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FinClusive Capital, Inc.

FinClusive Capital, Inc.

Comprehensive financial crimes compliance (FCC) services in one single workflow to enable financial inclusion

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Series A

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Elevator Pitch

FinClusive provides a full-stack financial crimes compliance platform with digital access to accounts & payments for companies and individuals underserved and excluded by traditional banks

Company Overview

FinClusive addresses financial inclusion by making mandated financial regulatory compliance simple and cost-effective for organizations (banks, nonbank financial institutions, small/med enterprises and nonprofits) and connecting them to regulated bank partners to provide their clients and communities access to financial accounts and make payments/transfers.

Targeted for un/underserved communities, our technology platform provides a comprehensive anti-money laundering and financial crimes compliance (AML/FCC) for organizations enabled via APIs and web-based user interface – this is Compliance as a Service (CaaS), an automated/full-stack financial crimes compliance solution designed for organizations providing financial services, from traditional banks to modern financial tech companies.

CaaS brings thousands of data/risk management tools to enable organizations of all types to conduct due diligence on individuals & businesses globally, monitor client activities and meet diverse regulatory compliance demands. CaaS is a gateway service to a growing US partner bank network, which enables these organizations to access insured accounts and the ability to safely store and move funds anywhere – for themselves and their clients/communities.

FinClusive’s platform is a secure and compliant gateway for the financially underserved and excluded, connecting traditional banking & alternative financial ecosystems, such as P2P mobile banking/financial networks and other digital payments service providers.

The plight of the excluded and underserved affects more than 35 million individuals and entities in the US and more than 3 billion people and millions of organizations and small businesses globally. These individuals and entities are denied access to the US/global financial system due to their high perceived compliance risk or challenges that make them ‘unbankable’ by traditional institutions (e.g. lack of a credit history, verifiable ID/track record, operate in an emerging/frontier market or high-risk jurisdiction, or in areas inaccessible to traditional banking). These individuals and organizations are increasingly turning to alternative financial channels (often unregulated, unsecure, non-transparent) or community and affinity organizations (charities/nonprofits, social service organizations) to facilitate their financial needs. These issues have exacerbated the plight of the underserved (low/mod income, minorities, small/med enterprises) in light of the pandemic and the ensuing economic downturn that will last for months/years. Working through these organizations, we can reach many individuals and entities that lack fundamental access to financial services, working capital and other basic financial products to survive.

The financially excluded / underserved includes, but not limited to:

• Veterans returning from service (homeless/challenged) who are often viewed as “high perceived risk” and thus unable to get a FDIC deposit account and must utilize alternative channels (some of which are predatory).

• Crowd funding/charity organizations perceived as being high risk that are unable to establish/maintain accounts and access to payment rails greatly limiting their ability to raise/distribute funds - this is impacting COVID-19 relief efforts, social justice initiatives, small business' access to financial resources.

• Community/social programs wanting to distribute assistance to constituents who may not have access to FDIC insured account and/or wanting to eliminate leakage/fraud - also impacting small/med enterprises.

• Fintechs providing alternative banking solutions to un/underserved and recognizing their obligation to adhere to financial crimes compliance regulations while providing new mobile/tech gateways – including cross-border payments and remittances – for financial access to build economic resilience.


  • Operations launched with Compliance-as-a-Service platform

    May, 2019
  • Revenue generation

    May, 2019
  • First bank signed as customer to begin providing KYC/onboarding compliance services

    June, 2019
  • Accounts and Payments services (via integration with banks of record) launched

    December, 2019
  • Stellar blockchain anchor and value transfer services launched

    June, 2020
  • Pipeline of customers engaged exceeds 120 entities

    July, 2020

Press Mentions

Previous Funding

  • $600,000 Equity
  • Raise Source: Investors
  • March 2018

Risks & Disclosures


FinClusive has a limited operating history. We may not be able to achieve or maintain consistent earnings or profitability.

FinClusive was incorporated on June 26, 2017 and launched its business operations in May 2019 and has had a limited number of customers since launch. Since launch of operations, the Company has continued to enhance its technology. There is no assurance that additional customers will be able to come into FinClusive’s platform in a timely manner or under the conditions presently anticipated.There is no assurance that we will be able to achieve profitability in future periods, or, if profitable, that our earnings will be consistent or increase in the future. See “Company Description” within the Private Placement Memorandum for further details.

