of the Canadian consumer.”

“We have seen the demand for tap-and-go payment options, and the superior security of our chip and PIN enabled Titanium+® card, from our customers,” said Money Mart’s Tim Hickey, VP Marketing, North America. “As one of the first reloadable prepaid cards in North America to offer both EMV and contactless, the Titanium+® card provides secure and fast access to commerce for all, making it the number one consumer reloadable prepaid card for financial inclusion in Canada.”

For more information on prepaid and credit card issuing services in Canada, visit


Peoples Trust Expands Canadian Prepaid Issuing Services To SVM

Wednesday, April 27th, 2016

peoples-trust_event-sponsorSMV Logo

Peoples Trust, the leading federally chartered prepaid card issuer in Canada, announced that it has expanded its issuing services to SVM, LP, a global leader in innovative gift card solutions for businesses. As a result of SVM’s recent acquisition of 1to1 Card, SVM can now offer open-loop prepaid cards in Canada, with Peoples Trust as their premier card issuer.

“The integration of 1to1 and SVM expands our breadth and depth of business-to-business payments products, services and expertise in the U.S. and Canada,” said 1to1 Card CEO and President Mark Tepper. “We’re pleased to expand our long-standing partnership with Peoples Trust’s robust issuing infrastructure to reach and enable national prepaid programs.”

Canada is one of the fastest growing prepaid markets in the world, providing great opportunity for U.S. prepaid program providers like SVM to expand north of the border,” said Peter Read, President of Peoples Card Services, a subsidiary of Peoples Trust. “As a longtime partner to 1to1 Cards, we are pleased to support SVM through BIN sponsorship, regulatory expertise, and Canadian market guidance.”

As the leader in the prepaid issuing space, Peoples Trust continually assists new program managers acclimate to the Canadian market, navigate the regulatory environment, and understand how to capture growing market demand. Their extensive insight into the Canadian prepaid market enables program managers to accelerate their market entrance and success.

For Convenience or in an Emergency, CardFree Cash From Fiserv Enables Cardless Access to Cash at the ATM

Monday, April 25th, 2016


  • Consumers can access their funds securely at ATMs without a physical card
  • Tokenized solution greatly reduces risk for consumers and financial institutions
  • CardFree Cash to be available at thousands of ATM locations nationwide

Fiserv, Inc. (NASDAQ: FISV) has announced the launch of CardFree CashSM, ushering in the evolution of access to cash in the digital age by delivering an immediate, cardless way to withdraw funds at thousands of ATM locations nationwide.

Patent-pending and already award-winning CardFree Cash changes the way cardholders access their money – allowing them to withdraw cash from an ATM without a physical card or surcharges. Using a secure token, CardFree Cash withdrawals are completed over the Accel® debit payments network available at thousands of participating ATM locations nationwide.

“Creating intuitive, secure digital solutions that provide real-time access to cash, such as cardless capabilities, helps serve the increasingly fast-paced lives of consumers of all ages,” said Talie Baker, analyst, Retail Banking & Payments, Aite Group. “With CardFree Cash, Fiserv has creatively enhanced a well-known channel, the ATM, to make it work efficiently and conveniently for consumers in more life situations.”

A successful pilot of the product in late 2015 underscored the advantages of CardFree Cash, which include allowing cardholders access to emergency cash if they lose their card (for example while traveling to another city), while waiting for replacement of a lost, stolen or breached card, or for simple convenience when carrying a wallet just isn’t practical, such as when going jogging or visiting the beach.

A future enhancement to the solution will enable person-to-person payments and the capability to collect cash sent from another party at participating ATMs. Customers will be able to provide an access code or PIN to friends or relatives to send and receive cash through Popmoney® personal payment service from Fiserv.

“Consumers live in an increasingly mobile world and want anytime, anywhere access to their money – experiencing financial services the same way they live their lives,” said David Keenan, senior vice president, Network Solutions, Fiserv. “CardFree Cash offers the convenience of the ATM and immediate access to cash without needing a card.”

