Fintech Momentum Accelerates

According to the KPMG’s The Pulse of Fintech 2018, 2018 started with a bang for the fintech market, with overall investment across venture capital (VC), private equity (PE) and mergers and acquisitions (M&A) deals at mid-year already well above 2017’s total investment results. The sharp increase in activity was driven in part by two massive deals: the record-setting $14 billion raise by Ant Financial during Q2’18 and Vantiv’s acquisition of WorldPay in Q1’18 for $12.9 billion.

Across the Asia Pacific, momentum also accelerated, although Australia was at the back of the pack with just 7 deals in each of the first two quarters of 2018.

Notwithstanding the two outlier deals, fintech market activity worldwide gained momentum during the first half of the year as the geographic diversity and reach of fintech investment continued to expand. Brazil, for example, gained some prominence earlier this year as Nubank joined the fintech unicorn club. France, Switzerland, South Korea and Japan also saw significant fintech deals — extending investment well beyond traditional fintech leaders like the US, UK, China and India.

In the more mature fintech areas of payments and lending, dominant market players continued to emerge over the first 6 months of 2018, attracting larger and larger deal sizes. Meanwhile, a broader range of companies focused on newer areas of fintech innovation, such as artificial intelligence (AI) and data analytics, also attracted attention from fintech investors.

Regulatory issues have been a hot button topic for corporate and other fintech investors so far this year, particularly in Europe, as a result of the implementation of Payment Services Directive 2 (PSD2) and General Data Protection Regulation (GDPR). The increasing focus on managing regulatory requirements and compliance contributed to an increase in funding for regtech companies. In just 6 months, VC funding to regtech companies has already exceeded regtech funding raised during all of 2017.

2018 year-to-date funding has already exceeded total annual regtech funding in every year previous except 2016. The US and UK attracted the majority of this funding. At a technology level, regtech investments have been quite varied — from a $25 million raise by UK-based CloudPay — a payments processing platform compliant with specific regulations, to $38 million raised across two funding rounds by US-based Harbor — a blockchain-based compliance platform that tokenizes private securities for trading.

Regtech investment is still relatively immature, with approximately half of total funding raised by seed and early stage companies. In the most mature markets, there have also been a small number of mid-stage investments this year, including Series C raises by CloudPay and Tipalti.

Over the next 12 to 24 months, we expect to see investment in regtech to grow rapidly — particularly in areas like AI, Know your Customer (KYC) and Know your Data (KYD).

Blockchain continued to draw a significant amount of attention from investors in Q1 and Q2’18, although investments typically focused on more experienced companies and consortia looking to obtain additional rounds of funding rather than on new market entrants.

Investor interest in blockchain was not limited to one jurisdiction. Good sized funding rounds were seen during the first half of the year, including $100 million+ rounds to R3 and Circle Internet Finance in the US and $77 million to Ledger in France. The US was particularly active on the blockchain front, with total investment in the first half of the year already exceeding the total seen in 2017.

Asia Pacific.

Ant Financial’s record-shattering $14 billion Series C funding round in Q2’18 lifted Asia’s mid-year fintech investment to a massive $16.8 billion compared to $5.4 billion in all of 2017. The single deal accounted for over half of the $23 billion in VC fintech funding seen globally during the 6-month period.

Excluding this massive outlier deal, Asia still saw strong fintech investment, with quarter-over-quarter increases in overall fintech investment in India, Australia and Singapore from Q1’18 to Q2’18. The number of deals in Asia also rose at each deal stage during both Q1 and Q2’18.

Fintech investment in China strengthened in the first half of 2018 compared to the end of 2017. In addition to Ant Financial’s massive deal, China saw four other $100 million+ megarounds—including $290 million to Dianrong, $160 million to WeCash, $130 million to MeiliJinrong, and $100 million to TiantianPaiche. The majority of banks in China have been expanding their focus to digital and developing transformation strategies. This has led to an increase in B2B focused fintechsable to enable banking transformation. Banks have invested in myriad areas, including blockchain, big data and AI.

Australia.

