Financial Services Innovation Domain

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Omni-Channel: The key drivers of this space as it applies to financial services.

Traditional banking models have focused on having a personal relationship with the customer. Emerging technologies allowing customers to access their accounts from anywhere, anytime, is changing that human interaction focus. With customers frequently shifting channels, banks must merge both the physical and digital aspects in order to meet customer needs. The three main drivers for financial institutions to take an omnichannel approach are enhanced customer experience, increased revenues and reduced operating costs.

Enhanced Customer Experience

A recent global survey done by CGN Research & Advisory Group asked participants if some of the most well-known technology companies offered banking services, how likely they would be to work with them. The market data showed that 53 percent would use the banking services of PayPal, 49 percent would use Apple, 39 percent each for Facebook and Google, and 31 percent would use Amazon. While these companies do not currently offer banking services, they have set a standard in the omnichannel platform. From these technology giants, customers have come to expect unlimited availability, individual customization, seamless transactions, and quality innovation.

Currently, 65 percent of banking customers use multiple channels to interact with their bank and about 46 percent of all banking customers are omni-digital only, meaning they do not use a physical branch at all. This omni-digital number is expected to rise to 68 percent of the overall banking customer base by 2020. To meet this growing demand, banks and financial institutions are moving towards more digital platforms that offer convenience, accessibility and innovation. In addition, banks are making more products and services available over multiple digital channels that work together as a consistent connection.

From 2012 to 2016, there was a 25 percent per year increase in active mobile channel users for US banks while the number of active online users remained about the same. Mobile logins have grown at an average rate of 12 percent per year. Banks with the most seamless mobile platform see greater growth in mobile logins. This has driven banks to design and develop for the mobile channel a top priority.

With a digitally savvy consumer base, increasing with the rise of millennial, financial institutions realize that they must get the omnichannel approach right. Customers are aware of the market offerings. If things are too complicated or require too many steps, they will simply move on and find a better digital experience.

Increased Revenues

Having an omnichannel presence can increase customer awareness of product offerings and produce greater closing rates resulting in higher product penetration and revenue.

Many banks are using their digital platforms to deploy sales prompts in order to increase their customers’ awareness of product offerings. CRM technology allows banks to customize offerings based off of the customer’s history. Sales prompts include banner ads, product offering pages, hyperlinks, and interstitial ads. Banks that use at least one sales prompt have a 77% higher sales volume per customer than banks using no sales prompts.

Omnichannel formats also offer the opportunity for banks to follow up on incomplete digital applications for products such as checking/savings accounts, loans or credit cards. It is estimated that only about 10 percent of customers who abandon a digital banking application return to complete the application. Banks that are integrating webchat or linking their digital sales process with a call center are experiencing a 43 percent conversion rate on abandoned applications.

Both a survey by PwC and McKinsey found that customers that use multiple channels to access their financial institution typically report a need for a larger range of financial products. In fact, customers who use one channel have on average 5 banking products. Customers who use 3 channels average 7 products and those who use more than 3 channels average 9 products. As far as revenue, 3 channel customers generate 97 percent more revenue than single-channel users. Customers using more than three channels generate 110 percent more revenue.

Reduced Operating Costs

On average, physical branch channels cost about $4.00 per transaction. Digital channels cost between $0.09 to $0.19 per transactions. US banks are experiencing a 95 percent reduction in costs per deposit transaction over digital channels. Withdrawal transactions processed digitally see an 88 percent cost reduction. Annually these reductions amount to about 3.5 percent. Properly utilizing omnichannel resources could save a small regional bank about $2 million and large banks up to $12 million yearly.


The primary drivers for omnichannel innovation in the financial sector are enhanced customer experience, increased revenue and cost reduction. The omnichannel presence in other sectors has led to a growing demand in the financial realm with consumers expecting easy, seamless transaction experiences.

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Omni-Channel: The key players, as they apply to financial services.

While there is no preexisting information to fully answer your question, we've used the available data to pull together key findings: the top Venture Capital investors in Financial Services and FinTech, as well as key players in the Finance & Accounting as-a-Service in 2017.

Below you'll find an outline of our research methodology to better understand why the information you've requested is publicly unavailable, as well as a deep dive into our findings.


To answer your question, I looked in venture capital (VC) databases, industry reports, press releases and industry analyses. While I found anecdotal examples such as and FattMerchant, I did not find a source that aggregates or ranks investors for their investments in omni-channel innovations in financial services. Therefore, I used the closest information available which is ranking by number of investment in Financial Services and FinTech including omni-channel innovations. I also included industry reports as well as analysis of key players in this area. Please continue below to see the results of my research.


I found that all venture capital databases I researched did not provide category filters as specific as "omni-channel". The closest available filters were Financial Services and FinTech. I used Crunchbase as my main source as it provided the number of investments as well as the amount for individual investments (by following the links provided).
According to Crunchbase, the top 10 Venture Capital firms worldwide investing in Financial Services and Fintech are:

1. Felicis Ventures (USA)
Number of investments: 344

2. Internet Initiatives Development Fund (Russia)
Number of investments: 335

3. SAIF Partners (Hong Kong/China)
Number of investments: 232

4. Altos Ventures (USA)
Number of investments: 151

5. Mobius Venture Capital (USA)
Number of investments: 148

6. Go Beyond Investing (Switzerland)
Number of investments: 135

7. F-Prime Capital Partners (USA)
Number of investments: 129

8. TL Ventures (USA)
Number of investments: 111

9. Social Leverage (USA)
Number of investments: 79

10. Oxford Finance Corporation (USA)
Number of investments: 79


By conducting a press and news search, I found the following anecdotes featuring investments into omni-channel platforms for financial services:

■ Last October 2017, Bizjournals reported that the VC firm Fulcrum Equity Partners invested $5.5 million into the Orlando, Florida-based Fintech firm Fattmerchant. Fattmerchant specializes in omni-channel integrated payment technology and reportedly processes over $1 billion in transactions.

■ In July 2017, the Singapore-based startup mentioned that it raised $3 million in funding from IDG Ventures India and Kalaari Capital the year prior. is focused on building an omni-channel platform specifically for banks to enhance their customer engagement and experience.


As early as 2014, Efma and Infosys reported in "Innovation in Retail Banking" that banks are seriously investing in omnichannel experiences for their clients. In its 2017 report, Efma notes that "even though 100% of bankers indicate that omni-channel is important, only 1 in 5 banks is expanding its omni-channel strategy." However, as with its earlier report, no names were disclosed identifying the biggest investors in omnichannel banking.


HfS released its 2017 analysis of the key players in the Finance & Accounting as-a-Service in the report "F&A As-a-Service Blueprint 2017". A snapshot of its blueprint distinguishes the following high performers:

• Accenture

Though the report addresses finance and accounting broadly, it does focus on innovations towards improving financial services which include omni-channel services. The HfS report notes that "the participating service providers are making investments and progress in some way towards a more insight-driven, digital-enabled finance function."

The full report is available for a fee here.


To wrap it up, while we found no preexisting information to fully answer your question, we've used the available data to provide the top Venture Capital investors in Financial Services and FinTech by number of investments according to Crunchbase. We also found the key players in the Finance & Accounting as-a-Service in 2017 according to HfS' 2017 report. Finally, I included anecdotes of startups that have raised funding for their omni-channel platforms geared specifically for financial services.
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Omni-Channel: Key competitors and what they are doing, as they apply to financial services.

Key competitors in the financial services Omni-channel domain include JPMorgan, Chase, Bank of America, American Express, Wells Fargo, Barclays, and Citi Bank. Different digital services that these competitors have developed include blockchain technology for non-traceable transactions, chatbots and biometrics to improve customer experience as well as security, mobile apps and digital wallets, and artificial intelligence whose capability and usage is still under determination. While most of the top banks in the U.S. have invested in and brought forth Omni-channel financial services, we have only included banks that made remarkable use of it.

Digital wallets

Of the services introduced, research suggests that digital wallets are the least impressive. In July, Citi Bank introduced a digital wallet/P2P service in affiliation with Zelle network. This wallet can be used for online and in app transactions which are protected via the tokenization technology.