CardFree Cash has already been recognized for its digital innovation, including being selected by Paybefore as a 2016 Pay Award winner in the Payments Technology Change Agent of the Year category. In addition, CardFree Cash was cited as a leading business technology innovation when Fiserv was recently named to the InformationWeek Elite 100.

In a world that is moving faster than ever before, Fiserv helps clients deliver solutions that are in step with the way people live and work today – financial services at the speed of life. Learn more at

Additional Resources:


Can Tesla’s Batteries be Drained?

Monday, April 25th, 2016

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Tony Chapman
Keynote Speaker, Moderator, Host, Contributor to the Conversation in Mass and New Media

 No car company has ever matched the outstanding success of the Tesla Model 3 launch. Even with a much higher price point, and a narrower customer pool to fish in, in its first two days it approached the numbers achieved by the original Apple I phone launch.

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I have a question for you

Are we witnessing, in real time, a disruption of epic proportions or will the Tesla brand lose its charge?

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History has proven that few brands, even the disruptive ones, can maintain their trajectory. They begin by seducing us with a new approach that engages, enlightens and redefines. Demand outstrips supply, and consumers become frantic even frothing.  Few have ever approached that state of emotion like the Tesla 3.  Consumers placed orders, with deposits, without seeing the product.  Scarcity Marketing and FOMO (Fear of Missing Out) at its very finest.  Kudos. 

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(FOMO Marketing at its best)

There have been many other brands that at one time appeared invincible.  With a dominant share position they could outspend the competition in media, distribution, product innovation and creation.  Journalists became their groupies and they lapped up all the positive earned media.  

Sony Walman did it with portable music and television as did Motorola with their Flip Phone.   Blockbuster, Borders, Blackberry, Yahoo, Sears, Kodak, General Motors, Pan Am Airlines, The Gap, McDonalds were all, at one time, the Sheriff of their marketplace.   Some have disappeared while others are dying from a 1000 paperknife wounds.  

There are no guarantees especially in a marketplace as hostile as this one.  No one has a ‘too big to fail’ card.  Who would have ever bet against Wal-Mart until the Dollar Star and Amazon both bit at its  flanks.   Will Amazon get drained by AliBaba, and will You Tube surrender it’s hold on content to Facebook?   Staying at the top means continuously reinventing your game.

What Tesla has done is teach an old dog, the automotive industry, some new tricks. They view design as much more than a sharp grill; marketing is more than a winding road television ad, technology is an enabler, and they are proving that an organization with purpose trumps an organization focused solely on profits.  

Will the rest of the industry roll over and let Tesla own this new roadway to the consumers head, heart and wallet?   Not a chance.  The question is who will rise to the challenge and try and and drain Tesla’s batteries, or at the very least ride in its draft?

The existing competitors will have to dramatically reimagine and rethink their business. Will they change fast enough?  Are they capable of rendering much of what they know in product design, manufacturing, marketing and distribution obsolete?  History will show that few can or do dismantle what they have spent their lives creating.    Their response will most likely be one of adjacency, a compliment to their core offering which rarely matches a single minded focus.

My bet is that the Tesla’s competition will come from other disruptors.

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Google doesn’t see a driverless car; they see the opportunity that comes from someone not driving who is now free to search or watch YouTube videos.  Apple’s essence is to make technology transparent. They put 1000 songs in my pocket what will be their take on personal transportation? Uber doesn’t believe we need more roads, just fewer cars on them.  

I am curious whether Elon Musk, their founder and visionary behind Tesla can stay focused now the challenge is on scaling the company and delivering products in mass quantities that match the hype.   Speaking of single minded focus he has none.  His self declared goals extend far beyond being an automotive category killer.  He wants to reduce global warming and the risk of human extinction by making life multi-planetary.  He has plans for a high-speed transportation system known as the Hyperloop, and a supersonic jet aircraft with electric fan propulsion. 