Australia appears to be a Fintech backwater, with none of the Asia Pacific top 10 deals being done in the country. That said, in the first half of 2018, Australia’s financial regulator provided its first restricted ADI license to a digital bank, Volt Bank14, although more are expected to be issued in the coming quarters. The purpose of the new license is to support digital banks entering the market and to encourage more competition.

 

Trade Ledger wins “Ashurst FinTech Startup of the Year”

Digital banking platform start-up, Trade Ledger, has been named the “Ashurst Fintech Start-up of the Year” after expanding into the UK market and signing up a series of major deals in just one year.

Trade Ledger is the world’s first open digital banking platform that gives banks and other business lenders the ability to assess business lending risk in real time. This will enable these lenders to address the £1.2 trillion of undersupply in trade finance lending globally, while providing high-growth companies with the working capital needed to sustain growth.

The award goes each year to a fintech start-up “that has disrupted the financial services sector with new and innovative services, creating competition and transforming the way we experience financial services”.

Trade Ledger has done this by being the first corporate lending platform in the world to automate the entire credit assessment process, assess SME supply chain data in real-time, and calculate risk down to the individual invoice.

This allows banks and other business lenders to tap into the AU$90 billion of unmet business credit demand in Australia, and US$2.1 trillion globally.

“As the global economy transitions towards smaller, high-growth businesses – our all-important start-up and innovation ecosystem – business lenders have an obligation to learn how to supply working capital desperately needed by these businesses of the future,” said Martin McCann, CEO and Co-Founder of Trade Ledger.

“Australian banks and business lenders also face risks on several fronts. On the one hand, they need to improve both their cost/income ratio and their capital efficiencies within this segment that is traditionally considered as high risk. On the other, they are facing increased competition from technology behemoths such as Amazon, Tencent, and eBay, who are all threatening to use their hordes of data to enter financial services.

“The Trade Ledger platform equips these lenders with the same degree of technological proficiency as these massive tech firms, while arming them with the tools needed to meet our booming innovation ecosystem’s need for credit,” concluded Martin McCann.

This is the third year the FinTech Awards have been running, and the FinTech Awards owner, Glen Frost, was particularly impressed with both the quality and quantity of this year’s applications.

Speaking on the night, Glen Frost said: “The 3rd Annual FinTech Awards recognise and reward the innovators and the risk takers. To be recognised by your peers for your innovation and entrepreneurial spirit will sustain you through the tough times, it will motivate you, and it will show your customers, investors and staff, that you’ve got what it takes.

“I congratulate Martin McCann, and his team at Trade Ledger, on winning the Ashurst FinTech Startup of the Year.”

The keynote guest speaker for the evening was the Hon Scott Morrison, MP, Treasurer, who told the crowd that he was relying on the fintech community to ensure the success of his policy on comprehensive credit reporting.

Tic:Toc Closes $11.5m Funding

Australian fintech Tic:Toc, the world’s only fully digital home loan platform, today announced it has closed its Series B round, raising $11.5M in funding.

The Series B funding, led by Genworth Mortgage Insurance Australia Limited (Genworth Australia) and Blackstone group entity La Trobe Financial, includes both new and existing investors and adds significant depth to the Tic:Toc share register, which also includes Bendigo and Adelaide Bank.

The funding will allow Tic:Toc to further advance the capability of its platform as well as build greater brand awareness. It will also partially fund Tic:Toc ’s pending expansion into offering its automated assessment platform as a service to partners, as well as exploration of select international markets.

Tic:Toc founder and CEO, Anthony Baum, said the successful funding round was a key step forward for the business as it enters a new phase of growth.

“Tic:Toc has seen an overwhelmingly positive response since we launched in July last year. We’re thrilled to have closed a second successful funding round after our initial capital raise in May 2017, and bring on such high calibre institutional shareholders.

“The funds will support the organic growth we are experiencing, but also allow us to further invest in our business for strategic growth.

“We want to relentlessly pursue and embrace new technologies to ensure Tic:Toc remains the radical and smarter way to secure home finance, and this funding allows us to do that” said Baum.