App-based services

Bank of America debuted innovative updates on its mobile app in September. The updates include a customizable home screen to suit the preferences of the customer, a goal setting tool to help achieve saving targets, and a cardless ATM transaction.

Virtual Banks

Because of several technological advances and lack of necessity, several banks have shut its physical doors and expanded into a virtual approach to match the digital era. Among these banks include Bank of America, Citi, and JPMorgan. In the brick-and-mortar place, banks have introduced full-service automated financial assistants, or chatbots. The chatbots are in place to cover simple tasks, like budget tracking and making payments. These banks are rethinking and reinventing what traditional banking means for customers. Please note that this source is a little more than a year old, but relevant to the comparison.


Some banks are looking towards biometrics to increase security and authentication. At Wells Fargo, customers can scan the veins in their eyes to log into CEO Mobile, which is the bank's Commercial Electronic Office mobile portal. Barclays is introducing finger vein technology to authenticate its customers.


In November, American Express launched blockchain-based payments using the cryptocurrency, Ripple. A fintech startup, Ripple partnered with Amex to provide real-time payments for U.S. customers sending funds to the U.K. It is important to note that this development by Amex is one of the first major companies to use blockchain for transactions.

Artificial Intelligence

Perhaps the most underdeveloped Omni-channel domain is artificial intelligence. Banks are incorporating AI to improve customer experiences. Wells Fargo, Bank of America, and CitiBank are using AI for one overall goal: to enhance customer experience. This includes increased connectivity for payment methods, updates in mobile banking, and working toward improved financial health. It should be noted that AI is widely unexplored and opportunities in the future are endless.


There are many innovations within financial services of Omni-channel domain. These include digital wallets, app-based services, virtual banks, biometrics, blocktrain technology, and artificial intelligence.

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Omni-Channel: The implications for financial services.

What is omnichannel?

Businesses are adopting the omnichannel model to improve customer service for consumers adjusted to digital devices. Technology has changed consumer expectations toward services that seamlessly interact with one another. Services are expected to share information allowing a consumer to continue work across devices or have data from one product available in another product. For example, a consumer may have access to detailed credit card information across desktop and mobile apps as well as over telephone or in person. A customer associate in a physical store may carry around a tablet to help visitors or ring up their merchandise. Apps or a store’s web site may integrate with the physical store, directing customers to deals or warning about stock levels. All of this information would be available seamlessly across mediums, granting more power to consumers but also increasing efficiency for both users and businesses.

The benefits to finance and future applications

Finance is an area that can greatly benefit from the omnichannel model. As a Microsoft Enterprise article on insurance notes, insurers work with large “information silos” as well as massive networks of agents. To stand out, insurers have to compete to provide the best customer experience rather than simply providing a transaction. Insurers must strive to treat the customer with intimacy by partnering with them to achieve the customers goals. The article argues that the omnichannel model is one of the major steps insurers, and by implication other financial institutions, must take toward evolving their business.

Working toward that goal requires making use of “customer insight.” Insurance companies gather a treasure trove of information from digital interaction with their customers. Unfortunately, that information is often “locked in silos” or separated from each other preventing agents from seeing the full picture. Omnichannel involves creating a 360 degree picture by amalgamating all of that information which would allow insurers to better serve customers. Furthermore, tools such as mobile apps that can leverage that information is also key.

Banks are in the same boat as insurance companies. Marco Antonio Cavallo of CIO magazine argues that banks are evolving to make use of the omnichannel model, especially due to “GAFA” (Google, Amazon, Facebook, and Apple) which is at the forefront of the omnichannel push. Digital-only users prefer to conduct their business entirely online, such as by the use of mobile apps that allow users to check their balance and cash checks right from their phone. GAFA and others have presented and solidified a new paradigm based on ease of use directly from home whereas, Cavallo states, banks have less experience with providing a unified experience. A recent survey from 2017 showed that participants would be willing to work with PayPal, Apple, Facebook, Google, Amazon, et cetera if they provided banking services. It’s estimated that digital only users who make use of omnichannel services will grow from 27% in 2012 to 68% of the banking customer base by 2020. Banks will have to adapt as the proliferation of digital services allows customers to easily shop for businesses and banks to patronate.

Big Data

A crucial piece of this puzzle is big data. Financial instruments such as banks and insurance companies require and gather a lot of data on consumers which, as mentioned above, can be leveraged for the omnichannel paradigm. For example, businesses can gather how users navigate sites, use their app and for how long, which menus are used the most, which devices, et cetera to improve user experience. Google has found that 90% of people use multiple devices to complete a task over time and 98% of people switch between devices. Financial businesses can use the data gathered to provide a consistent experience across all of their users’ screens as well as present all of the information users desire. Big data also helps with the extreme, individualized personalization digital users have come to expect as companies can easily gather data on how their web sites and apps are used. Big data and omnichannel is not simply a collection of records but using data to build a “system of engagements” where what the customer expects is automatically provided to them.

Potential problems

As we’ve observed, omnichannel is considered the next logical evolution for finance as well as other businesses. However, omnichannel can be difficult to implement and keep running. Providing a consistent experience between devices as distinct as computers, phones, and tablets is difficult and requires a lot of planning beforehand. Businesses must also track users across channels and fix problems as they arise. In other words, implementing omnichannel is a project requiring constant feedback and tuning. An article in Forbes by Steve Dennis argues that some businesses, such as Macy’s, blindly pursue omnichannel without adequately implementing it. Some companies have focussed too much on their digital presence in order to lure potential customers to their digital channels while ignoring their physical stores. Finally, omnipresence, due to the extra digital channels and unified experience, requires reliable security. Hacks, leaks, data dumps, and all of the problems that have plagued companies in recent memory is clearly not indicative of a good user experience. Simply unifying channels is not enough if data isn’t protected.


Omnichannel is the logical future for financial businesses. Finance has an extreme amount of information on their clients which they can use to improve user experience across devices which, in turn, benefits clients and the business. However, omnichannel is not a simple solution; it must be consistently worked and reworked based on new, incoming data to succeed.
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Conversational Commerce - The key drivers of this space as it applies to financial services.

To best explore conversational commerce in the realm of financial services, we focused on finding key drivers for shifting the way in which financial institutions and customers interact, key drivers for improvement, and availability of payment services. The growing use of mobile messaging, by way of chatbots, stands out as the key driver for shifting to conversational commerce. It should be noted that few of these also provide payment services.


Every industry has experienced an influx of different technologies and artificial intelligence changing the ways of life, and the financial sector is no different. The main driver in the shift to conversational commerce can be credited to the growing usage of mobile apps. Other drivers include inflection points in AI and natural language processing, the rise of wearable tech, seamless payments, and increased sophistication of notifications.

The increasing use of mobile technologies and social networks causes companies to rely on chat apps for digital commerce. Through chatbots and business-to-consumer (B2C) text-based messaging, businesses can provide customer services without human interaction. Another feature in chat apps has allowed customers to make payments within the app via mobile wallets. An eMarketer report suggests that because customers are on channels like messaging apps and connected devices, companies should implement digital commerce where they already are. One way is by the use of chatbots in customer service. Although payments through apps is not yet popular in the U.S., the report suggests that this will change with Gen Z.

Chatbots have already proven to save companies money and time by taking the work away from human agents, who have a finite number of customers they can interact with at once. According to IBM, millennials will experience and cause a major shift in conversational commerce. IBM recommends that organizations should: "switch to conversational commerce which offers rapidly expanding market opportunity, add intelligent automation to enhance customer’s self-service experience, and use customer data and insights to better route customers to agents who can best address their needs through personalized content."

Cisco uses bots for conversational commerce and recognizes that there is much more to explore in the realm of AI. The "intelligent assistance" provides speech recognition, natural language processing, and improves machine learning and analytics.