These aren’t the dreams of a raving madman.  He is walking the talk as the Founder and Investor of SpaceX;  the Chairman of SolarCity, and co-chairman of OpenAI.   If Steve Jobs were around and redoing his legendary 1997 Ad Elon Musk would make an appearance as one of the ‘crazy ones’.

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I am not picking or predicting a winner.  I am simply relishing and celebrating the contest. Only Wall Street survives by raising a share price by reengineering a balance sheet.  True capitalism depends on the disruptors who reimagine and reinvent, who swing a sledgehammer.  Those who chose to write the history drive innovation, productivity, and our standard of living.  They fuel our marketplace, they force others to raise their game, they put the human brain to test.   

Please feel free to share, comment, agree or disagree.  If you want to connect you can react with me at  Tony Chapman Reactions  or @TonyChapman




Omni-channel – Open – Personal: The New Model for POS

Monday, April 25th, 2016

POS logo

Guest post by Jeffrey Katz, POS/payments visionary and investor.

To say that the POS industry is changing is a true understatement. We’ve come a long way from the National Cash Register Company (NCR) launching the first mechanical cash registers in 1884. The next 100 years that followed marked a slow, steady evolution of POS systems to account for business innovations such as computers, credit cards and barcodes. But this last decade has seen more changes in the POS space than in all years prior.

On the hardware side, we’ve seen the introduction, then proliferation, of new form factors such as mobile devices and tablets, that frankly shook the legacy players out of their slumber. On the software side we’ve seen integrations with back-office systems and front-end consumer applications such that the consumer can now see real-time inventory, order items ahead, pay in the cloud and skip lines all together.  With these shifts, merchants are realizing that they can direct a true 1:1 relationship with the consumer and that they don’t have to be prisoner to antiquated systems.

What makes all of these changes even more interesting is that they are occurring  simultaneously with other huge shifts in different but related industries – payments, CRM, loyalty, big data to name a few. This is all good for the consumer, who is now empowered with more information, control and convenience.

Its also exciting to me as an investor. This type of environment sets the stage perfectly for new, innovative companies to see things differently, to change old ways and introduce new business models. A few of my portfolio companies are great examples.

CARDFREE is an omni-channel commerce platform that enables successful merchant apps such as Dunkin’ Donuts and Taco Bell. Consumers using their mobile apps can order and customize items, pay and simply pick up orders without standing in the traditional POS line. With location services, such as Bluedot, merchants can know when consumers are near so they can fire up and order, present a real-time offer or relevant message.

I have no doubt that the consumer retail experience will be completely different very soon. They will get a better, more personalized experience wherever and whenever they engage with merchants whether its on the store floor or via their mobile device. Merchants will have truly integrated systems giving them smart data and they will not be tethered to hardware, lines, or other physical limitations of a “store”.

The POS landscape is definitely changing. The question for any company in the space is will they help drive the change or be lost in it?

What’s the Truth About Gift Cards?

Monday, April 25th, 2016

SMV Logo

SMV Image 1

There is a lot written about Gift Cards online, and we wanted to get under the skin of the stats and see – do people like gift cards? Are they in decline? And what do the statistics that are out there really show?

Do people leave gift cards unspent?

A survey from the CEB TowerGroup showed that $1 billion on gift cards goes unredeemed annually, however their report also shows that the annual amount of ‘spillage/ breakage’ (Breakage represents the unredeemed portion of gift card sales (Kile & Wall, 2008) and occurs when gift cards are lost, or when consumers elect to partially redeem or never redeem their gift cards) is actually in sharp decline from $7 in every $100 in 2008 to less than $0.75 per $100 in 2015.

