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Motive Insights - June 2022 Industry Roundup

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July 3 · Issue #303 · View online
Motive Insights
NEWS FROM THE MONTH OF JUNE
What our team of Investors, Operators and Innovators have been up to over the last month
We recently invested in Backbase, a leader in the Engagement Banking category. Founded in 2003, this nearly 20-year-old business closed its Series A round (!) this month, welcoming Motive Partners as its first ever institutional investor. We are excited about the Engagement Banking space and Backbase’s opportunity – read further to find out why.
Engagement Banking Leader Backbase Raises €120 Million from Motive Partners
Digital transformation has been at the top of banks’ agendas since the 2007-8 financial crisis as we know. And in a post-pandemic world, it is even higher on the priority list. Over the last few years, banks have had it tough. Faced with a post-2008 reputational and trust crisis, hawkish regulation, extreme competition from leaner and digitally nimble FinTechs and evolving customer behaviors and demands, banks have had to think fast on their feet to retain market share. Drawing on their competitive edge – data and scale – banks have begun to put the customer at the center of their decision making. But decisions are one thing… and execution is another.
Customers want more and they want it now. Instant gratification, a seamless digital experience, the utmost convenience, and a tailored, personalized banking service have become the bare minimum for customers. Growth in digital banking has accelerated as a result; since the start of the pandemic, the number of digital banking users increased by 23% as customers look for the latest and greatest technology in every digital banking experience. With that, omni-channel banking and customer self-service has become the “true north” of the Banking and Payments sector, which has forced banks to shift away from legacy in-branch service offerings towards mobile and ATM. New technology investment as a percentage of bank IT spend has increased by more than 20% from 2013-2022 globally as banks try to adapt. But they are still struggling to keep up. Building in-house solutions is time consuming and expensive. That’s where digital banking solution providers like Backbase come in.
Engagement banking puts the customer at the center of the digital banking experience with effective targeting allowing the customer to select products that work for them in the long term. As an omnichannel digital software solution, Backbase helps banks to bring together data and functionality from their core banking systems as well as from external FinTech providers to translate it into a seamless customer experience, improving the longevity of the bank-customer relationship. Backbase leverages data to drive personalization that results in a scalable technology platform with a high level of customization and reliability. This, coupled with a strong customer success team and expert subject matter knowledge, enables Backbase to stand out relative to its peers. Currently serving 150 customers globally and generating over €200 million in revenue, Backbase has a track record of strong organic growth and a clear runway for further expansion.
So… this sounds great and all, but what’s next? We believe the future opportunity lies in not only being able to provide a platform that delivers the modern technology that customers require, but also improving the efficiency of existing underlying IT infrastructure. In addition, data capabilities and an ability to continue to scale through partnerships with other FinTechs (Banking as a Service et al.!) will be critical differentiators for banks to stay ahead in what is rapidly becoming an overcrowded market. Backbase is well positioned to capture this market evolution given its extensive distribution network, which acts as a hub for customers to access complementary solutions and the introduction of their “Banking as a Platform” offering. We look forward to partnering with Backbase, as we embark on an exciting road ahead. Time to execute!
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Other Motive News
We closed on our acquisition of BetaNXT
On Friday, we were pleased to announce the completion of the acquisition of wealth management software platform BETA+ from LSEG (London Stock Exchange Group). In connection with the closing, the company will operate as BetaNXT, reflecting its evolved strategic vision to create the interconnected wealth management experience of the future.
BetaNXT will be led by Motive Industry Partner Stephen C. Daffron as Chairman and Chief Executive Officer. He is joined by Motive Industry Partner Caroline O'Connell as Chief Administrative Officer, Don Henderson as Chief Technology Officer, Tim Rutka as President of BETA, and Michael Pass as President of Maxit and Digital Investor.
Additionally, Motive Partners and Clearlake Capital Group have formed a long-term strategic partnership with LSEG, through which LSEG will work hand in hand with BetaNXT and the Sponsors’ wealth management portfolio companies, providing content, data, and tools.
We look forward to supporting BetaNXT’s next phase of growth, focused on solving their customers’ most daunting integration challenges and offering modern, frictionless solutions that anticipate their changing needs.
To stay tuned in to the BetaNXT journey, follow the LinkedIn page here.
We welcomed the Belgian Economic Mission to the USA in New York
With Motive Founder & Managing Partner Rob Heyvaert‘s Belgian roots, we were delighted to welcome the Belgian Economic Mission to the USA in New York, the second leg of their mission. During the Princely Trade Mission, Belgian companies presented themselves and explored market opportunities with their American counterparts. To kick-off the #BEmissionUSA in New York, Flemish Minister-President Jan Jambon and Rob Heyvaert, spoke at an opening event. Rob welcomed attendees and panelists for a discussion that Miguel Tejeda, an investment professional at Motive, also featured on, discussing how to scale companies in the US.