Within the financial sector, Kassisto provides AI called KAI, which are virtual assistants and smart bots for banking and payment services. Among other things, KAI can help customers manage their money, track expenses, analyze spending, and make payments. Other examples of conversational payment services are: Viber, WeChat, and PayPal.

Along with the benefits of conversational commerce, it is important to recognize the disadvantages to the AI. Cons include the newness and glitches of the product, security and privacy issues, expenses, and potential fraudulent activity. The concern of protecting consumers' identities is also important to consider. Self-Sovereign Identity (SSI) means that "data and other components that define an individual or organization’s identity are 100% owned and controlled by that individual or organization. No one else can read it, use it, turn it off, or take it away without its owner’s explicit consent." Several organizations have created initiatives around SSI to protect their consumers.


Conversational commerce is quickly rising in the financial sector as it eases many tasks, such as customer services and seamless payments. As AI research and technology continues to increase, the opportunities are predicted to be endless.
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Conversational Commerce: The key players, as they apply to financial services.

Five key venture capitalists in the conversational commerce domain are Oak HC/FT, Propel Venture Partners, Commerce Ventures, Partnership Fund For New York City, and Telstra Ventures. All except Telstra were selected based upon their involvement in the funding of Kasisto Inc., creators of KAI, a leading conversational AI development platform.

Telstra Ventures was added to the list because, as well as having funded several other conversational commerce related ventures, they are also rated among the top 21 most active corporate venture capital firms by CB Insights. For more funding details, please see the individual company profiles below.

A key innovation in the conversational commerce domain is KAI by Kasisto Inc. It was selected because its KAI Banking version is a conversational AI platform designed specifically for the Financial Services industry.

A Key Incubator in the conversational commerce/financial services domain is T-Hub. It was selected based upon the frequency of mentions in recent and credible media, as well as it's involvement with YES FINTECH/



Oak HC/FT describes itself as "a premier venture capital fund investing" firm. The company is in the early stages of growth for its tech-enabled companies and has invested in both healthcare information, healthcare services, and financial services technology.

Oak HC/FT was the lead investor in the $17 million Series B funding round for Kasisto Inc. Other investments in the financial services sector include Clara Analytics, Digital Currency Group, FastPay Partners, Feedzai, Insureon, NextCapital, Poynt, Trov, and Urjanet.

Oak HC/FT's individual contribution to the above funding rounds is not publicly available.

The company was co-founded by Annie Lamont, Andrew Adams and Patricia Kemp in 2014.

Propel Venture Partners

Propel Venture Partners is a venture capital firm that is "focused on opportunities at the intersection of technology and finance."

Propel Venture Partners was an investor in both the $9.2 million Series A and $17 million Series B funding rounds of Kasisto Inc. Other investments in the financial services sector include DocuSign, Coinbase, TravelBank, Ease Central, Hippo Insurance, and Hixme Inc.

Propel Venture Partners' individual contribution to the above funding rounds is not publicly available.

The firm was founded in 2016 as a spin-off of Spanish banking giant BBVA. Current partners are Jay Reinemann, Ryan Gilbert, and Thomas Whiteaker.

Commerce Ventures

Commerce Ventures is another venture capital firm with a focus "on investments in the e-commerce, retail, FinTech, and insurance sectors."

Commerce Ventures was an investor in both the $9.2 million Series A and $17 million Series B funding rounds of Kasisto Inc. Other investments in the conversational commerce domain include Boomtown, OwnerListens, and Welcome.

Commerce Ventures' individual contribution to the above funding rounds is not publicly available.

The business was founded in 2013 by Dan Rosen. Other current partners include Dan Raveh and Matt Nichols.

Partnership for New York City

The Partnership for New York City has an investment arm known as the Partnership Fund for New York City.

PFNYC was an investor in both the $9.2 million Series A and $17 million Series B funding rounds of Kasisto Inc. Other investments in the conversational commerce domain include Digital Reasoning.

PFNYC's individual contribution to the above funding rounds is not publicly available.

The Partnership for New York City was founded by Henry Kravis in 1996. Maria Gotsch is the current President and CEO, along with Co-Chairmen Charles R. Raye and Tarek Sherif.

Telstra Ventures

Telstra Ventures, also known as Telstra Applications and Ventures Group, is the investment arm of Australian telecommunications company Telstra.

Telstra Ventures has invested in the following companies, which are involved in the conversational commerce domain:
Boomtown — A unified support platform for all customer communication, team collaboration, and on-demand services.

Enepath — Trader voice technology for the financial services sector.

C88 Financial Technologies — Connects banks and insurers in Asia to consumers buying financial products online.

Telstra Ventures' individual contribution to the above funding rounds is not publicly available.

Telstra Ventures was founded in 2011. It's current Managing Directors are Matthew Koertge and Mark Sherman.


KAI by Kasisto Inc.

KAI, an open source conversational AI platform developed by parent company Kasisto Inc., is being used by dozens of banks worldwide to power their omnichannel chatbot systems. The KAI Banking AI platform consists of "thousands of banking intents and millions of banking sentences." This platform can improve its own performance through machine learning as it fulfills requests, predicts the needs of customers, and solve problems. Chatbots powered by KAI are equipt with the intelligence "of a personal banker" and can "interact as naturally as texting a friend." Through KAI, banks can now reach customers on "exploding messaging services and create entirely new banking experiences."

Kasisto Inc. was founded in 2013 by Zor Gorelov, Sasha Caskey, and Dror Oren.



T-Hub considers itself to be a unique public and private collaboration between the government of Telangana, which consists of "3 of India’s premier academic institutes (IIIT-H, ISB & NALSAR) and key private sector leaders." This company combines the start-up, corporate, academic, government, and research sectors.

T-Hub is India's fastest growing startup engine and runs India's largest incubator for startups and corporate innovation programs.

T-Hub is a collaborator in YES BANK's accelerator program known as YES FINTECH. One of the start-ups selected to participate in YES FINTECH is, a platform for Conversational Commerce which "enables companies and brands to showcase their products and services on social media platforms, and text messages through a chatbot."

T-Hub was founded in 2014 by current COO Srinivas Kollipara.


In summary, here are our 7 selections for Key Players in Conversational Commerce, as applied to the Financial Services industry:

1. Oak HC/FT (venture capital).
2. Propel Venture Partners (venture capital).
3. Commerce Ventures (venture capital).
4. Partnership for New York City (venture capital).
5. Telstra Ventures (venture capital).
6. KAI by Kasisto Inc. (innovation).
7. T-Hub (incubator).
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Conversational Commerce: Key competitors and what they are doing, as they apply to financial services.

Over the past year, Bank of America, Capital One, American Express, Wells Fargo, and Citi Singapore have developed chatbots/virtual assistants that utilize natural-language technology to communicate with customers. TD Bank and HSBC (in Hong Kong) use voice recognition technologies to identify their customers at its customer call center and phone banking service respectively. Below, I will provide an analysis on what Bank of America, Capital One, American Express, Wells Fargo, Citi Singapore, TD Bank, and HSBC are doing in the Conversational Commerce domain as it applies to financial services.


Bank of America started to develop Erica, a voice- and chat-driven, natural-language digital assistant since the fall of 2016. Erica is still in the beta testing phase. Most of the functions designed into Erica are integrated with a lot of the bank’s existing back-end systems. As Erica learns from the transactions made during the testing, she would be able to offer advice more proactively instead of just reciting the information that she has.


In March 2017, Capital One started to roll out Eno, a gender-neutral, natural-language virtual assistant as a pilot to a group of its customers. The bank deliberately chose a gender-neutral name as the predominance of female names among digital assistants has received criticism. Eno is capable of communicating with customers via text message to give them information on their accounts. Eno also has the ability to recognize certain emojis such as the ‘bag of money’ emoji, which mean that the customer is requesting to check their account balance.


In April 2017, American Express announced that it had updated its natural-language chatbot for Facebook Messenger. The Amex bot for Massager allows customers to receive on-demand answers related to their account and card information. The updated chatbot was designed based on frequently asked questions by American Express card members. The original Amex bot for Messenger was launched in August 2016.