When we consider unspent or unloved gifts – we can’t look at the balance sheet alone! We have to consider traditional gifts- the bottles of wine undrunk or regifted, the promotional pens that end up in the bin, or the well intentioned but poorly executed gifts that get put in a cupboard and forgotten about. The truth is, a gift card that is tied to choice will be unlikely to be left to ‘go cold’ – and with the increase in department store e-tailers and retailers with a huge and diverse range of goods – such as Tesco, Amazon, Debenhams and House of Fraser, there’s never been a better time to buy a gift card. SVM Global also offer a range of Preference led services, so whether you gift colleagues or 3rd parties, you can choose a gift card of choice.

Do people want to receive gift cards?

In 2015 gift cards were the most requested holiday gift item in 2015 for the ninth year in a row, according to the National Retail Federation’s Holiday Consumer Spending Survey. Approximately 58.8 percent of consumers said they would like to receive a gift card during the holiday season. The survey polled a huge 7,276 consumers and was conducted by Prosper Insights & Analytics, October 5-13, 2015. (The consumer poll has a margin of error of plus or minus 1.2 percentage points.) With the rise in talk of millennials and smartphones, gift cards are seeing a resurgence. As well as cards that can be used to pay for apps and music, there is also the increased convenience of an eCode that is bring Gift Cards to the forefront of people’s minds.

Do people prefer cash?

A Consumer Report conducted in November 2015 by ORC International (via phone to a nationally representative sample of 1007 adults with a median age of 45 years old); asked people if they would prefer to have cash or a gift card – whilst 57 percent opted for cash – 43% chose a gift card, a difference of opinion of just 144 people, and based around the median age of 45. However, a larger study done by the Incentive Federation in the ‘Survey of Motivation and Incentive Applications’ of 13,661 people consistently indicated that merchandise and travel related incentives were more attractive than cash – and in the merchandise category, gift cards were the most popular items.

Many motivational surveys show time and time again that people don’t recall what they spent cash bonuses on. For example, research firm Wirthlin Worldwide asked 1,010 people how they spent their last cash reward or incentive. Far from being spent on a treat, a new hi-fi, a book, a day out – 58 percent used the cash to either pay bills, add to savings, or worse – they couldn’t even remember what they did with it. In contrast, gift cards provide guilt free shopping – something that we all love. If you really want to treat someone, a gift card is the best way to ensure that the money goes on something memorable and exciting.

Do people spend more than they would normally when they use gift cards – making them a ‘bad choice’?

One of the main cited studies when it sees if people spend more with gift cards is a study called ‘Monopoly Money: The Effect of Payment Coupling and Form on Spending Behavior’. The study split 29 undergrad marketing students (who were given course credit for the study) into groups of 16 (who had a $50 bill) and 12, who had a $50 gift certificate – and gave them a shopping list.

They were asked to imagine they were shopping for groceries from a list comprised of toothbrushes, canned soup, and ketchup. Participants were given a booklet of products and brands available including brand name, variety, size, – sorted by price. The results showed there was no difference in the number of items purchased between the groups – yet the stat of ‘increased spending’ has been used because on average the total amount spent was higher in the gift card group. However – the actual data is a bit drier – for example the cash holders spend $3.81 on soup, gift card holders spent $3.86 – a tiny 5 cent difference.

The truth isn’t found in science – you know it yourself – some people like to spend more on themselves if it feels like a pleasurable treat! A survey of the same run in 2015 of 1000 Christmas shoppers showed that on average, whilst shopping Britons will spend £475 on gifts for others, whilst also spending £84 on treats for themselves! That doesn’t make gift cards a bad gift – if it enables the purchase of something really fantastic, what could be better?

Winners of the 2016 PX Payments Awards

Monday, April 25th, 2016


We congratulate all of this year’s Winners!