Businesses in the fintech industry have been and may in the future be adversely affected by conditions in the financial markets and economic conditions both nationally and in our market areas.

Our success depends to a certain extent upon local and national economic and political conditions, governmental fiscal and monetary policies, as well as the more recent COVID-19 pandemic. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control can adversely or positively affect our asset quality, deposit levels, demand for financial products and service, and demand for payment facilitation and, therefore, our earnings and capital. We anticipate operating in markets associated with high levels of underserved and excluded individuals, who likely will experience an economic downturn more acutely, and marketing ourselves nationally to both “perceived high-compliance” businesses and traditional businesses.

Our sales strategy is dependent on our channel partners bringing users to our platform.

We utilize a channel strategy for the majority of our sales effort.This strategy places a high level of dependence on our channel partners to bring end users onto our platform.Failure by our channel partners to attract and retain a user base, or a shift by our channel partners to a competitor’s service, may dramatically negatively impact our ability to achieve our financial targets and could dramatically impact our business.We will be assisting our channel partners with marketing efforts (in certain instances, FinClusive may consider contributing to their marketing budget) as well as outreach strategies to assist in both the growth and engagement of their respective user base which could decrease our cash flow and limit our resources for ongoing platform development.See “Company Description” and “Marketing and Sales” for further details.

We rely on third parties to perform significant operational services for us.

Third parties perform specific operational services on our behalf including IdentityMind Global Inc. (“IdentityMind”) and Integrity Risk, LLC ("Integrity Risk"), among others (“Third Party Providers”). These Third Party Providers are subject to similar risks as FinClusive relating to cybersecurity, breakdowns or failures of their own systems or employees. One or more of these third parties may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by such third party. Certain of these third parties may have limited indemnification obligations or may show themselves as not having the financial capacity to satisfy their indemnification obligations. Financial or operational difficulties of a third party could also impair our operations if those difficulties interfere with such third party’s ability to serve us. If a critical third party is unable to meet our needs in a timely manner or if the services or products provided by such third party are terminated or otherwise delayed and if we are not able to develop alternative sources for these services and products quickly and cost-effectively, it could have a material adverse effect on our business, cash flows and results of operations. Additionally, regulatory guidance adopted by federal banking regulators related to how banks select, engage and manage their third parties and/or vendor relationships may negatively affect the circumstances and conditions under which we work with third parties and raise the costs of managing such relationships. See “Management Discussion and Analysis” for further details.

We may not realize the expected benefits of our strategic initiatives.

Our ability to compete depends on a number of factors, including among others, our ability to develop and successfully execute our strategic plans and initiatives. Our strategic priorities include growing profitably and maintaining financial strength; effectively managing risk and reward; engaging a high-performing, talented, and diverse workforce; and embracing the changes required by our clients, the regulatory environment and the marketplace. Acquiring and expanding customer relationships, including by “cross-selling” additional or new products to them, is also very important to our business model and our ability to grow revenue and earnings. Our inability to execute on or achieve the anticipated outcomes of our strategic priorities may affect how the market perceives us and could impede our growth and profitability.

Our increasing emphasis on providing services to perceived high-compliance clients and the underserved and excluded may expose us to increased compliance risks.

Our business model is built upon being able to provide sophisticated compliance services to underserved and excluded individuals and entities to the formal banking system.These shall include unbanked and underbanked individuals and companies (including bank and non-bank financial services entities), de-risked entities and individuals (i.e. those whom banks have ceased doing business with or have denied services to, largely due to the perceived higher compliance, and therefore costs, associated with such clients).These customer segments will be perceived by our regulators as potentially presenting increased risk due to the nature of their business or individual activities, or lack of readily available or verifiable information for purposes of know your customer (“KYC”) and customer due diligence (“CDD”) requirements, or whose nature of business/financial activities involve those whom regulators/governments have labeled “increased or heightened compliance risk,” such as international remittances, business in/with/through emerging/frontier markets, especially those residing in jurisdictions considered to have weak anti-money laundering (“AML”) and combatting the financing of terrorism (“CFT”) regimes, and with individuals and entities that may have no credit history, have largely engaged alternative financial services (e.g. payday lending, check cashing, online payment providers, etc.), or otherwise be new to financial services.These factors will present an increased compliance and regulatory onus on FinClusive specifically related to undertaking due diligence and KYC activities that would be sufficient to initiate and maintain engagement with such clients.If we are unable to maintain effective compliance protocols and controls, including those newly required by financial regulators, it could affect our ability to meet our targeted objectives and, in turn, slow the growth of the business. These factors could have a materially adverse effect on our financial condition and results of operations.