In April 2017, Wells Fargo announced that it has started to test a natural-language chatbot that could communicate with their customers on Facebook’s messaging platform. The pilot project involved testing by several hundred employees and a few thousand customers. The chatbot is capable of telling users how much money they have in their accounts and where the location of the nearest bank ATM. The chatbot has not been named.


In September 2017, Citi Singapore launched Citi Bot, a natural-language chatbot on Facebook Messenger. Singapore was the first market for the launch of Citi Bot. During the initial launch, the chatbot was capable of providing account-specific inquiries, credit card bill summaries, and answering frequently asked questions. Citi Bot was first made available to Citi Singapore's beta testing community, which consisted of around 600 Citi customers and employees.


TD Bank has implemented voice recognition technology at its customer call center. The TD VoicePrint creates a ‘vocal fingerprint’ by reading 150 different characteristics of a customer’s speaking patterns. After their voice print is captured, customers could phone in, and their identities are verified with their voice prints instead of by answering security questions. The system does not record the voice itself or store any kind of voice biometric that could be stolen.


In March 2017, HSBC launched a voice biometric identity verification for phone banking in Hong Kong. To use this service, customers would first need to enroll by calling up a hotline and say a phrase three times in English, Cantonese or Putonghua (Mandarin) so that the bank can record the ‘voice print.’ After the enrollment is successful, the customers would be prompted to say a sentence to verify their identity when they do phone banking. The service was first launched in Britain in 2016.


In conclusion, Bank of America, Capital One, American Express, Wells Fargo, and Citi Singapore have developed chatbots/virtual assistants that utilize natural-language technology to communicate with customers. In 2017, TD Bank and HSBC (in Hong Kong) started to use voice recognition technologies to identify their customers at its customer call center and phone banking service respectively.

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Conversational Commerce: The implications for financial services.

Advancements in AI (artificial intelligence) and NLP (natural language processing) have made interactions with technology more conversational and human. Conversational Commerce uses AI-infused technology to engage consumers in natural and conversational manner. Hence, it's no surprise that Conversational Commerce is the talk of the town. Everyone from Online Retailers to Banking Institutions has jumped on the wagon.

There is a strong incentive for businesses to enable such conversations and many financial service institutions like Mastercard, Citibank, Lloyd’s Insurance are already exploiting the potential of Chatbots. Research reveals that most banks are looking at using automated chatbots to handle a significant volume of customer conversations in the near future.

A Chatbot is a computer program that can conduct a conversation via audio or text.


Gartner predicts that by 2020, customers will manage 85% of their relationship with an enterprise without interacting with a human. While on one hand financial services stand to gain by the deployment of Conversational Commerce technology, on the other there are aspects to be wary about before jumping in. Below mentioned are five negative and five positive implications for financial services.

Negative Implications
1. A customer using a chatbot may be left annoyed, upset, or even scared, if the interaction regarding his/her money is problematic or incomplete.

Institutes will have to be extremely careful as to not apply AI in situations where it isn’t appropriate, or where the technology isn’t ready to handle the complexity of queries. If users have a poor experience, they may choose to not interact with bots, ending the use of a promising technology.

2. Some potential issues include performance, scalability, and especially security.

A chatbot may require access to user credentials, profile information, and even enterprise data, in order to perform useful functions. Hence, enterprise data security will always be a challenge.

Further, with this technology being implemented, users too will have to be assured that their privacy is protected.

3. Financial Institutions will be rendered vulnerable if Technology Companies decide to make a move into Financial Services. A third of Millennials believe they will not need a bank at all in the near future, while 73% claim they would be more excited about financial services offering from Apple, Amazon, Google or PayPal than from their bank.

4. Another challenge would be, how to protect the vast amounts of data generated by such numerous and fast-paced conversations. As technology and processes improve, the amount of data being generated will increase and so will the issues pertaining its storage and protection.

5. It may result in lack of loyalty. Loyalty may go to brands that will make things easy, while personalize and contextualize the experience.
Further users who primarily interact through a messenger may start to see institutions as just a back-end service provider, resulting in a lack of loyalty to their financial services organization.

Positive Implications
1. Conversational Commerce will protect against the mis-selling of financial products. Chatbot doesn't receive commission and will consistently adhere to regulations, policies, and practices. Chatbots could also help in achieving full transparency.

2. Leveraging the power of artificial intelligence, unprecedented engagement and establishment of relationships is possible. Further, chatbots are a simple, lightweight solution to a host of legacy banking problems.

3. If a chatbot struggles to deliver a service that a customer demands, or is unable to carry out a certain request, humans can still seamlessly take over the conversation. Such processes will improve a company's confidence in rendering Conversational Commerce services and will also improve the overall experience of customers.

4. It will remove the need for multiple, dedicated apps. Chatbots are conversational, so a customer doesn’t have to learn a new interface or navigate menus.
Using chatbots a customer can transfer money, chat with his/her friends, order food, and get a taxi ride all without leaving their favorite messaging app.

5. Making Chatbots part of Omni Channel Strategy offers many benefits because customers expect personalization & proactive notifications and chatbots may also need human assistance.

As aforementioned, if care is taken and proper planning is done, there are many upsides of implementing Conversational Commerce in financial services. Ultimately, and not just in financial services, natural-language interactions will become the norm in terms of how people expect to interact with technology.
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Invisible Payments: The key drivers of this space as it applies to financial services.

Invisible payments, as well as near-Invisible payments, have become a reality with the advancement of technology in recent years. The development of Application Programming Interface (API) banking apps as well as digital wallets, blockchain technology, and intelligent chatbots has helped make invisible payments possible. In addition to the previously mentioned advancements, wearable technology like Disney's MagicBand, Samsung Gear, and Apple Watch can also be used to make payments.

Mastercard is one of the financial companies on the forefront of integrating invisible payments. In late October 2017, Mastercard began offering the ability to send money over blockchain, which is similar in concept to bitcoin. It was developed as an alternative payment method that can become more efficient. IBM has also started using its own proprietary blockchain between banks in the South Pacific.

In the more traditional sense, Mastercard has recently unveiled a suite of APIs that give the user the ability to view all of their credit and debit cards across various digital platforms in a single view. Users are allowed to view but also deactivate cards and set spending controls for each device.

Venmo is one of the more popular payment apps among millennials and is pushing towards the idea of becoming a full-service digital wallet. In October, the company branched out to approximately 2 million merchants to allow users to pay for goods and services. The goal, according to Ben Mills, Venmo's head of product, is to reach a point where Venmo can be used to buy or pay for anything. Mills also mentioned to Yahoo! Finance that users may be able to use Venmo in brick-and-mortar stores in the future.

In many ways, Zelle is a response to Venmo by many major U.S. banks. The payment service has been backed by more than 30 U.S. banks, including Bank of America, Chase, Wells Fargo, and Citibank since launching in June 2017. One of the main differences between the two apps is bank transfers. Zelle is truly an invisible payment in the sense that money instantly leaves one users bank account and can be withdrawn from the app within minutes. This is possible because Zelle has banking partners. Venmo, on the other hand, often takes at least 24 hours to complete a bank transfer. Venmo's parent company, Paypal, has created an instant withdrawal capability for a fee of 25 cents per transaction.

In China, Alipay, a "lifestyle-driven app with commerce capabilities," has taken the payment effort to the global level. The app, which has an estimated 520 million active users, now supports payments in 27 currencies in 30 countries. Alipay has partnered with multiple payment providers, including First Data, Verifone, Payworks, and Stripe, to move outside of China. The partnership with Verifone also allows Chinese travelers to pay for taxis in North America.

Samsung Pay is another version of a digital wallet and, in some respects, acts as an update from Apple Pay or Android Pay because of Samsung's partnership with PayPal. Users can pull from their PayPal balance by using a virtual PayPal card to make transactions at brick-and-mortar retailers in the United States. Samsung Pay also allows users to add other credit and debit card, including the recently added Discover card. Additionally, Samsung Pay uses a magnetic secure transaction technology which allows users to use funds at payment terminals that lack NFC functionality.

