Top Stories at Finovate Spring 2011

The increasingly popular Finovate Conference Series just completed its spring event in San Francisco.

64 very interesting companies presented brief technology/product demos to a large audience of financial services media, analysts, investors, potential partners, competitors, and other industry participants.

All of the presenting companies are focused on technology innovation in finance, and most of the companies are young.

Below is a recap of some of the more interesting stories at the conference. There are five companies/stories in each category. The categories are intended to represent the perspectives of what could be considered core audience segments for the presenting companies. In other words, each category lists the companies that might be most interesting to:

Consumers
Partners
Investors
Businesses

Consumers

1) PayNearMe

Enabling remote cash payments – pay your phone or power bill at your local 7-Eleven with cash
Lots and lots of people use cash exclusively—the ability to use this preferred payment method without having to be physically present is important
Could be very interesting with a couple more partnerships like 7-Eleven
Great demo

2) Dwolla

Use cash for web-based/mobile transactions
Inexpensive and potentially very disruptive/progressive
Very interesting data aggregation/visualization dashboard
Compelling CEO

3) Bills.com

With Debt Coach, they appear (genuinely) to be on a mission to shed the much needed light-of-day on the murky world of individual debt solutions—a market that seems to leverage information asymmetries at the expense of the consumer
Great execution—data aggregation, analytics/decision engine and simple UI
Solid demo and clear, pro-consumer mission

4) Wikinvest

Demo and product launch/re-branding (Sigfig.com) are strongly pro-consumer
Retail investors—particularly mass market/non-high net worth—benefit from knowing: a) what they are actually paying in fees/expenses; b) having access to information about what they are paying for, and; c) having information that presents alternatives that may offer greater value
Hard to think of a company that is currently doing more the empower retail investors through technology

5) Hello Wallet

Sophisticated data visualization and AI/simulation technology in the application
Powerful personal finance analytics in a clean, simple UI
First time available directly to consumers (previously distributed exclusively through employers)

Partners

1) TILE Financial

Any financial advisor knows how difficult it can be to retain clients when wealth transfers to the next generation, and retaining “what you already have” can be a much more efficient use of time and resources than new business development
It’s a no-brainer for financial advisors to consider TILE’s offering as a way to connect with, engage and retain the younger generation

2) Adobe

A long and proven track record of designing elegant products which provide a great user experience
The dynamic landing page in the demo was pretty nice
The CEM suite brings together several solutions that work on any platform that might be of interest to FIs—hard to ignore if you are leading development at a financial institution

3) BrainTree

Ability to outsource PCI compliance and credit card storage
"Transparent redirect API” allows payment without redirect to third party site and no credit card data flowing through merchant’s servers (data goes directly from browser to Braintree’s servers)
1.3 million transactions during one day in January
One of the clearest and most effective presentations

4) Trusted ID

Identity protection offerings are close to ubiquitous in financial institutions now
Good time for a free/freemium model like IDSafe
Potential increased revenue for FIs that are subsidizing, and increased conversion/adoption for FIs that are passing along costs to consumers

5) Bill Float

On-the-fly micro loans for consumers—seems similar to Kabbage but for consumers
Partner institutions can bake the offering into their payment platform
I can think of many interesting partners/applications in healthcare where receivables from co-payments/out-of-pocket spend are a nightmare

Investors

1) BrainTree

Braintree is apparently entirely boot-strapped and the company is firing on all cylinders (impressive client list and $10 million in revenue in 4^th year of operation)
A leading company serving a space that is exploding

2) Gold Bullion International

At a time when virtually all developed countries appear to be dead-set on currency debasement, a platform that allows retail investors to buy and store physical precious metals is, to say the least, timely
A strong team and what appears to be solid early execution
Likely (or should be) on the radar of the corporate development group of every major wealth manager in the country

3) Dwolla

Early and a company that could have a big impact
CEO seems to be on a mission
Independent thinking and outside (Iowa-based) of conventional influences

4) TILE Financial

CEO has great distribution relationships and deep domain knowledge/experience
Early in a non-crowded space with (to my knowledge) a unique offering that addresses a trillion dollar problem

5) PayNearMe

While not exactly under-the-radar, meaningful traction in the cash market would make the company a very attractive acquisition target in the eyes of large, resource-rich buyers

Businesses

1) Xero

Cloud-based accounting software for small/medium businesses—product features that are innovative and accessible/simple
5,000 bank feeds and ability to SMBs to (simply) generate financial statements
Good demo and significant industry/customer traction

2) Kabbage

Small businesses—specifically online merchants—have near instantaneous access to working capital
Compare this process/time-frame to a tradition bank or SBA loan process
The new “profile building” feature offers the potential for better terms in exchange for more information

3) Lendio

Matching technology for business loans
Addressing a large, fragmented market and streamlining a good portion of what can be a prohibitively time-consuming process for parties on both sides of the exchange
Great appeal for small/medium businesses

4) Kony

Any large company needs to be developing mobile applications
Developing applications that function across multiple devices/platforms is probably a nightmare, so a development platform that addresses current and future compatibility issues should prove very attractive

5) Expensify