Best Consumer-Funded Prepaid Program

 Titanium+ Prepaid MasterCard

Titanium Prepaid MasterCard

 Best Corporate or Government Funded Program

 Hyperwallet’s “Paylution” Global Disbursements Program

Hyperwallet Payvolution

 Best Digital or Mobile Program

 Whole Foods Market Gift Card

Wholefoods Market Gift Card

 Best Mobile Payment App (Wallet, App, Feature or Service)

 CARDFREE Mobile Merchant Commerce Platform

Cardfree Merchant Mobile Platform

 Best Prepaid or Payments Innovation

 Regifting from CashStar, Maritz Motivation Solutions and Amway

Regifting from Cashstar

 Best Loyalty Service, Program or Offering

 Tangerine Money-Back Credit Card

Tangerine Money Back CC

 Best Tech Innovation

 INSTANT Financial’s INSTANT Pay

Instant Pay

 Best Mobile Banking App

 Loadhub™ Payment Source Inc. and Canada Post Corporation



 International Program of the Year

 Vodafone™’s new mobile wallet: Vodafone, PayPal and Carta Worldwide


 Leading Prepaid or Payments Organization

 Peoples Trust Company

Peoples Trust

 Industry Person of the Year – Prepaid & Payments | CANADIAN PAYMENTS HALL OF FAME

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Rob Cameron

Jacqueline Shinfield

Peter Read



Finextra Leadership: Scotiabank co-CIO McNamara on the digital future

Monday, April 18th, 2016

Finextra logo

Scotia Bank logoo

Scotiabank co-chief information officer Kyle McNamara talks to Finextra about how the bank is adapting to the digital future, going mobile, using analytics and working with the local fintech community.

This week Scotiabank CEO Brian Porter updated shareholders on the bank’s strategy. It was a familiar message of digital transformation as customers go mobile and the role of branches evolve.

A 25 year Scotiabank veteran, Porter got the top job in 2013. Shortly after, he took the unusual step of appointing co-CIOs: long-time staffer Kyle McNamara and IBM executive Michael Zerbs.

Explaining the move, McNamara says: “I think he [Porter] recognised that technology was going to fundamentally change banking over the course of the next five to 10 years. And so we need to adapt our tech strategy.”

In his update to shareholders, Porter revealed that the bank is investing C$100 million in upgrading the technology across its branch network, adding things such as iPads. Despite reports that job cuts are also on the way as customers migrate to digital channels, McNamara says that people are still going into branches for advice.

However, there is no doubt that the move to mobile is well underway. Scotiabank is working hard on adding new feature to its services, taking advantage of its ownership of digital-only bank Tangerine to experiment fast.

McNamara says that when Scotiabank first bought Tangerine in 2012 it kept its subsidiary at arm’s length. But that has changed in recent months, with Tangerine CIO Charaka Kithulegoda reporting to McNamara, who says that the subsidiary is well suited to fast prototyping and piloting, trying out things in areas such as biometrics that would be difficult for the larger organisation.

That’s not to say that Scotiabank is resistant to adopting a more startup-style approach itself. The bank is adding at least 350 tech staff to a new ‘Digital Factory’ in downtown Toronto focused on customer experience projects.

Here, a fail-fast approach dominates, with different parts of the business putting in requests that are then triaged, typically in under 16 weeks. McNamara describes a process where in the first 10 days a collection of people from the bank come together to walk through how a particular service (such as client onboarding) is currently done and how it can be improved. Then customer focus groups are brought in before the digital factory team gets to work.

“And then we use an agile methodology: we estimate the work, we break into block, we prioritise the stories, we estimate how long each story is, how much work it will be, we develop in one or two weeks sprints depending on the project and that iterates through and then we try to do the major releases in 12 to 16 week increments,” says McNamara.

A different sort of relationship has been developed with Queen’s University, where the bank has pumped C$2.2 million into a new customer analytics centre, hoping to harness the power of big data. 

Scotiabank has been busy building an enterprise data lake to help it meet upcoming regulations. But McNamara says that it is also providing a big boost for customer services. 

“So now we have that and we’re also capturing additional info, better customer interactions, the loyalty programmes that our customers participate in, the broad definition of customer interactions. So we’re capturing a lot of the info about – in the online and mobile space – how they interact with us. So we’re getting a holistic picture of the client.