Samsung and Apple both offer watches that work with their respective Samsung Pay and Apple Pay but another player in this field is Disney with their MagicBand. It functions as a key to a Disney Resort hotel room, allows users to enter theme and water parks with admission tickets and can also be connected to credit cards in order to charge food and merchandise purchases.

Artificial intelligence software allows certain apps and programs to seamlessly interact with various payment methods. For example, the PayPal bot has been integrated to Facebook Messenger, Siri, and Slack, allowing users to send money instantly to another peer. Additionally, companies like Hipmunk use Facebook Messenger to book and pay for hotels with the linked credit or debit card on Facebook. Other chatbots can facilitate peer-to-peer payments via text messaging by using various mobile wallet balances.

Mastercard teamed up with Kasisto for Mastercard KAI and Bank of America's Erica both allow users to make payments, check balances, and pay down debt by looking at financial decisions and reviewing purchases via artificial intelligence. Capital One offers similar services with its chatbot.

AI can also help businesses save money by replacing or limiting the use of call centers. T-Mobile, for example, was able to save 48 percent in customer care costs by using messaging and bots as opposed to customer voice calls.

Survey data from Viewpost shows that Americans expect further technological advancements to play a part in payments in the near future. According to the survey data, 50 percent of Americans believe fingerprint technology will be used to authenticate payment information in the next 10 years; 35 percent of Americans believe facial recognition will be key authentication technology for payments in the next 10 years; 31 percent believe retinal scanning will be viable technology for making and receiving payments and 18 percent expect to use voice control. Though these numbers are purely based on what Americans believe are in store for the future and are not in active use at the present, the data provides an insight for what may be in store.

Technology influences many facets of life and has become a major part of efficiently making and receiving payments. By using artificial intelligence, digital wallets, and wearable technology, consumers are now able to make invisible payments almost instantaneously. These developments extend to the online and offline world, functioning in every sense from peer-to-peer payments to purchases in brick-and-mortar stores.
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Invisible Payments: The key players, as they apply to financial services.

A recent study estimates that invisible payment technologies will process $78 billion in transactions by 2022 and will be present in over 5,000 retail outlets. Key players in this industry include Amazon, Google, Barclay, OpenTable, and Mercedes. Their innovations and investments include a cashierless grocery store, a completely hands-free payment app, and a payment-free dining experience. Despite extensive searching, I could not find specific examples of incubators supporting invisible payment technology development. Moreover, I could not find any specifics on venture capitalists investing in these technologies, although I've identified several companies investing in the space, as you'll see below.

key players

Amazon Go: A new concept from Amazon, Amazon Go is a brick-and-mortar store opened by Amazon in Seattle. In this store, customers have a completely cashierless experience. When the customer enters the store, they scan their smartphone, and then a series of machine learning-based cameras and shelf sensors tracks the customer while they're in the store. The sensors note any products chosen by the customer, and charge the customer's Amazon account for those products when the customer leaves the store. Algorithms total the order and charge the bill. The store sells ready-made food and grocery staples. With Amazon's recent purchase of Whole Foods, analysts expect that some version of this technology will evenutally be implemented at Whole Foods stores.

Google Hands Free App: Google has been developing an app for in-store invisible payments. It's currently running a small pilot program in select Silicon Valley stores. Customers can pay hands-free using Bluetooth low-energy, Wi-Fi, and other sensors. The customer does not even need to open the app to make the transaction. Unlike Amazon Go, however, the customer does have to go through the checkout line to verify their identity with the cashier and indicate their wish to pay with Google Hands Free.

Grab + Go: Barclay has invested in invisible payment technology through the development of Grab + Go, an invisible payment app. This app enables the customer to scan their items as they shop and then pay for everything with a single click. The receipt for the purchase is stored in the app. The app is currently being trialled at stores in the UK.

OpenTable Tab: Another app using Bluetooth low energy technology, OpenTable's Tab app enables invisible payments at restaurants. The app automatically charges the customer's card, stored in the cloud, for the bill. The customer need only give their name to the waiter. According to the OpenTable website, "simply tap the Tab feature when you book your reservation at a participating restaurant. Once you’re at the restaurant and ready to leave – or at any time during their meal – you can let your server know you want to put your meal on your OpenTable Tab and then get up and go whenever you’re ready."

Mercedes: In January of this year, Mercedes invested in invisible payment technology by purchasing the mobile payment startup PayCash. Through this acquisition, Mercedes will develop an invisible payment system for its subsidiaries Car2Go (car sharing) and mytaxi (taxi app). The implementation of invisible payments for these services will make them more competitive with Uber, which is known as being one of the first companies to successfully implement invisible payments, one key to the company's success.


To wrap up, key players in the invisible payments space include Mercedes, OpenTable, Barclay, Google, and Amazon Go. Their innovations include a cashierless grocery store, a completely hands-free payment app, and a payment-free dining experience.

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Invisible Payments: Key competitors and what they are doing, as they apply to financial services.

Invisible payments are defined as any innovation or technology which reduces the number of steps involved in completing a transaction. This includes preloading cards, digital wallets, wearable technology and covers both on- and off-line payments. Many financial services have been investing in such technology to increase seamless payments for consumers.


There are seven banks that have made considerable advancements in the invisible payments segment, through digital wallets, wearable technologies, NFS points, contact-less payments and acquisitions of third parties involved in invisible payments, such as WePay.

What follows is a breakdown of the latest invisible payment trends among these seven major financial service providers.


Invisible wallets contribute more value by making payments less intrusive. Traditionally, payments have been tiresome transaction processes. As consumers head toward more instantaneous lifestyles, invisible payments remove almost all action on the consumer's part. In October 2017, JPMorgan Chase bought payments startup, WePay. It is the first financial technology acquisition the company has made. Matt Kane, CEO of Chase Merchant Services Investments said, "We are powering payments for growth, so businesses can accept payments instantly, get paid faster, and never lose a sale." While JPMorgan didn't release the amount paid for WePay, the Wall Street Journal predicted the price at well over $220 million. WePay is currently used by GoFundMe, FreshBooks and Constant Contact, so this acquisition is monumental for JPMorgan.

Many financial institutions have increased interests in fintech acquisitions. In August, credit card processing firm Vantiv acquired Worldpay for $10.4 billion, and PayPal has reported its interest in payments companies Square, Stripe and Adyen.


Invisible payment experiences are becoming a consumer expectation rather than a must. 60% of consumers said they want quicker and more efficient payments. 44% said they prefer automatic payments, like those of Amazon Prime Now, where check out is not required. By 2020, payments using wearable devices are expected to increase to $501.1 billion and Gartner predicts 21 billion devices will be connected to the internet in the same year.

Visa has introduced Visa Token Service, currently being used by Fitbit Iconic and Garmin. This not only creates invisible payments for consumers but makes these payments secure through innovative technology. Visa has also introduced Visa payWave; a contactless payment technology that allows consumers to use cards and mobiles without swiping, signing or a pin. They use Near-Field Communication (NFC) technology or radio frequencies. This new invisible payment technology increases turn around time for payments and boost consumer loyalty. In the US, credit card purchases average $66, with cash purchases sitting at $17. This shows that card transactions are almost double.


In February 2017, Bank of America introduced Zelle, an industry-leading, person-to-person technology that is used on its mobile banking app. This invisible payment technology allows users to easily send, receive, or request money from anyone in their existing contact list regardless of where those contacts bank. Bank of America continued adding mobile enhancements all through 2017. These include the ability to add cards to their digital wallet via the mobile banking app and to add cards for services such as Visa Checkout and MasterPass. Erica, an intelligent virtual assistant, was rolled out at the end of 2017 to further assist mobile app users.

DBS bank

DBS Bank launched PayLah in June 2017. It was created by DBS Bank's UX & Design team, lead by Nicholas Tan. He highlighted the main problems with payments as going to ATMs and getting bank account details to make simple transactions. Tan said, "That’s why we conceptualized a way for people to make transactions just through their phone numbers, instead of going through the usual process of using fund transfers." PayLah, a new digital wallet, allows users to simply scan a QR Code in order to make a payment. They can receive money or auto debit when their balances are low. DBS also introduced branch-less banking in India.