Rob Heyvaert (Founder & Managing Partner)
Rob Heyvaert (Founder & Managing Partner)
Miguel Tejeda (Vice President)
Miguel Tejeda (Vice President)
We welcomed Caroline O'Connell as a Motive Industry Partner
We were delighted to welcome Caroline O'Connell to our team of investors, operators and innovators as an Industry Partner, bringing broad operational expertise across financial services, wealth management and the insurance sector to further enhance our portfolio companies’ growth.
Caroline O'Connell (Industry Partner)
Caroline O'Connell (Industry Partner)
PORTFOLIO COMPANY NEWS
What our portfolio companies have been up to over the last month
  • CAIS announced the latest strategic investment from Hamilton Lane, the leading private markets investment management firm with more than $901 billion in assets under management and supervision. The new capital will further CAIS’s mission to modernize how the independent advisor community can access, and learn about, alternative investments, while also connecting asset managers with the multi-trillion-dollar private wealth channel.
  • CAIS and BNY Mellon | Pershing announced a series of updates including SSO, enhanced Document APIs, and automated Order Entry to the CAIS platform. New features will help enhance alternative investment product access and order processes for broker dealers and financial advisors.
  • As public market performances falter, more financial advisors have told CAIS that they want access to the alternative investments landscape. Learn more about the financial advisor community’s sentiment towards modern portfolios in our latest survey from the Morningstar Investment Conference.
  • FNZ was delighted to announce its investment in Bondsmith, helping to make active cash management more accessible to more people. This investment and the integration of Bondsmith’s solutions into FNZ’s global wealth management platform, will further improve functionality and customer choice as we accelerate our mission of opening up wealth.
  • Is your wealth management business struggling to overcome complexity and to connect different FinTech and RegTech tools and workflows into an efficient, unified practice? You are not alone. Read FNZ’s blog to learn why HansPeter Wolf, FNZ’s CTO, says best-of-breed tech may not be best for business and how a digital full-service model can alleviate complexity and cost.
  • Forge’s June Private Market Update is officially here! The biggest takeaway? In the private markets early is, indeed, everything.
  • InvestCloud was recognized for having the Best Artificial Application and Best Innovation Solution at the WealthBriefingAsia Awards 2022InvestCloud, Inc.’s Sam Hiley and Massinissa Nait-Ladjemil were at the awards gala and had a great time connecting with industry peers and friends in person - which was refreshing!
  • Yaela Shamberg, Co-Founder & Chief Product Officer, InvestCloud, Inc. shed light on key principles and frameworks to build technology that truly speaks to clients. Read her article here on how wealth firms can bridge the digital engagement gap.
  • We were delighted to hear that Trumid’s Founder and Co-CEO, Ronnie Mateo, has been recognized as one of the top 40 Innovators in Financial Markets in the inaugural TabbFORUM 40! Congratulations, Ronnie!
  • Trumid was honored to be named to Forbes Fintech 50 list for the 5th time. ‘Recognizing America’s most innovative and influential fintech startups.’ Check it out here.
  • Trumid Co-CEO and President Michael Sobel joined “The Changing Fixed Income Electronic Trading Environment Panel,” at the Piper Sandler Global Exchange & FinTech Conference. Watch the replay here.
  • We were delighted to announce the arrival of Lawrence Miller as Chief Technology Officer of Wilshire and a member of Wilshire‘s Executive Committee. Welcome, Lawrence!
  • Interested in transitioning into less carbon-intensive portfolios? Wilshire was honoured to receive a 2022 ESG Marketing & Communication Award from The Gramercy Institute for its “Climate Taker to Climate Maker” video series. The Gramercy Institute’s awards showcase excellence in marketing and communications of ESG-oriented financial products and services. Wilshire’s educational series explains how to align an investment portfolio to an ESG-related mission in just four steps.
  • Mark Makepeace, CEO of Wilshire, made a guest appearance on “Bloomberg Markets AM” segment with co-hosts Kriti Gupta and Paul Sweeney. If you missed it, tune in here.
INDUSTRY NEWS
What we found interesting this month
Digital banking should be the cornerstone of every small business’ tech strategy
U.S. banks’ capital, liquidity and earnings have positioned them to weather the storm
After a golden decade, fintech faces its first true test
Deal by MFS Africa is further evolution of continent’s rapidly growing fintech scene
Bitcoin just had its worst month on record
Klarna Discussing Valuation Cut to $6 Billion From $45.6 Billion
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