“And that’s why I feel we’re on a very good path here and I can see the path were on. And that’s why I say that come 2017/18 I can see the pipeline of analytics use cases that we’re launching now and as they gain momentum I think that 2017 and 2018 will be the year you’ll start to see the banks that are doing this separate from the banks that haven’t.”

Scotiabank is also working hard to strengthen its ties with the fintech community. The Digital Factory will include an innovation hub where startups will be invited to demonstrate their products, with the best chosen for pilots with the bank.

Earlier this year the bank ran its first hackathon, which saw 24 teams compete to create ways to help people manage debt. McNamara says that some “excellent concepts” came out of the event and that he plans to “continue the conversation” with the top three efforts, while more hackathons are in the pipeline.

Some of this outreach could lead to investments. Last year Scotiabank joined Santander InnoVentures and ING in a $135 million funding round in automated lending platform Kabbage and McNamara says “the awareness and willingness to partner with startups has never been as high as it is now”.

This goes right to the top and Porter, who recently told his CIO: “I want to see more, give me more opportunities to see the startups we’re working with.”

Finextra Leadership: Tangerine’s direct banking pioneer

Monday, April 18th, 2016

Finextra logo


As chief information officer at Canadian direct bank Tangerine, Charaka Kithulegoda is at the forefront of the drive to take financial services mobile. He talks to Finextra about how technology is changing the banking landscape.


Tangerine was founded in 1997 as ING Direct, the first direct banking outpost established by its Dutch parent. Renamed in 2012 following an acquisition by Scotiabank, by the end of 2013 the firm claimed over 1.8 million customers and held close to $40 billion in total assets.

Initially serving clients over the phone, Tangerine quickly became a primarily Internet-based provider, and is now in the midst of a second delivery revolution as customers increasingly manage their finances through their mobile phones.

Overseeing the transition is CIO Kithulegoda, a 16 year Tangerine veteran who says that adoption of mobile is happening far faster than the earlier online migration. With this in mind, the bank has taken an iterative approach to its mobile app, regularly updating it since its first appearance in 2010.

Five years ago customers may have been happy to bank on a mobile website but, says Kithulegoda, today people expect far more from the handsets and the providers – in all industries – that deliver services through them. “So to do that, the only way to do that, is to watch how our clients behave, to listen to what our clients want, and to iterate.”

One area where client expectations are in flux is security. Last autumn Tangerine was an early adopter of Apple’s Touch ID fingerprint technology, using it to let customers access the Orange Snapshot balance checking feature. Touch ID will soon be coming to the full Tangerine app but Kithulegoda is clear that this will be in addition to, not instead of, a passcode.

This is a more cautious approach than that taken by UK giant RBS, which has just announced that customers can login with only their fingerprint. Kithulegoda says that the reticence to ditch the passcode is more to do with customer expectations than security, with Tangerine reluctant to push users too far too fast. However, he adds: “I think that in some point in time we should give our customers the option of saying ‘use only biometrics’.”

Another area in which Tangerine is experimenting is voice control. For Kithulegoda voice control’s real advantage over touch is in the field of wearables such as smartwatches, where there is little space for touch-based commands.

But, the bank is discovering through its pilot, voice throws up a host of challenges. “I’ll give you an example of something we saw, its funny but its true,” says Kithulegoda. “So we said that…if you want to confirm a transaction or cancel a transaction, the way that people would do it is that we’d ask a question: ‘Do you want to proceed with the transfer?’ and you’d say ‘yes’ or ‘no’ right?”

Unfortunately, living up to the Canadian stereotype for politeness, Tangerine found that “a large number of our clients in the pilot are saying thankyou.”

Tangerine is also looking into the potential of video conferencing as a way to bring the human touch to digital banking, although Kithulegoda is unconvinced by the attempts of many banks, such as BofA, to integrate the technology into ATMs.