Bank of the west

In February 2017, Bank of the West announced tie ups with 5 digital wallets, namely: Apple Pay, Android Pay, Samsung Pay, MasterPass, and Microsoft Wallet. Paul Appleton, vice president, said, "To help customers pay their way, we provide every major option available on the market today, for a simple and secure way to pay using a phone." Customers are now able to make payments with the tap of a button. Consumers are rapidly adopting mobile payments both in-store and online, said EVP of the bank. Mobile payments exceeded $220 billion by the end of 2017. Bank of the West also partnered with Fiserv and Early Warning's Zelle SM Network. This revolutionary industry alliance allows Bank of the West to offer person-to-person payments that helps clients pay family and friends, regardless of who they bank with, in real time. Zelle's new technology can only be accessed with a PIN or fingerprint, giving consumers greater security.

Wells Fargo & company

Wells Fargo & Company announced in October 2017 that debit card users would be able to use ATMs without their cards. Using Near-Field Communication, like Visa, allows clients to simply "tap and pay". They will be launching this technology at more than 5,000 ATMs in the US. 40% of Wells Fargo ATMs are equipped with NFC capabilities. Their goal is to upgrade more than 13,000 ATMs with the hardware by 2019. Wells Fargo released a one-time access code with the launch of this technology that resulted in three million card-free ATM access code transactions. The Company also has connections with Apple Pay, Android Pay and Samsung Pay, as well as their own mobile wallet Wells Fargo Wallet for Android. Customers can initiate ATM transactions using these mobile wallets. All customers need to do is sign in, hold their phone or wearable device near an NFC-enabled ATM, and they can begin the transaction.

Morgan Stanley

According to Morgan Stanley, about 32% of millennial and 25% of Gen X use P2P payments. Much like other financial service institutions, Morgan Stanley uses Zelle to give wealth management clients the ability to use once touch cash transactions. Morgan Stanley Send Money with Zelle was added to the mobile app in November 2017. The mobile app now allows clients to login with Touch Id, access their portfolios, quickly send and receive money, pay bills, deposit checks and transfer funds.


Major financial institutions are rolling out invisible payment technology to create seamless payments for their clients, which has resulted in increased sales and brand loyalty. Companies like JPMorgan, Bank of America, Bank of the West, Wells Fargo and Morgan Stanley have all invested in third party invisible payment technologies like Apple Pay and Zelle. On the other hand, Visa and DBS Bank created their own wallets that can be used with mobile and wearable device apps. It is clear that financial institutions are not only buying into invisible payments but are actively involved in developing the technology.
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Invisible Payments: The implications for financial services.


There are four opportunities that are presented by invisible payments being used more frequently by financial institutions: higher customer retention, savings on employee wages and bank cards, the increase use of loyalty programs, and the ability to collect consumer financial data. Additionally, there are also some concerns to consider with the rise of invisible payment methods: security risks for the financial institutions that these methods are linked to; attracting new customers may become more challenging; and brand recognition may become more difficult for the institutions in question.

Customer Retention

After filling out their personal information on an invisible payment app, financial companies see an increase in customer retention because of an increased ease of access. It is more likely that customers will stick with the method that they already filled out and use frequently.

According to Serena Smith, financial institutions will be challenged to gain a "top-of-wallet status" with new and existing consumers as these methods of payment become more popular. Additionally, the attractive notion of carrying less cash or credit cards everywhere will help in the retention of consumers because invisible payments are less burdensome and cannot be lost like a physical wallet.

Cost Savings

There are several cost savings benefits that come with invisible payments with one of the most prominent being a reduced need to issue physical credit cards. Without having to manufacture, distribute, and advertise physical credit cards as much, it is logical to assume that financial institutions will save money on manufacturing and shipping these cards.

Additionally, money can be saved in terms of the number of man-hours worked by employees. For example, payment apps like Dash, Reserve, and Tab strive to make eating at restaurants easier by eliminating the need for a server or bartender to physically attend to patrons. Instead, customers are able to pay for food on an app or be billed later on. Location-based beacon technology allows payments to become more seamless than swiping a credit card, then waiting for payment to go through while interacting with employees.

Loyalty Program Integration

The rise of loyalty programs is yet another boon for financial institutions in the emergence of invisible payments. While loyalty systems are not new to consumers, making them easier to use with invisible payments certainly makes them more attractive. Some apps, like Alipay, offer their users incentives to use their app in the form of discounts and special offers as their form of a loyalty program. Additionally, the use of loyalty programs and being able to prompt customers to use their loyalty points becomes easier with the innovation of point of sale (POS) beacons. Customers who are near a store with this technology will be prompted to shop, use their loyalty points, and will earn more points upon leaving the store. This makes loyalty programs more useful to brands. Customers enjoy the apps because the active location data will remind them about their loyalty perks.

Access to Increased Consumer Data

Consumers are reliant on their smartphones to the point where collectively, American smartphone owners check these devices around 9 billion times per day. Invisible payment methods offer companies a better look at their customers' habits. For example, they can analyze consumer data around what people do on their smartphones or what locations they frequent. Invisible payment fit into our mobile lifestyles and do not cause concern to consumers. Access to consumers is more readily available as well, with the aforementioned POS location data able to reach out to consumers at will, allowing businesses to change "mobile moments into commerce moments."


While all the aforementioned benefits of invisible payments are certainly attractive, it is also important to consider the concerns these payment methods raise as well.

First, and perhaps most importantly, there are significant security risks involved in such frequent exchange of personal and financial information via invisible payment methods. Financial institutions run the risk of compromising their businesses, while consumers themselves are concerned that their personal and financial information is vulnerable to being hacked or stolen. While technology companies themselves must focus on making invisible payments as easy and painless as possible, financial institutions must do the legwork when it comes to protecting their customers, as well as their own capital, from malicious hacking.

Additionally, it may become more difficult to reel in new consumers with the advent of invisible payments, perhaps due to difficulties with maintaining brand recognition as physical credit cards disappear. Since, as it was mentioned previously, customers will be content to enter a card number once and continually use a service. This will lead to the question of how do institutions draw in new consumers from a world of people already satisfied with their method of invisible payment?

Additionally, the fading and perhaps eventual disappearance of a physical credit card removes a method of advertising for financial institutions. Many financial institutions are defined by the way their card's "vanity" aspect: the logo, the color, and the status symbol that certain cards appear to have. Without these subtle advertising methods, it becomes that more difficult to maintain brand recognition and attract new consumers.


The rise of invisible payments presents amazing opportunities for financial institutions: higher customer retention, cost savings on employee wages and bank cards, increase use of loyalty programs, and increased access to consumer data. However, as with any beneficial innovation, there are also some concerns to consider, such as security risks for the financial institutions that invisible payment methods are linked to, as well as encountering new difficulties in maintaining brand recognition and drawing in new consumers.
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Artificial Intelligence/Effective Machine Learning: The key drivers of this space as it applies to financial services.


The biggest drivers of artificial intelligence and effective machine learning as they relate to financial services are to increase overall productivity via gaining unlimited access to computing power, growing big data, meeting consumer demand as it fluctuates, and complying with regulations as they apply to financial services. Because "finance work is incredibly data heavy," these drivers go hand in hand with artificial intelligence and machine learning, as each helps these aspects of financial services become more streamlined and effective.

Unlimited Access to Computing Power

A major driver of artificial intelligence and effective machine learning in financial services is the slow build toward unlimited access to computing power. Because the structure of financial services, according to Dr. Christian Westermann, is "quite complex," implementing artificial intelligence and effective machine learning "offer a means of increasing productivity and streamlining those aspects of the sector." The use of Cloud storage by the public was "estimated to reach almost US$70 billion by 2015 across the globe." This is key because of how machine learning "allows computer programs to automatically learn without explicit programming" and thus increase the effectiveness of its services, thereby increasing overall productivity. Additionally, businesses like iZettle and Ant Financial "understand the importance of using machines to accomplish mundane tasks considered tedious to humans," thereby maximizing their usage of technology as well as their productivity.

