Rick Morgan, news editor at Bank Innovation  

All right. Hello everyone and welcome to this week’s Weekly Wrap part of the Fintech Unfiltered brand. I am your host for today, Rick Morgan, a news editor of Bank Innovation. And I’m joined by my other hosts, Bianca Chan, also a news editor with Bank Innovation, as well as Arcady Lapiro, founder and CEO of Agora Services. He’s joining us today. He’s part of our sister accelerator INV as part of that accelerator class. We’re very excited to have you with us today. Before we get started, I want to thank our sponsors today Infogroup, LQD finance and Mambu. So thank you to them for sponsoring this. Arcady, before we jump into the news of the week, why don’t you talk a little bit about what Agora Services is.

Arcady Lapiro, founder and CEO of Agora Services

Hi, guys, thank you for having me. Hi, everyone. Thanks for attending. So I’m Arcady CEO and founder of Agora. We are an Atlanta based and myself based in New York. We have been That’s obvious. But we’re coming in in a strange world Pescovitz. So we are going to use complicated words and then I’m going to make it very simple. We are middleware, challenger bank technology platform. What does that mean? That means we have built a complete technology complete stack that can power, any change of bank that we are providing this technology, not to FinTech but to the mass of the market, which are credit unions, community bank and regional bank. So we are part of MasterCard, stop a FinTech portfolio, and we also backed because we are part of the icba FinTech portfolio and exciting to be here. Great.

Rick Morgan  

So let’s launch into the news of the week. I know this story is an exciting one and something that you can talk about as well Arcady but Bianca Why don’t you talk a little bit about the movement we’re seeing with these FinTech SMB lenders like Kabbage BlueVine Getting into checking accounts. Also we had QuickBooks which is not necessarily a lender getting into it as well. But it certainly seems like a lot of these SMB FinTech lenders are trying to create a more full picture relationship with our clients. So what did you learn?

Bianca Chan, news editor at Bank Innovation  

Yeah, so definitely with on the Kabbage side, the launch of their new checking account product, which is essentially supposed to be the glue that kind of brings together all of their other products like cash flow management and insights and funding as well. also spoke with BlueVines Chief Product officer, they blue line actually launched their own checking account product last October, so a little bit ahead of Kabbage. And they’ve also lined up some enhancements there. But it’s also interesting because like you mentioned, QuickBooks is also kind of getting into the space with their checking account product, but also, I think Alibaba and Shopify which are e-commerce marketplaces have also launched products. So it kind of seems like there’s just this influx attention to the SMB banking space, which I definitely think is good because it was kind of highlighted throughout the paycheck protection program that the SMB space was kind of ripe for more banking innovation. But it also kind of complicates the marketplace a little bit. And it’ll be interesting to see which kind of players survive and kind of are able to leverage this opportunity. I mean, have like big banks, TD and Wells Fargo also kind of putting dollars and hours into SME banking with product launches lined up. So, I mean, Arcady, what do you think? What do you think apologies, um, who do you think is more poised to kind of succeed in this space, like the incumbents or the SME FinTech lenders?

Arcady Lapiro

It’s a complicated question is easy. My answer will be easy, but it’s going to be based. So as I mentioned, we are changing Bank technology platform and we bring over legacy code, this code change a bank technology. So there’s a good play actually from a lot of FinTech, where they’re going after the checking, and especially the SMB. Why? One number $370 billion market valuation. That’s, that’s the size of a market. There was a good report from motor book and Cornerstone advisor with Ron Shevlin always good data. So it’s not sure from this FinTech lender for this player to go after this market because they think that’s where the money, let’s do it. The way it is, it’s like, you need three things. You need one, you each have a great product. Two, you need to have a lending facility. And three, you need to provide an access will access. So for me, yes, certain of these FinTech are going to make it maybe not the one we think about maybe a new player that will come. But for me, it’s like there’s a huge play with increments and now the world We think by the mega one, the big one, with my thinking about the credit union and community banks because they’re everywhere. They’re local. They are. They have legitimacy. And that’s what we’re going, we’re coming. So we’re going to provide something for them, but I think it will be later in the discussion.