“Why are we trying to build this technology into something that’s from the 70s when all of us carry at least one single device or multiple devices that can deliver that same interaction experience very seamlessly from within our pocket from wherever we want?” he asks. Not only is the ATM not the best delivery mechanism for video conferencing for the customer using it, it also inconveniences other users, suggests Kithulegoda: “I personally would be fairly annoyed if I got to stand in line waiting for someone to have a short conversation.”

Nevertheless, Tangerine is actually piloting video conferencing at its own physical locations. The bank has recently been taking a pop-up site (it refuses to call it a branch) around Toronto, using it as a way to attract new customers, with staff helping people to sign up to accounts on mobile devices and then handing over to specialists in areas such as mortgages over video links.

Despite defining itself as a direct bank, Tangerine has several ‘cafes’ in major Canadian cities. However, like the pop-up, these are about customer acquisition and getting the brand out there, rather than normal branch-style services, says Kithulegoda.

“So you can walk into any of our cafes and say ‘What is this Tangerine thing, what is it?’ They find out what we are about, we’ve got some great people working, enthusiastic. They’ll tell you what Tangerine is all about. The person is excited, says ‘OK I want to become a client’. The next step is very very different to a conventional branch. We walk you up to an iPad and say please scan your drivers license and take five minutes, answer a couple of questions and you will be able to become a client.

“We actually facilitate the transaction, we don’t do the transaction. So again we introduce people, even new customers, to the use of technology and how easy it is to deal with us using technology from step one. So seamlessly you can walk into one of our cafes and within five to 10 minutes walk out having your debit card and being a client, all using technology.”

The Ongoing Debate: Are FinTech Startups Really Disrupting Banks?

Monday, April 18th, 2016

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  A Goldman Sachs (yes, the ones being disrupted) research report in early 2015 estimated that a part of the traditional financial services’ revenue ($4.7 trillion out of $13.7 trillion) is at risk of being displaced by new technology-enabled entrants which include FinTech players from lending, wealth management, payments and others. But we have a debate going on wherein some entities (basically big media houses agreeing with each other) think that this disruption is exaggerated and some think it is more real than it looks like. And in this debate about “breaking banks,” some players are old timers—such as Brett King who said in an interview recently, “I just don’t see any scenario where we don’t lose the vast majority of banks globally under $1 billion in assets unless they’re a pure-play digital bank. Certainly, we’ll see massive consolidation in community banking in the US. All because of digital disruption.” 

I think the threat of FinTech is more real than ever before for banks. And the reason for that is not only what FinTech startups are building (as a threat) and consumers are loving but the fact that banks have ignored consumer demands for too long and their legacy infrastructure needs tremendous work to be fixed. A handful of banks in each FinTech hub have responded to the Fintech challenge by doing one of the following: work with startups by having some sort of an engagement model (startup contests, hackathons, incubators, accelerators and investments) but the work on core transformation, reimagining banking services and competing truly on digital front is slow or not enough. Consumer finance, mortgages, small-business lending, retail payments, fund transfer and wealth management are the key subsegments which are expected to face a big attack from the innovators. This article looks at the key highlights areas which are being disrupted by FinTech.


Retail Banking:

The effect of disruption is very high across the banking sub-sectors. However, retail banking has been hit the worst by the emergence of FinTech. Retail banking segments such as lending, remittances and payments have undergone disruptions while the infrastructure supporting retail banking such as bank branches and ATMs are also undergoing a transformation, thanks to the millennials’ habit of using mobile devices. It is considered just a matter of time till the rising cost of operating branches and improving online sales will lead to the closure of more and more bank branches. ATM and mobile devices are expected to become the key channels for consumer engagement. Banks which are not digital are also at the risk of losing customer relationships. Furthermore, on the products side, emerging FinTechs such as Lending Club, Prosper, Abra, Apple Pay, Android Pay among others are expected to eat a significant portion of revenues. According to an estimate, close to 20 to 30% of the retail banking revenues will be at risk from FinTech disruptors by 2020. Over 1,500 and 2,300 investment deals in the retail banking/lending and payments segments respectively have taken place since the last 10 years. About $17 billion in loans were provided in the US through P2P platforms in the year 2015 while the mobile payments in the US were worth $60 billion in 2015.