Growing Big Data

In a world that is continuously digitizing and connecting, the growth of data has been strong and constant, with a "Compound Annual Growth Rate (CAGR) of more than 50 percent since 2010." Additionally, according to Barry Smyth, a professor of computer science at University Dublin College, "data is to AI what food is to humans" in other words, AI consumes data to expand and become more efficient and productive, and in a world moving toward digitization, "the exponential growth of data is constantly feeding AI improvements." In spite of these assertions being quite broad and related to the general technological world, it can be assumed that this is also applicable to the financial sector, considering at their core, the technology is very similar.

Changes in Consumer Demand

In every industry, consumer demand is in a constant state of flux, and financial services are no exception. Customers want individualized attention and service; nearly "80% of US customers believe that the quality they value the most in customer service is the notion that the company values their time." Due to the vast importance of consumer experience and demand, it is expected that "by 2020, customer experience will overtake price and product as the key brand differentiator." As far as financial services are concerned, perhaps the best example of how machine learning and artificial intelligence are applied are automated financial services. The implementation of artificial intelligence "has [...] improved service at ATMs, online claims processing, mobile payment systems and cybersecurity," thus contributing to the effort of making consumers feel more valued and better served.

Compliance with Regulations

According to research fellow at the MIT Sloan School's Initiative on the Digital Economy Michael Schrage, "AI will most quickly enter the industries that are the most well regulated." As it stands, the progress of implementation of AI initiatives "is most advanced in telecom, retail and banking," making it safe to assume that financial services are already well-regulated and that existing AI initiatives make sure to comply with these regulations. To build upon that assumption, it has been asserted that "AI itself can be used to better match external demands coming from regulators with internal policies and procedures." Additionally, because "AI can play a significant role in the effective and consistent execution of repetitive, process-driven activities in compliance," it can be concluded that successful AI initiatives are developed to directly and effectively comply with industry regulations.


In order to provide more streamlined and effective service, financial services must rely more on artificial intelligence and machine learning in the areas of gaining unlimited access to computing power, growing big data, meeting consumer demand as it fluctuates, and complying with regulations as they apply to financial services. To remain relevant and productive in a world hurtling through constant digital changes, financial services must pay attention to the rise of AI and machine learning not to let those things overtake their institutions, but to let them assist in crucial areas so they are not left behind.
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Artificial Intelligence/Effective Machine Learning: The key players, as they apply to financial services.

The key players that are involved in investing and innovating AI/effective machine learning are Morgan Stanley, UBS, Baillie Gifford, Bank of America, Wells Fargo, BNY Mellon, Citi Corp, and JPMorgan. The top six Venture Capitalists companies investing in AI, according to Crunchbase, are Basis Set Ventures, Gradient Ventures, Loup Ventures, Matadero Capital, The Transportation Lab - Comet Labs, and Cognitive Venture. A complete analysis will follow.


We looked into the biggest banks and investment companies and what they are doing in terms of innovation. According to a report by Crunchbase, AI and machine learning were hot topics among Venture Capitalists and a lot of money was invested in it, most of it undisclosed.

We searched for the top AI investor seed funds on Crunchbase and found the top six Venture Capitalist companies investing in AI are:
1. Basis Set Ventures (>$18 million raised)
2.Gradient Ventures (>$12 million raised)
3. Loup Ventures ($3.45 million raised)
4. Matadero Capital (~$1million raised)
5. The Transportation Lab - Comet Labs (N/A)
6. Cognitive Venture (N/A)

Total spending within AI in the financial sector hit $1.68 billion in 2017. Baillie Gifford and JP Morgan are among leaders in innovation in machine learning and AI, as applied for mutual funds and investment. According to the Financial Times, Baillie Gifford is looking to use machine learning to boost the performance of its funds. The company looks to use AI's proficiency on fund performance and automation of everyday tasks.

AI is emerging in the banking sector, as banks like Bank of America, Wells Fargo, BNY Mellon, and Citi are investing into AI. The article mentions that the future of finance with heavily include emerging Fintech and AI and it will increase competition among finance industry giants.

In the JP Morgan's annual report, the company commits to incentives regarding AI in the next few years. Both machine learning and AI are mentioned as technologies in which they are heavily invested in. For example, JP Morgan recently launched an AI program called LOXM that will apply AI technology to real-time trades. The results of the program have seen quick success. According to Business Insider, "LOXM delivered significant savings and far outperformed both manual and automated existing trading methods in trials after studying billions of historical transactions to enable it to execute equities trades at maximum speed and at optimal prices, and to offload large equity stakes without causing market swings."

At Bank of America, they successfully launched an AI bank assistant named Erica, a chatbot, who leverages "predictive analytics and cognitive messaging" for financial guidance.

Similarly, Wells Fargo introduced AI for Facebook Messenger. It is a customer-driven chat experience "part of the company's innovation agenda." The bot focuses on incorporating the financial sector into environments where the customers already are. The Bank of New York Mellon Corp uses over 220 bots for efficiency and lower costs, mentioning it cuts down on mundane tasks and saves $300,000 annually.

Another way financial institutions are using AI is for cybersecurity. Tech startup Feedzai partnered with Citi to advance the safety of their customers and banking through AI technology.

Morgan Stanley is also taking a different approach to incorporating AI into their banking practices. Their algorithm is called the "next best action," which is reported to "suggest trades, take over routine tasks and send reminders when your birthday is near." This algorithm sends employees different recommendations for market changes and life events in a multiple-choice format. The idea is to create a best-case scenario for the client.

Finally, Swiss investment bank UBS developed a program of robotics and AI with Deloitte, which scans for emails sent by clients about block trades. The AI takes this information and then executes the necessary actions. They are also implementing an algorithm that involves machine learning, which develops strategies for trading volatility for its clients. It receives all of this information from data and building a strategy from market patterns.


As more companies and industries are investing in machine learning and AI, technology continues to increase, especially in the financial sector. These advancements will increase performance, understanding, customer experience, and more.
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Artificial Intelligence/Effective Machine Learning: Key competitors and what they are doing, as they apply to financial services.

Over the past year, JPMorgan, BNP Paribas, Bank of America, and HSBC have launched or planned to launch artificial intelligence tools that would improve the effectiveness of their operations. Wells Fargo and TD Bank have set up AI labs in 2017. Capital One has acquired Notch, a machine learning firm in January 2018. Below, I will present an analysis on what JPMorgan, BNP Paribas, Bank of America, HSBC, Wells Fargo, TD Bank, and Capital One are doing in the artificial intelligence /effective machine learning domain as it applies to financial services.


In August 2017, JPMorgan announced that is has developed an artificial intelligence system that applied algorithms to make equity trading more efficient. The bank has been testing the LOXM AI program in Europe since the first quarter of 2017. The program was “trained on billions of historical transactions to enable it to execute equities trades at maximum speed and at optimal prices, and to offload large equity stakes without causing market swings.” JPMorgan has claimed that the LOXM would offer significant savings and has outperformed both manual and automated existing trading methods during the trials.


In October 2017, BNP Paribas launched Smart Chaser, an artificial intelligence tool that would “boost its trade processing services and increase efficiency in the trading system.” The trade matching and predictive analysis tool is capable of identifying trades which may require manual intervention, based on historical data. The tool could also predict the likelihood of delayed trade matching. BNP Paribas has claimed that the tool has achieved around 98% prediction accuracy.


In August 2017, Bank of America launched Intelligent Receivables, a tool that uses artificial intelligence to “help companies vastly improve their straight-through reconciliation (STR) of incoming payments to help them post their receivables faster.” Intelligent Receivables is powered by HighRadius, a fintech enterprise SaaS company. The tool would help large companies reduce costs, decrease days-sales-outstanding, and improve cash forecasting and their end-customer experience. Intelligent Receivables is suited for companies that “manage a large volume of payments where the remittance information is either missing or received separately from the payment.”