Genworth Australia CEO & Managing Director, Georgette Nicholas said, “We are excited to be part of the Tic:Toc venture which aligns with us looking for innovative ways to provide lenders mortgage insurance.”

Blackstone Portfolio Company La Trobe Financial President and CEO, Greg O’Neill, stated “We’re thrilled to support Tic:Toc as they define a new category in home finance – automated home loan assessment and approval.

“At a time when lending is under scrutiny for outdated practices, Tic:Toc’s unique approach to home finance will benefit the market significantly and is deployable and scalable. We look forward to partnering with Tic:Toc on a range of opportunities.”

Genworth Australia is an ASX listed company and is the leading provider of lenders mortgage insurance in Australia.

La Trobe Financial is part of US investment giant US$450 billion Blackstone Group L.P. based out of New York.

Baum said the Series B funding was also an opportunity to continue to deliver on its promise to customers: “We firmly believe in providing our customers a faster, simpler and more transparent way to get a home loan, and to a larger extent, redefining the home finance landscape on a world stage,” said Baum.

Since its launch, Tic:Toc has amassed a loan portfolio of more than $170 million and received over $1.2 billion in value of submitted home loan applications. It has also grown its team substantially to nearly 50 people, and with new partner and growth opportunities, is looking to grow its team to 200 people by 2020.

The home loans originated by Tic:Toc and backed by Australia’s fifth largest retail bank, Bendigo and Adelaide Bank, are available throughout Australia at tictochomeloans.com; with variable comparison rates from 3.65% for live-in, principal and interest home loans

Can Bank Branches Be Reinvented Digitally?

As we discussed this week, the writing is on the wall for bank branches, and more will be closed in the months ahead as the digital revolution continues. You can read our latest research in our “Quiet Revolution” report.

Bankwest announced the closure of a significant number of branches on the east coast, as discussed in this segment.

But there was a timely article published by McKinsey “A bank branch for the digital age“.

In it, they argue that digital technology could be harnessed within the branch to enhance customer experience there, and that there is still a role for bank real estate.  We are less convinced, as in Australia at least, the digital revolution is well advanced, and brokers provide an alternative face to face sales channel.   But in-branch tech may give branches some extra utility, for a short while.

Far from rendering the bank branch obsolete, digital technology holds the key to the branch of the future.

The bank branch as we know it, with tellers behind windows and bankers huddled in cubicles with desktop computers, needs reinvention. Most customers now carry a bank in their pockets in the form of a smartphone and only visit an actual branch to get cash or, occasionally, advice. Globally, financial institutions now process far more transactions digitally than in branches, and since the financial crisis of the late 2000s, more than 10,000 US bank branches have closed—an average of three a day.1

Despite such systemic changes, branches remain an essential part of banks’ operations and customer-advisory functions. Brick-and-mortar locations are still one of the leading sales channels. Even in digitally advanced European nations, between 30 and 60 percent of customers prefer doing at least some of their banking at branches, according to McKinsey research.

Changing customer behavior and the emergence of new technologies spell not the end of the branch but rather the advent of the “smart branch.” Smart branches use technology to boost sales and improve customer experience significantly. When done right, applying the concept transforms the way a bank branch operates (reduced staffing), significantly lowers real-estate requirements, and alters customer interaction (targeted, relevant sales and service-to-sales programs)—with a resulting 60 to 70 percent improvement in branch effectiveness, as measured by cost savings and increased sales.

Our research shows that although many banks have started to adopt elements of the smart-branch model, most are not extracting the full value potential. Making branches smart is not a matter of simply installing new machines or buying a suite of tablet computers. Smart-branch transformation builds on three pillars: the seamless integration of cutting-edge branch technology, which has become cheaper, more reliable, and more accessible; the adoption of radically new, teller- and desk-free branch formats at every location; and the use of digital technology and advanced analytics to improve the operating model in branches, including personalized, data-driven sales and real-time performance management and skill development.

