How Many of These Microsoft Initiatives in FinTech Did You Know About?

In previous articles, we have reviewed the ways in which the financial industry giants are joining hands with FinTech to keep up with the pace of innovation in the market and stay relevant. However, banks are not the only ones to feel the urge of paying closer attention to FinTech. Microsoft recently announced in its official blog that it has acquired Mobile Data Lab, creator of the popular MileIQ app and an innovator in intelligent productivity solutions for mobile professionals.

Addressing the market need and describing the reasoning behind the acquisition, Microsoft shared in the blog that in the US alone, there are over 55 million small business employees, entrepreneurs and other mobile professionals. This self-directed workforce, as Mobile Data Labs calls them, is always seeking ways to reduce time and effort spent on administrative chores like mileage, expenses, time tracking and reimbursement. Mobile Data Lab offers a solution – MileIQ, the app takes advantage of sensors in modern mobile devices to automatically and contextually capture, log and calculate business miles, allowing users to confidently claim tax deductions. MileIQ is used by over 1 million mobile professionals and has been the top-grossing finance app in the iTunes store for 20 months straight.

Mobile Data Lab is the most recent example of Microsoft Corp’s engagement in FinTech. However, the company in recent years has taken other steps to get involved in the hot sector with some interesting examples.

A recent one is Microsoft's collaboration with Deutsche Bank to launch FinTech Labs in Berlin in Q4 2015 called Deutsche Bank labs, where Microsoft will be providing technology experience and resources. The lab in Berlin is a part of a larger five-year plan called Strategy 2020 to spend $1.07 billion in digital initiatives by the bank, with labs to be opened in three locations; Berlin, Silicon Valley and London.

One of the goals of the lab is to evaluate over 500 startups a year. Microsoft, as a partner of the lab, will be part of the group that evaluates and engages with startups. The startups accepted into the program will be provided a trial period to improve their technologies in the lab while also having the opportunity to collaborate with the bank’s partners and clients.

Earlier this year, in August, Nucleus Software, the leading provider of lending and transaction banking solutions to the global financial services industry, announced its strategic partnership with Microsoft to deliver the latest version of the best-selling lending software in the world, FinnOne Neo, on Microsoft Azure.

Nucleus Software’s products power the banking operations of more than 150 companies across 50 countries. Banks and financial services institutions increasingly use Microsoft Azure worldwide. This collaboration between Nucleus Software and Microsoft will provide banks with scalable, proven and cost-effective IT infrastructure to help them launch innovative offerings for customers.

In the official press release, commenting on the partnership, Mr. Arup Das, Vice President and Global Head – Lending Product, Nucleus Software said, We are excited about our partnership with Microsoft for its cloud services to drive the next wave of growth for the banking industry. For three decades, we have been helping our customers with the best-in-class software technology to stay competitive and deliver superior customer experience. The partnership with Microsoft is a step ahead in this direction and marks a significant milestone in our product leadership. Making FinnOne Neo available on the cloud will provide banks and finance companies with a much needed lending platform that is secure, scalable and responsive to the changing customer demands.

Last year in September, Microsoft announced a partnership with FS-ISAC to fight against cybercrime in the financial industry. The company joined hands with the Financial Services Information Sharing and Analysis Center (FS-ISAC), the global financial industry’s resource for cyber and physical threat intelligence analysis and sharing. Microsoft piloted the Cyber Threat Intelligence Program available to participating FS-ISAC members, which were able to receive near real-time information on known malware infections affecting more than 67 million unique IP address. With this information, FS-ISAC members can quickly identify infected computers on their networks and clean them of malware, through an automated, confidential and secure feed distributed via the cloud with Microsoft Azure. This collaboration underscores Microsoft's valuable input of intelligence into the global threat landscape affecting the financial services industry.

At the same time last year, Microsoft participated in the Sibos financial services conference, where the company displayed new apps, demonstrating how the cloud can help banks do business in underserved and emerging markets. Microsoft shared how the company's software and cloud services are powering and modernizing financial services. Among the companies Microsoft's solutions will power are DenizBank, a leading Turkish bank, and SunGuard, a provider of IT services for the financial industry.

When it comes to the security in financial services, we cannot ignore the question of authentication. That is where Microsoft is also taking steps to improve the customer experience and security of financial services. This year, in February, Microsoft participated in the United States White House Cybersecurity and Consumer Protection Summit at Stanford University where industry leaders discussed collaborative opportunities and new developments that will improve cybersecurity. As the company shared on the official website, Microsoft has contributed design inputs to the Fast IDentity Online (FIDO) Alliance, to be incorporated within FIDO 2.0 Technical Specifications. Microsoft states as one of the great challenges in online computing the problem of authentication, where the industry needs to move away from passwords to a stronger form of identity verification. To address this challenge Microsoft joined the FIDO Alliance to work with major industry partners to change the nature of authentication by developing specifications that define an open, scalable, interoperable set of mechanisms that will allow more secure authentication for online services.

2014 was a notable year for Microsoft exploring FinTech for one more reason - partnership with the Canary Wharf-based FinTech accelerator space Level39 in London.

As stated in the announcement, startups located in Level39 have access to a permanent Microsoft-branded area, where they can receive mentorship from some of the firm’s experts. This will include guidance on technology, enterprise sales, finance and product development. The technology giant will also deliver workshops on cloud and other services. Level39, which is owned by Canary Wharf Group, has also become a partner in the BizSpark Plus Network, Microsoft’s programme for startups. Eric Van der Kleij, head of Level39, said in a statement: Welcoming Microsoft to Level39 is an important step in our ambition to attract some of the biggest technology players to become integrated into the very fabric of the Canary Wharf technology cluster and growth opportunities.