Rick Morgan  

Interesting, you know, we also wrote a story this week about how a lot of banks are sort of embedding themselves further into chat technology. Voice voice chat bot technology, I spoke with US Bank about their new voice chat bot called Smart Assistant, I spoke with TD I spoke with RBC and got some insight from them about their own voice chat capabilities, and how they make sure that their voice chat bots are more conversational and not so rigid and how they get them to learn and so how an actual person can interact with it and not just have to follow up a very specific script that isn’t very, you know, intuitive or fun to follow. And they spoke to me about how it’s all about making sure these things can learn, you know, layering in technology from certain vendors and then adding in your own business logic on top of that, and then using people who, who know who have been using it their whole life, they talked about how they got a lot of assistance from the blind community to make sure that these tools are easy to use, because you know, they’ve been using voice technology for four decades now. And they talked a little bit about how certain TD mentioned how they bring in Hollywood script writers to make sure that the voice chat bot is you know, an easy to talk to character much like you would hear a TV character speak. Arcady, I know that Agora doesn’t necessarily work in the voice chat space. You guys kind of help launch these digital banking solutions but in your own experience. How do financial institutions keep these digital banking easy to use and intuitive?

Arcady Lapiro

That’s a good question. So did I go? Why is that doing that but in my past, I did that. Two decades ago, I was part of a team when I was living in Europe part of the team and we built from scratch, a digital bank today with culture bank, and we grew it to $20 billion assets. And just to pick a number of exchange, a banker wants to beat him so as to give you an idea about the range. So I was always focused on this kind of thing, new products, new initiative. So first of all these big banks or banks, they need to try different products, they won’t be the one product that will kill the need, there will be iteration. There’s not like one that seems to be have to be products that are omni channel. Some are good for one channel, not the other one they need to find. Basically, one would be based again because I’m a mental advisor of civil FinTech, Israeli American, and Canadian, and one of its FinTech is a conversational chatbot. It’s finn.ai in Canada, and these guys are great. But not a sponsor just mentioning it. So it’s like, but what’s happening, I’m talking about this kind of product conditioner over, it’s like, more or less, it all tends to be the same. So it’s becoming very fast, very homogeneous with. So we think it’s like a, the big one, they can take some kind of lead by putting some kind of key features that they only want, they will have, but down the road, it’s going to be the same. So the question like, How fast can you be deployed, not to the big one that have been given to the traditional players.

Rick Morgan 

Interesting. Another big piece of news was about FinTech funding. The CB Insights report came out, saying that FinTech funding has rebounded This quarter compared to the first quarter, I think was a 17%. quarter over quarter increase. Yeah. And yeah, I know Bianca that you wrote the quarter q1 story our colleague Vaidik Trivedi wrote the q2 story. When you see those numbers, I mean, anything jumped in mind, what do you what do you guys think sort of made that rebound happen?

Bianca Chan 

Yeah, I don’t know. I think it signals maybe a certain sense of recovery of the economy. I think it kind of coincides with certain neighborhoods and cities open back up. Maybe we start to head back to some sense of normalcy. And I think that is kind of reflected in in more investor interest. So I mean, we are what do you think Arcady as a startup founder? How is the funding kind of FinTech space evolved for you in the past year or so?

Arcady Lapiro

So, I’m gonna start up myself. But also, it’s not that i a few ads, but that’s a fact. I’m also a venture partner even from New York for very large FinTech fund in Europe, which is blockchain. So it’s the largest independent one in Europe. So I’m talking I’m not talking about on their behalf. I’m just saying that I’m part of this world also. But right now what I’m going to say it’s not related to them. So a rebound, but that’s normal, because like the economy, before that, it was installed on stuff kind of, and VC have raised a lot, a lot of money the last year, so they’re still sitting in a lot of money. So the economy stuff, kind of get the FinTech stuff now, and I think they’re going to be even an acceleration in the next quarter to come with a very large deal. But also on small deal, but with a huge discount uncertainty. So for me, it’s like a FinTech. There’s going to be next innovation. It’s like it’s going to be very spread. Put out.

Bianca Chan 

Yeah, the discount is a good point. I mean, we kind of saw that in a story that wrote earlier, I think last week or earlier this week about OnDeck’s. acquisition, right, I guess them getting acquired, pretty low price considering the other kind of FinTech acquisitions that we’ve seen in the past year.