 

Bankwest To Close Branches As The Digital Revolution Continues

Bankwest has announced it would close selected east coast branches, as it prioritises its investment in digital and broker/third-party offerings to meet changing customer needs.

There should be no surprise, as we foreshadowed the demise of the branch in our most recent edition of our report “The Quiet Revolution“. We said:

Our research shows that consumers have largely migrated into the digital world and have a strong expectation that existing banking services will be delivered via mobile devices and new enhanced services will be extended to them. Even “Digital Luddites”, the least willing to migrate are nevertheless finally moving into the digital domain. Now the gap between expectation and reality is larger than ever.

This is certainly not a cost reduction exercise, although the reduction in branch footprint, which we already see as 10% of outlets have closed in the past 2 years, does offer the opportunity to reduce the running costs of the physical infrastructure.

Bankwest said:

  • 29 branches will close over a three-week period from 17 August, concentrating Bankwest’s east coast footprint into 14 key branches.
  • Impacted customers are being informed of the closures and will receive guidance on alternative banking options available to them by email, letters and store signage.
  • Closures will affect about 200 colleagues and Bankwest is placing a priority on supporting these people over the coming weeks.
  • The move is the latest step in Bankwest’s strategic refocus (announced March 2017) on evolving and improving its offering to retail and small business customers nationwide.

Managing Director Rowan Munchenberg said rapid changes in the digital space required Bankwest to make important decisions on where to invest to deliver great value for customers and grow nationally.

“Many people still value face-to-face interactions, but customers increasingly expect seamless self-service options that allow them to do their banking when and where they choose,” he said.

“We’re seeing a consistent trend of customers choosing mobile banking over in-branch options for their transaction needs, with an 88 per cent rise in app logins over the past three years.

“So, we’re transforming our organisation to respond more rapidly to these changing customer needs by adopting new ways of working and embracing new technologies.

“But we know we can’t match the major banks’ nation-wide footprint and also deliver world class digital services, so we will prioritise digital channels and broker relationships.

“This change does not impact Western Australia, where our strong brand and established footprint enables us to maintain highly competitive branch and digital offerings.”

Mr Munchenberg said the change had been a difficult decision, given a significant number of east coast colleagues would be affected.

“We will work with and support impacted colleagues in the coming weeks, doing what we can to help them identify other opportunities, be they within or outside of the Group,” he said.

“We are writing to affected customers to outline options, such as using Australia Post’s Bank@Post services and, for business customers, taking advantage of CBA branches.

“Ultimately, this change means we can provide better services to more customers in the future.”

Expect more branch closures in the months ahead as the revolution continues….

Consumers’ right to their own data is on its way

Good on the ACCC. Someone has our back!

The consumer data right (CDR), which will enable customers to safely share their data with trusted service providers is a fundamental competition and consumer reform, ACCC Chair Rod Sims said in a speech at the Consumer Policy Research Centre’s Consumer Data Conference in Melbourne today.

The ACCC will have the lead role in turning the concept of a consumer data right into a reality, including rule-making, consumer education and, eventually, enforcement.

“The consumer data right is essentially a data portability right,” Mr Sims said.

“We believe it will enable consumers to actually benefit greatly from the data that businesses already hold about them.”

Using banking, the first industry to be designated under the CDR as an example, Mr Sims explained how existing customer data held by banks can benefit homeowners.

“It is often difficult and costly for borrowers to compare the offers of mortgage providers,” Mr Sims said.

Under the CDR, “banks will make some data, such as customers’ transaction details, available to the customer or the customer’s chosen data recipient.”

“Consumer data rights will reduce the cost to borrowers of discovering and comparing offers,” Mr Sims said.

Mr Sims also stressed the importance of privacy and security in developing the CDR.

The agency will work very closely with the Office of the Australian Information Commissioner on privacy matters.

“Robust privacy protection and information security will be a core feature of the CDR,” Mr Sims said.

The data “can only be accessed by trusted parties who have the customer’s consent to access their data.”

The ACCC has created a dedicated Consumer Data Right Branch and work is already underway with a framework paper on the data rules expected for public consultation in August.