The financial services industry is subject to extensive government regulation and supervision. Legislative or regulatory changes or actions could adversely impact our business.

The financial services industry is extensively regulated. Our Third Party Providers and a segment of our customers will be subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our proposed operations. These laws and regulations are primarily intended for the protection of consumers, depositors, borrowers, and the deposit insurance fund.Changes to laws and regulations or other actions by regulatory agencies may negatively impact us, possibly limiting the services we provide, increasing the ability of non-banks to compete with us or requiring us to change the way we operate. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on the operation of an institution and the ability to determine the adequacy of an institution’s allowance for certain financial failures or challenges related to its clients (e.g. loan losses). Failure to comply with applicable laws, regulations, and policies could result in sanctions being imposed by the regulatory agencies, including the imposition of civil money penalties, which could have a material adverse effect on our operations and financial condition.

In light of current conditions in the global financial markets and the global economy, regulators have increased their focus on the regulation of the financial services industry. In the last several years, Congress and the federal bank regulators have acted on an unprecedented scale in responding to the stresses experienced in the global financial markets. Some of the laws enacted by Congress and regulations promulgated by federal bank regulators subject us and other financial institutions to additional restrictions, oversight, and costs that may adversely impact our business and results of operations.

Our clients may also be subject to additional regulations under the Consumer Financial Protection Bureau, which was given broad authority by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to implement new consumer protection regulations. These and other provisions of the Dodd­Frank Act, including future rules implementing its provisions and the interpretation of those rules, may place significant additional costs on us, impede our growth opportunities and place us at a competitive disadvantage.

In July 2013, the federal banking regulators, published final rules establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The implementation of the final rules for smaller, less complex banking organizations commenced in January 2015.These rules are designed to lead to higher capital requirements and more restrictive leverage and liquidity ratios than those previously in place. In addition, and in order to avoid limitations on capital distributions, such as dividend payments and certain bonus payments to executive officers, the rules require insured financial institutions to hold a capital conservation buffer of common equity tier 1 capital above the minimum risk-based capital requirements. The capital conservation buffer will be phased in over time, becoming fully effective on January 1, 2019, and will consist of an additional amount of common equity equal to 2.5% of risk-weighted assets. The rules will also revise the regulatory agencies’ prompt corrective action framework by incorporating the new regulatory capital minimums and updating the definition of common equity. The rules phased in beginning January 1, 2014, for larger institutions and on January 1, 2015, for smaller, less complex banking organizations, and will be fully phased in by January 1, 2019. Until the rules are fully phased in, we cannot predict the ultimate impact they will have upon the financial condition or results of operations of our counterparties, clients and partners (particularly in the regional, sub-regional or community banking sectors), fintech sector, or non-bank financial institutions sector and how it may impact our operations.

We are subject to a variety of operational risks.

In addition to the other risks discussed in this section, our operations will be subject to operational risk, which represents the risk of loss resulting from human error, inadequate or failed internal processes and systems, and external events. Operational risk includes the risk of fraud by employees, clerical and record-keeping errors, nonperformance by vendors, threats to cybersecurity, and computer/telecommunications malfunctions. Operational risk also encompasses compliance and legal risk, which is the risk of loss from violations of, or noncompliance with, laws, rules, regulations, prescribed practices or ethical standards, as well as the risk of our noncompliance with contractual and other obligations. We will also be exposed to operational risk through our outsourcing and partner and vendor arrangements, and the effect that changes in circumstances or capabilities of the outsourcing vendors can have on our ability to continue to perform operational functions necessary to our business. For example, breakdowns or failures of our vendors’ systems or employees could be a source of operational risk to us. In particular, our partnership with Q2, which is the core banking software system for the network of over 800 community banks we plan to drive new account creation, could experience operational challenges that may impact FinClusive.Resulting losses from operational risk could take the form of explicit charges, increased operational costs, harm to our reputation, inability to secure insurance, litigation, regulatory intervention or sanctions, and foregone business opportunities.