Going back in years, it’s worth mentioning one of the early attempts of the software corporation to get involved in the innovative solutions from startups. One of the examples is the IP Ventures program, launched to fuel the imagination of young entrepreneurs and give them the opportunity to develop creative solutions. One of the companies that Microsoft's IP Ventures powered was Zignals, that developed a solution to give sophisticated investment advice to consumers in a broad way. Zignals’ initiative provided quality tools and data so that non-professionals and other finance wizards could build trading strategies and then offer them as a subscription to users of the site, which is open to anybody. Microsoft found the company’s business model very interesting - Zignals shares revenues collected from the subscriptions with the people who write the strategies.

IP Ventures program director Sharieff Mansour shared at that time in the press release, IP Ventures is about providing access to our innovations, providing a speed-to-market advantage for these startups, and the end of the story is providing successful exits for everyone involved.

Speaking of Microsoft’s dedication to the startup community and innovation mining, it’s also worth mentioning other ways the corporation is doing a great job supporting the startup ecosystem. One of them is the BizSpark program. As described on the official website, since 2008 BizSpark has helped over 50,000 start-ups in 100+ countries, providing access to business mentors, investment and partners as well as free Microsoft software and services.

Microsoft Ventures is another initiative with an emphasis on young B2B start-ups. Microsoft Ventures is a coordinated effort that offers several programs and tools for startups including a global Seed Fund and dedicated Microsoft Ventures Accelerators in London and Dublin (London being one of the world's centers of FinTech innovation). Microsoft Ventures has a robust set of FinTech startups in the portfolio: Bihang (China), CityFALCON (UK), Cringle (Germany). FortunePay (India), Idos (India), Invest&Co (France), Mybank (China), Myriada (UK), Realty Mogul (US), Stockradar (China), Suade (UK) and Sumscope (China).

Microsoft Innovation Centers - Microsoft's global network of state-of-the-art technology facilities involves over 100 government, academic and industry participants, all committed to collaborating on innovative research, technology and software solutions.

In 2015, the corporation participated in FINTECH50, a selection of the hottest FinTech startups leading to London being the hub of 24 of the hottest ones. Microsoft actively seeks innovation by being a part of the panel along with Google, American Express, Santander, Silicon Valley Bank and a selection of venture capital firms working in the city.

Another interesting example of the way Microsoft is leading FinTech is the London Accelerator programme (by Microsoft Ventures). Successful applicants started their 12 weeks participation in October 2015 and are now enjoying the benefits of the programme powered by Microsoft. Among the benefits listed by the company are free London office space in a dynamic and business-focused environment, 1:1 mentorship and support, cutting-edge curriculum with expert workshops on Lean Startup Methodology, Finance, IP Law, PR and much more, BizSpark Plus that provides open source friendly Azure cloud credits, access to the Microsoft ecosystem and the investor community.

Most importantly, there are two crucial points that Microsoft has emphasized. The corporation is not asking for any equity in the startups it nurtures. And they don’t need to build on Microsoft's tech to get in. By launching the programme, Microsoft wants to assist the startups in realizing their potential and taking their ideas...to the next level, of course.

As described on the official website, by the end of the programme, all the startups should be 100% pitch-ready for any VC/angel investor, and there is ongoing support, networking with peers, potential customers and partners, plus a global alumni programme. For this programme, Microsoft was looking for startups with a potential to disrupt FinTech, IoT, games, machine learning, cybersecurity, enterprise solutions and consumer apps industries using cloud-based technologies.

Along with the abovementioned ways Microsoft engages in the FinTech community, one of the most notable ones is the World Cup Tech Challenge 2015 held in June. The startups compete in one of six industry categories: Digital Media-Mobile, Health Tech, Edtech, Enterprise Software, Next Generation Technology, and FinTech. Microsoft hosts the last round of the competition among the finalists to choose Top 5 FinTech startups in its campus in Mountain View, CA.

According to the official website of the Cup, FinTech is a new category for the World Cup Tech Challenge this year, and one of the hottest industries in Venture Capital right now. The startups who made the FinTech category include Play Business, Brave New Coin, JACCOO, P2Binvestor, and Moneero. Of all the startups in the FinTech category, Moneero is the only one with a focus on mobile payments. Moneero is also one of four Latin American startups to make it this far in the competition and the first company ever from Uruguay to compete.

Moneero’s co-founder and COO Mauro Betschart shared his excitement in the news on the company's website, saying, For Moneero being part of the World Cup Tech is a huge opportunity and we are very happy and proud to be part of this elite group of startups. We are working very hard on our ambitious project to be the world’s mobile wallet, and as a company from a small country like Uruguay, to be chosen to present at Microsoft’s campus in Silicon Valley is a great achievement.

Microsoft also hosted and sponsored the FinTech Rising in NYC this summer, another event in the FinTech space, along with Santander, McCarter’s Venture Capital, UK Trade & Investment, PitchBook, ValueStream and The Macallan. FinTech Rising was designed to attract a wide cross section of the financial services community, both locally and nationally. FinTech startups came to pitch to the panel of VC and corporations to gain funding and momentum in development. FinTech startups pitching the solutions were P2P Cash, bMobilized, Tactile Finance, STASH, ChartIQ, Tienda Pago, MightyCloud, Open Capital Exchange, Refundo, Cashpath Financial, Socure, Inovance, SmarterAgent, Sensai, AllWebID, ClearFactr and SAFE.

As we can see, Microsoft is extremely eager to mine innovation and help young entrepreneurs in all spaces and in FinTech in particular. The Redmond, WA corporation is realizing the necessity to lead in innovation to build deeper customer loyalty and a leadership position in multiple segments.


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