“We will also conduct consultation work with consumers and businesses,” Mr Sims said.

A copy of the speech is available at Consumer data and regulatory reform.

Super funds struggling with shift to digital

Superannuation funds have made some strides in transitioning to digital platforms and online communication, but the process has been challenging for them, according to Investment Trends; via InvestorDaily.

Researcher Investment Trends’ latest Super Fund Member Engagement report, compiled from surveys of the member services and activities of Australia’s largest 44 super funds, has found that super funds are “still learning to manage” their move to the online space.

“Many super funds are making inroads in the development of their digital member service platform, but the move from internal processing systems to real-time member facing applications has been challenging,” said a statement from Investment Trends.

Investment Trends technology analyst Ian Webster said the report found several super funds encountered various online stumbling blocks.

“This year, we observe many funds struggling with the reliability, consistency and quality issues in the real-time digital-based channels used to support and interact with their members,” he said.

“However, super funds are gradually mastering the challenge of managing these channels more effectively, building upon basic content publishing towards digital channels that provide easy access to services and promote two-way engagement with members.”

Among the top 10 super funds ranked according to overall member engagement score, nine were industry funds, with ANZ Smart Choice representing the only retail fund at tenth place.

AustralianSuper took out first place, followed by Sunsuper, HESTA, QSuper, HOSTPLUS, Rest Super, Cbus Super, Vic Super and NGS Super.

Mr Webster pointed to HESTA, Sunsuper and AustralianSuper which had all made developments to their website and were “shining examples of industry funds adopting a ‘member first’ approach”.

“The last 12 months alone saw a host of interesting developments by super funds, including an increase in the number of fund mobile apps, increased social media activity, and direct engagement through online chat and bot-based applications,” he said.

Another Day, Another Data Breach

Reports of data breaches are an increasingly common occurrence. In recent weeks, Ticketmaster, HealthEngine, PageUp and the Tasmanian Electoral Commission have all reported breaches.

It is easy to tune out to what is happening, particularly if it’s not your fault it happened in the first place.

But there are simple steps you can take to minimise the risk of the problem progressing from “identity compromise” to “identity crime”.

In 2012 former FBI Director Robert Mueller famously said:

I am convinced that there are only two types of companies: those that have been hacked and those that will be. And even they are converging into one category: companies that have been hacked and will be hacked again.

The types of personal information compromised might include names, addresses, dates of birth, credit card numbers, email addresses, usernames and passwords.

In some cases, very sensitive details relating to health and sexuality can be stolen.

What’s the worst that can happen?

In most cases, offenders are looking to gain money. But it’s important to differentiate between identity compromise and identity misuse.

Identity compromise is when your personal details are stolen, but no further action is taken. Identity misuse is more serious. That’s when your personal details are not only breached but are then used to perpetrate fraud, theft or other crimes.

Offenders might withdraw money from your accounts, open up new lines of credit or purchase new services in your name, or port your telecommunication services to another carrier. In worst case scenarios, victims of identity crime might be accused of a crime perpetrated by someone else.

The Australian government estimates that 5% of Australians (approximately 970,000 people) will lose money each year through identity crime, costing at least $2.2 billion annually. And it’s not always reported, so that’s likely a conservative estimate.

While millions of people are exposed to identity compromise, far fewer will actually experience identity misuse.

But identity crime can be a devastating and traumatic event. Victims spend an average of 18 hours repairing the damage and seeking to restore their identity.

It can be very difficult and cumbersome for a person to prove that any actions taken were not of their own doing.

How will I know I’ve been hacked?

Many victims of identity misuse do not realise until they start to receive bills for credit cards or services they don’t recognise, or are denied credit for a loan.

The organisations who hold your data often don’t realise they have been compromised for days, weeks or even months.

And when hacks do happen, organisations don’t always tell you upfront. The introduction of mandatory data breach notification laws in Australia is a positive step toward making potential victims aware of a data compromise, giving them the power to take action to protect themselves.

What can I do to keep safe?