Our information systems may experience an interruption or breach in security due to cyberattacks or other incidents.

In the ordinary course of our business, we may collect and store sensitive data, including our proprietary business information and that of our customers, clients, suppliers and business partners, and personally identifiable information of our employees, in our data centers and on our networks. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan, and other systems. The secure processing, maintenance and transmission of this information is critical to our daily operations. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of confidential information and regulatory penalties, disrupt our operations and the services we provide to customers, and cause a loss of confidence in our products and services, which could adversely affect our business, operating margins, revenues and competitive position.

We rely heavily on our management team and the loss of key management may adversely affect our operations.

Our performance will be strongly influenced by our ability to attract and to retain senior management experienced in banking, technology, risk and compliance management, financial regulatory affairs, and corporate operations. Our ability to attract and retain key executive officers will continue to be important to successful implementation of our strategies and our ability to reach sustainable profitability. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business and financial results.

We may need additional funds in the future in order to update our technology, grow and broaden our customer base, and expand our product and service offerings.

We believe that the proceeds from the Offering will fund our operations for at least the next 14 months. However, we may be required to raise additional capital through the issuance of debt or equity to fund the following:

We may be unsuccessful in raising sufficient capital at all or on terms that we consider acceptable. If this happens, our ability to continue to expand our business or respond to competitive developments would be impaired.

We need to constantly update our technology to compete and meet customer demands.

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. In addition to better serving clients, the effective use of technology increases efficiency and may enable us to reduce costs. Our business model is dependent upon strong technology to leverage our platform to attract and retain customers.Our success will depend, in part, on our ability to use technology to enable a cost-effective means to facilitate financial services to our users and to cost effectively provide traditional and enhanced digital services. Some of our competitors have substantially greater resources to invest in technological improvements. We may not have adequate financial resources to invest in updated technology to meet competitor offerings, be able to effectively implement new technology-driven products and services or be successful in marketing any new products and services to our users.

In addition, while it is part of our business plan to secure intellectual property protection, including patents as to our inventions, there can be no assurance that any patents will be issued from any pending or future patent applications; that the scope of any patent protection will be sufficient to provide competitive advantages; or that any patents we obtain will be held valid if subsequently challenged.We may also be subject to the risk of third-party patents asserted against our business and operations.The defense and prosecution of patent suits may be both costly and time consuming even if the outcome is favorable to us.An adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties, or require us to cease offering or providing certain of our services.

We utilize a significant number of contractors for development of our technology.

We intentionally expect to utilize a significant number of third-party contractors as part of our technology development.While providing for significant operating efficiencies, it also leaves us potentially vulnerable to theft of intellectual property and operating processes.Such a theft would adversely affect our business and prospects.

Our information systems may experience an interruption or security breach.

We will rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our systems. There can be no assurance that any such failure, interruption or security breach will not occur or, if it does occur, that it will be adequately addressed. The occurrence of any failure, interruption, or security breach of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability.

We may become the subject of litigation which could result in legal liability and damage to our business and reputation.

From time to time, we may become subject to claims or legal action from clients, employees, or others. Financial institutions are facing a growing number of significant class actions, including those based on the manner of calculation of interest on loans and the assessment of overdraft fees.Future litigation could include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. We may also be subject from time to time in other reviews, investigations and proceedings (both formal and informal) by governmental and other agencies regarding our business. These matters also could result in adverse judgments, settlements, fines, penalties, injunctions, or other relief. We are also subject to risk from potential employee misconduct, including non-compliance with policies and improper use or disclosure of confidential information. Substantial legal liability against us could materially adversely affect our business, financial condition, results of operations, and/or cause significant reputational harm to our business.