Corporate Banking:

According to LTP, though some banks have established a digital presence, the banks are underinvested when it comes to corporate banking. The disintermediation of corporate banking seems to have a lasting effect on the bank. When it comes to working capital management and SME loans, firms such as CAN Capital, On-deck, MarketInvoice, Fundbox, PayPal, Square, etc. have gained significant traction. Together, these firms have lent more than US$ 12 billion in SME credit in 2015. Business payments is another major disruption in this space. Last year, KeyCorp Bank invested in several payments-related startups post understanding that commercial clients also wanted their payments process streamlined. Blockchain and IoT solutions to improve trade finance have also gained some traction in the market. Recently, Barclays partnered with Wave, a blockchain-based trade finance startup in a bid to help business clients reduce costs associated with supply chain management. Over $12 billion in loans were financed through online lending platforms in the US in 2015. A study by BCG on shadow banking suggested that roughly 25% of US middle-market lending is now being provided by various shadow banking players.

Investment Banking:

The investment banking sector has undergone a sea change in the last couple of years primarily because of the advent of FinTech such as robo-advisors, social trading platforms, market funding platforms, and market data and sentimental analysis service providers. In the social trading space, startups such as ZuluTrade and Stocktwits have seen good traction. These platforms act as a communication platform for the investing community which uses information from tweets as cues for trading. The market-funding platforms are occupied by small and large crowdfunding firms such as Kabbage, EquityNet, Crowdcube, Fundable, Kickstarter, etc. The market data platforms are occupied by firms that mostly use sentimental analysis and big data analytics to track the market movement. Some of these firms are B2B firms while others provide direct services to end customers. Companies such as Heckyl Technologies, SumZero, Contix and Kensho offer services such as the ones listed above. Assets managed by robo-advisors are estimated to increase by 68% annually and to about $2.2 trillion in five years. The robo-advisor space includes online platforms such as Wealthfront, Betterment, AssetBuilder, Financial Guard, FutureAdvisor, Jemstep, Personal Capital and SigFig. These firms develop automated investment portfolios and recommendations for their individual clients. Market penetration of robo-advisors has been estimated at $20 billion in 2015. More than 1,600 investment deals in the securities/capital market and wealth management space have taken place in the last 10 years while roughly 8–10% of the deals in the US by value happen in this segment.


InsurTech could happen fast because of the rising consumer demand. The sector is witnessing tremendous support from global investors. Around $4.1 billion has been invested in InsurTech in the last five years. There are around 700–800 InsurTech firms globally which are addressing the requirements of the $4.5-trillion insurance industry but the state of InsurTech is at a stage of infancy. There were 184 deals in the InsurTech segment in 2014 and 2015 with the value of the deals was totaling at $3,391 million. Average deal values in 2014 and 2015 were $9.9 million and $24.3 million respectively.

Use of data analytics is a key differentiating factor between the incumbents and the disruptors. Big data analytics play a major role in getting 360-degree insights of the customer, forecasting their needs, providing educational training and assessing their risk parameters to get them best quotes. For example, Shift Technology leverages data science to automatically detect networks of fraudsters in insurance and e-commerce. The solution is integrated into the big data platform and is provided in a SaaS model. Likewise, smart contracts powered by blockchain could provide customers and insurers with the means to manage claims in a transparent, responsive and irrefutable manner. Startups such as Everledger, Blockstream and Tierion are working in this direction. Everledger provides an immutable ledger for diamond identification and transaction verification for various stakeholders, from insurance companies to claimants and law enforcement agencies.

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