Most data breaches will not reveal your entire identity but rather expose partial details. However, motivated offenders can use these details to obtain further information.

These offenders view your personal information as a commodity that can be bought, sold and traded in for financial reward, so it makes sense to protect it in the same way you would your money.

Here are some precautionary measures you can take to reduce the risks:

  • Always use strong and unique passwords. Many of us reuse passwords across multiple platforms, which means that when one is breached, offenders can access multiple accounts. Consider using a password manager.
  • Set up two-factor authentication where possible on all of your accounts.
  • Think about the information that you share and how it could be pieced together to form a holistic picture of you. For example, don’t use your mother’s maiden name as your personal security question if your entire family tree is available on a genealogy website.

And here’s what to do if you think you have been caught up in a data breach:

  • Change passwords on any account that’s been hacked, and on any other account using the same password.
  • Tell the relevant organisation what has happened. For example, if your credit card details have been compromised, you should contact your bank to cancel the card.
  • Report any financial losses to the Australian Cybercrime Online Reporting Network.
  • Check all your financial accounts and consider getting a copy of your credit report via Equifax, D&B or Experian. You can also put an alert on your name to prevent any future losses.
  • Be alert to any phishing emails. Offenders use creative methods to trick you into handing over personal information that helps them build a fuller profile of you.
  • If your email or social media accounts have been compromised, let your contacts know. They might also be targeted by an offender pretending to be you.
  • You can access personalised support at iDcare, the national support centre for identity crime in Australia and New Zealand.

The vast number of data breaches happening in the world makes it easy to tune them out. But it is important to acknowledge the reality of identity compromise. That’s not to say you need to swear off social media and never fill out an online form. Being aware of the risks and how to best to reduce them is an important step toward protecting yourself.

For further information about identity crime you can consult ACORN, Scamwatch, or the Office of the Australian Information Commissioner.

If you are experiencing any distress as a result of identity crime, please contact Lifeline.

Author: Cassandra Cross Senior Lecturer in Criminology, Queensland University of Technology

Credit Card Compare Acquires Singaporean Financial Marketplace Finty

Australia’s largest credit card comparison website, Credit Card Compare
(CCC) announced a seven-figure investment to acquire Singapore’s first rewards-based financial comparison marketplace, Finty.

Credit Card Compare Co-Founder and CEO, David Boyd says that by acquiring Finty, it allows Credit Card Compare to establish its presence in Asia.

“We want to get off the island. Singapore is the natural gateway to the fast-growing ASEAN region where GDP growth outpaces here in Australia. This acquisition is a key plank in our company’s growth strategy,” said David.

“This acquisition allows us to build upon a successful business which dovetails with our own vision for a comparison service that makes financial decisions easier, more rewarding, and, ultimately, more fun.”

Finty Rewards, the innovative cash rewards program unique to Finty in Singapore, pays out cash on a revenue sharing model to customers when they apply for credit cards and personal loans via the Finty website.

Since its launch in April 2017, Finty has made strong inroads into the credit card and personal loan space in Singapore, having developed strong relationships with key banking partners despite operating in the highly competitive financial services comparison space.

“This deal is the culmination of months of work. The Finty team has built a great business in a short time, overcoming challenges and building their brand along the way. They are an extremely dynamic, hard-working, and smart team. We are delighted to be working with them as we expand into Asia.”

“We are excited to work with new banks and brands, and to continue building on our existing relationships with international partners including American Express, HSBC, and Citi.”

Co-Founder and Managing Director of Finty, Kwok Zhong Li, said that by partnering with Credit Card Compare, the Finty brand will be better positioned to thrive in Singapore. Together with Credit Card Compare, we now have more resources, manpower and expertise to thrive in Singapore while making a strong entrance into other countries,” Zhong Li said.

“Finty makes financial decisions simple, enjoyable, and rewarding. It’s the first financial marketplace in Singapore to offer cash rewards based on a revenue sharing model.”

Credit Card Compare is currently the largest comparison site in Australia dedicated to credit cards, where more than two million consumers have used its marketplace in the last 12 months to compare and apply for a credit card.