Rick Morgan 

Yeah, yeah. I mean, that was a story we wrote last week about OnDecks acquisition for 90 mil. Which, you know, relative to FinTech acquisitions is you know, pretty small when you consider we’ve seen Plaid get acquired for 5.3 billion I think Credit Karma was acquired for seven something billion buy into it. I mean, you know, big big, big acquisitions and you know, OnDeck’s 90 million price day. It just who I mean who knows what necessarily is going to signal but it certainly looks like these. A lot of these lenders that have prioritized, you know, easy access to funding frictionless process, but might not have as much of the sort of strict underwriting and, you know, balance sheet knowledge as a lot of these big banks, they might, they might be in trouble. Well, how do you know that there’s, it’s just it’s not a good sign for the FinTech SMB lending industry. Because OnDeck, you know, was a leader in that space for sure. And, you know, a small price tag like that. It might say, know that these fintechs really prioritize quick frictionless funding in a recession might, might face some trouble. But yeah, not sure one way or the other, but we’ll keep an eye on it for sure. As you know, as the space continues to evolve. So looking ahead next week, Bianca, what do you have on the plate?

Bianca Chan

Yeah, we’re going to be looking at how the Google partnership With I think it was eight or so banks in the US will play out and looking specifically at how that strategy plays into BMO’’s digital growth strategy. BMO Harris is one of the banks signed on to the Google partnership.

Rick Morgan

Yeah, that was some big news this week. That’ll be exciting to see. And then I know I’m working on some news about data aggregators and what they are up to and what new products they’re using, or launching or developing to help financial institutions sort of launch more personalized customer experiences. Arcady What is on Agora Service have on the plate for the next foreseeable future? I know you’ve had some big news yesterday.

Arcady Laprio

I yeah, we had a big news. And it’s kind of related to what we just spoke about FinTech lenders and what Bianca said about the Google which is launching co branded banks with eight banks, which is amazing because for years banks were running away from Google and the gaffer by saying they’re going to step in with To keep our brand our Easter, we have specificity in doing cobranded. So basically banks are saying equation, we need Google sprint, which is like, wait, but you used to be the brand before. So based on that, as I mentioned, we are change a bank. It’s not for me, I have a place. It’s not coming from me. I just want to say it’s not my way it is. So we are changing technology. And basically we would be up use case online banks and we have decided to launch two new products, which fully white label banks targeting two segments. One is teens, which is super. Go and we greenlight Venmo and three of adventure bank launching this fall, and on the other side, the SMB. So we’re launching also change bank on the SMB. So it’s a god scenes in Agra Jr. But we’re not launching as a direct to do a client will have Get to a credit union Community Bank, fully white label. And we’re coming with a band sponsor. And I’m super, super excited that we have decided to choose Sterling National Bank 30 regional bank $30 billion deposits, they will be a big sponsor. And basically what does that mean? service a banks, I’ve chosen Google for the cobranding because they cannot handle the front end or some kind of marketing, we have all this technology. So basically, we built to change the bank, the front end, but also the back end and not just to say something like, Oh, it’s just a website. It’s a real change of bank with existing features like traditional challenger bank, that we’re going to bring additional features that even this change of bank existing, they don’t have it and always based on the underlying technology. So any banks or credit union, they want if they don’t need to work with a colleague as a provider to take one year to deploy something which can be okay. Everybody knows that to take x providers to build within one year something which is once again, is it going to be topped out? day one, we’re bringing everything. So in one month, they give us a logo, we deploy, we deploy that is to change a bank is in the cloud on Amazon. And they can offer to the client. It’s the app onboarding, risk management, virtual plastic, unlimited savings pocket for taxes for the SMB. Just let’s focus on the SMB just like that. Can you think about a venture bank that can provide the online onboarding plus, check out the shortcut bucket for savings, unlimited account for all the employees real time funding for the employees reimbursement in real time? Mobile point of sales retirement plan, obviously is going to be on our platform and a twitch of any community bank. So day one, they can. They can, it sounds like they can resist making a better offering. But notice change, I think.

Rick Morgan  

Interesting. Well, we’ll be. We’ll be excited to keep an eye on that. And we will definitely watch that news develops. Arcady, thank you so much for joining us today. Bianca, thank you for the insight and for joining the call. Yeah, this was a great chat and until next week, we will see you at finainews.com please let us know how we do. You can follow us on our social channels, Twitter and LinkedIn. We will post this as a podcast as well on iTunes and Spotify, Transistor. So yeah, feel free to listen or watch and let us know. We will see you next week. Thanks