Method Financial has raised $41.5 million in a Series B funding round to continue building its solution for consumer-permissioned financial connectivity and expanding it to new use cases.
The company currently powers more than 60 FinTech and consumer lending clients and has enabled 30 million passwordless account connections for 4 million consumers, it said in a Thursday (Jan. 23) press release.
“This new round of funding is another steppingstone toward a world where everyone has the tools they need to make informed financial decisions,” Method Co-founder and CEO Jose Bethancourt wrote in a Thursday blog post. “We have a series of announcements coming up announcing some of the exciting new tools.”
Method’s application programming interfaces (APIs) provide real-time access to consumer liability data with integrated payment rails, leveraging integrations with more than 15,000 financial institutions, according to the press release.
The company uses identity-based authentication and consumer consent — rather than usernames and passwords — and says this delivers a near frictionless experience and a conversion boost of 15% to 20%, per the release.
Method currently focuses on helping FinTechs and lenders increase refinancing revenue, the release said. With its new funding, the company plans to expand into more use cases.
The company’s latest funding round comes soon after the Consumer Financial Protection Bureau (CFPB) adopted an open banking rule that requires banks to make consumer financial data accessible via APIs, Lotti Siniscalco, partner at Emergence Capital, which led the round, said in a blog post.
“Method is ahead of this curve, having already built the connectivity and user experience that the industry is moving toward — with security and consumer data protection at its core,” Siniscalco wrote in the post.
The shift to open banking will be one of the key trends in financial services this year and beyond, PYMNTS reported in December.
Open banking gives individuals ultimate control over their financial data, allowing them to decide who gets to see that information and how it is ultimately employed. It also allows banks and FinTechs to harness permissioned data to extend credit, verify identities or speed account-to-account payments.
APIs are at the center of it all, enabling the points of connection between providers and permissioned data.