“At Credit Card Compare, our mission is to connect Australians with credit cards that will improve their financial lives. Comparing cards can be a daunting task, however we have developed a platform that easy to use with the best offers in the market.

Credit Card Compare is Australia’s largest comparison site designed exclusively to help Australian consumers compare, research, and apply for credit cards. We help millions of Australians confidently select the most suitable credit card for their lifestyle and financial needs. Founded in 2008 by brothers David and Andrew Boyd, Credit Card Compare remains independently co-owned by the two original founders to this day. It features data, calculators, tools and reports on 200+ cards from Australia’s largest banks and credit unions, and maintains a prime online ranking and share of voice in one of Australia’s most competitive online fields: comparison sites.

Finty  is Singapore’s first rewards-based financial comparison marketplace that makes financial decisions simple, enjoyable and rewarding. Finty offers cash rewards based on revenue sharing and the online platform uses a proprietary predictive model to determine the value of cash rewards for customers when they apply for a range of credit cards and personal loans from major bank partners.

Kabbage Reaches a New Milestone of $5 Billion of Funding to Small Businesses In US

Very interesting release from Kabbage, highlights the growth of lending to small business online, and outside banking hours. Another example of the digital revolution well underway. 24/7 access rules…!

ATLANTA – June 28, 2018 Kabbage, Inc., a global financial services, technology and data platform serving small businesses, reports its 145,000-plus small business customers accessed over 300,000 loans during non-banking hours, reaching a record total of more than $1 billion in funding. In total, Kabbage has now provided access to more than $5 billion in funding to its customers across America. The non-banking hour analysis illustrates how Kabbage’s fully automated lending solutions remove the age-old hurdle of normal business hours by offering companies 24/7 access to working capital online.

“The findings illuminate the true around-the-clock nature of business owners,” said Kabbage CEO, Rob Frohwein. “While we wish small business owners could reclaim their nights and weekends, we built Kabbage to allow business owners to access funds on schedules convenient to them, not us.”

Economic Impact of $5 Billion

A new report from the Electronics Transactions Association (ETA), in partnership with NDP Analytics, a Washington, D.C.-based economic research firm, finds that for every $1 provided to small businesses via online lending platforms, including Kabbage, results in $3.79 in gross output in local communities. The study provides context to how the new milestone of $5 billion provided through Kabbage has helped to stimulate the U.S. economy.

After-Hours Lending on the Rise

The total number of dollars accessed through Kabbage outside of typical banking hours increased more than 6,000 percent between 2011 and 2018. The growth illustrates small business owners are increasingly comfortable accessing capital online, and they rely on the convenience of managing cash flow needs any time of day, particularly outside of open business hours for most banks. Non-banking hours in this analysis represents the local time between 6 p.m. and 6 a.m. on the weekdays, and the full 48 hours over the weekends.

Weekday vs. Weekend Lending

The majority of after-hour lending (64 percent) was accessed during the work week, totaling $754 million. The remaining 36 percent occurred on Saturdays and Sundays, totaling $429 million. The data is a nod to the dedication of business owners as more than one-third extend their work weeks to handle cash flow needs even on the weekends.

About Kabbage

Kabbage, Inc., headquartered in Atlanta, has pioneered a financial services data and technology platform to provide access to automated funding to small businesses in minutes. Kabbage leverages data generated through business activity such as accounting data, online sales, shipping and dozens of other sources to understand performance and deliver fast, flexible funding in real time. With the largest international network of global-bank partnerships for an online lending platform, Kabbage powers small business lending for large banks, including ING and Santander, across Spain, the U.K., Italy and France and more. Kabbage is funded and backed by leading investors, including SoftBank Group Corp., BlueRun Ventures, Mohr Davidow Ventures, Thomvest Ventures, SoftBank Capital, Reverence Capital Partners, the UPS Strategic Enterprise Fund, ING, Santander InnoVentures, Scotiabank and TCW/Craton. All Kabbage U.S.-based loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC. For more information, please visit www.kabbage.com.