In August 2017, HSBC and IBM announced that they had developed a cognitive solution to automate and digitize trade finance documentation. The solution utilizes “IBM robotics technology to analyze documents, digitizing and extracting the relevant data before feeding it into HSBC’s transaction processing systems.” HSBC has started using the tool to analyze English-language import and export bills. The solution is capable of reading documents in Chinese, French, and Spanish and is already in use in Hong Kong and the UAE.


In February 2017, Wells Fargo announced that it had established the Payments, Virtual Solutions, and Innovation (PVSI) group. The goal is to “help increase connectivity for the company’s payments efforts, accelerate opportunities with artificial intelligence, and advance application programming interfaces to corporate banking customers.” Artificial intelligence is one of three areas that the PVSI group would be focusing on. A new Artificial Intelligence Enterprise Solutions team has been created to lead the group’s effort in the area of AI.


In July 2017, TD Bank announced its intention to be a “bank of the future.” The bank planned to hire 1,000 technologists, including data scientists and artificial intelligence experts to meet its goal. TD Bank also has labs in Communitech and in Cisco’s Toronto innovation lab for designing and testing new products. The bank is also a partner of the Vector Institute, a “collaboration between the University of Toronto, the government of Ontario and the government of Canada around artificial intelligence and machine learning.”


On January 5, 2018, Capital One announced that it had acquired Notch, a data consulting company based in Richmond, Virginia, for an undisclosed amount. As part of the deal, the 16 employees of Notch would join the bank’s Center for Machine Learning. The center was established in 2016. Capital One has also launched a new lab at University of Maryland College Park.


In conclusion, over the past year, JPMorgan, BNP Paribas, Bank of America, HSBC, Wells Fargo, TD Bank, and Capital One have made several investments in the artificial intelligence/machine learning space as it applies to financial services. These banks have either launched AI tools, set up AI labs, or acquired machine learning firms.

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Artificial Intelligence/Effective Machine Learning: The implications for financial services.

I have found that security, customer-facing activities, the bank manager as AI, trading and portfolio management and asset management, and regulatory compliance and supervision are all big implications relating to the use of AI and machine learning in the financial services. In addition to this, the safety of collecting and analyzing data with AI and the reliability of AI and machine learning applications are acting as barriers to the full adoption of AI and machine learning by the industry.


1. Security:
Currently, natural language processing, image recognition, and machine learning are areas of artificial intelligence that are being used to solve security issues within the financial industry. For example, Anti-Money Laundering (AML) and fraud detection involve complex data, detailed workflows, and significant human involvement, making it a difficult problem to solve. However, machine learning is currently being developed to process data from multiple sources in a way that produces real-time authentic/fraudulent classification of each transaction that passes through the system. In the future, we can expect a heavier use of AI in security measures in the financial industry.

2. Customer Facing Activities:
One insurance company, Ping An Insurance Co., has already developed and implemented an AI-based face-recognition tool that issues out loans online within 3 minutes using a combination of this face-recognition tool and a customer scoring system. In the future, AI face-recognition tools could become a more commonplace part of financial services as they are faster and more accurate than alternative human capabilities. Given the fact that in the coming years all cameras could have the functionality of face recognition, this offers a whole new data set for AI to utilize.

Financial institutions are also using AI in the form of voice recognition in order to save time verifying identity when customers make a phone call. This voice recognition technology is continuing to develop for its use in the financial services and it can now utilize real-time sentiment analysis of voice data to understand when a customer is getting frustrated or angry.

Chatbots are also another application of AI in the financial industry which we can expect to see grow, mostly because they have the impact of lowering the cost of customer support.

3. The Bank Manager as an AI:
In the financial sector, AI is going to be increasingly used over the next 5 years with, the result of revolutionizing the industry. AI is replacing humans in order to accomplish the tasks of a bank manager more efficiently and more successfully. This is already taking place; for example, there are robo-traders which use AI to buy and sell stocks, and as discussed above, AI is being used for fraud detection. AI is also being used to "make predictions about customers’ behavior, which can then be used to push certain products, reduce churn and create market insights for product and brand development. For example, financial institutions are collecting new data sets, from sources such as social media, in order to understand their customers better. In the future, we can anticipate more everyday tasks being completed with the help of AI. Wherever accuracy and speed matter, we can expect AI to step in.

4. Trading and Portfolio Management and Asset Management:
AI and machine learning are already being used in trading and portfolio management. They are being utilized to devise trading and investment strategies, improve trading firms' ability to sell to clients, pro-actively manage risk exposures, and identify new signals on price movement in portfolio management.

Machine learning is also being used in asset management in order to reduce operating costs and comply with regulations. "Asset managers are using predictive analytics to generate investment ideas or as an early warning system for assets at risk." Asset managers are looking to machine learning in order to discover unique insights that are beyond the scope of human abilities.

5. Regulatory Compliance and Supervision:
Currently, AI and machine learning are being used by the financial industry in order to meet regulations of governing bodies, this has led to a subset of the industry known as RegTech. This segment of the market is expected to grow rapidly over the coming years, reaching $6.45 billion by 2020.

The growth in RegTech is mostly due to the increasing pressures being put on financial institutions by their regulators. They are now expected to be using sophisticated solutions to tackle fraud and other criminal behaviors.

The use of AI in the financial sector is already becoming increasingly sophisticated. However, to achieve this, financial institutions must collect and acquire sensitive data. This has led to a number of potential risks in the use of AI in financial services. For example, hackers are also beginning to use AI in order to target financial institutions and gain access to the sensitive data that they hold.

In addition to this, there is the concern that financial institutions are holding off on adopting AI. Data shows that only a small percentage of companies have already extensively incorporated it. The reason for this may be related to the potential risks of use of AI in financial services. For example, it has been found that new trading algorithms based on machine learning may actually be less predictable than the previous rule-based applications. Other risks include the emergence of new systemically important players who fall outside the regulatory perimeter due to network effects and scalability of new technologies. In addition to this, it is also considered that AI and machine learning methods may produce data that is difficult to interpret and act on.

However, it seems that the future of AI and machine learning in the financial industry is safe. Most banking providers agree that this sort of technology will have a significant impact on the industry in the coming years, and 37% believe that its impact will be significant in just 2 years.

Overall, I have found that security, customer-facing activities, the bank manager as AI, trading and portfolio and asset management, and regulatory compliance and supervision are all big implications relating to the use of AI and machine learning in the financial services. In addition, I found that companies are wary of the reliability of applications that use AI and machine learning, and there is also concern for the safety of data due to the increasing use of AI by hackers.
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Future of Augmented and Virtual Reality: The key drivers of this space as it applies to financial services.

Augmented reality (AR) and virtual reality (VR) are revolutionizing almost every industry. In the financial sector, financial tech companies are looking for ways to integrate AR and VR into their business strategies so they don't get left behind. Fintech companies want to use the technology to provide an immersive customer experience, to better visualize big data, to communicate with customers and promote their business, and to increase the security of financial transactions.



Market experts predict that by 2019 about two billion people will use mobile banking for financial transactions. Big data, machine learning, virtual reality and artificial intelligence have created a perfect storm, building and feeding off each other to produce smart and automatic programs for data analytics, language processing and identification. In order for VR and AR to become useful enough for widespread adoption, they need to be integrated skillfully with these other recent technological innovations, as well as with social media and big data. Financial companies will have to hone their organizational awareness, expertise and tech sophistication in order to successfully pull this off. As more and more companies begin to do this, according to [x]cube LABS, fintech companies should be lifted up by billions of dollars in the next few years. Albert Creixell of Samsung also notes that smartphones with better screens, higher resolution, and more powerful processors should increase the rate of adoption of these technologies by making them more useful.


Financial institutions can create apps that help educate their customers so they can develop healthier economic habits. Some banks have already started doing this. For example, Florida-based GTE Financial designed a 3D world where users can create an avatar and explore GTE's services, products, and financial literacy resources. The program provides customized individual suggestions as it gets to know its customers. BNP Paribas, meanwhile, created a virtual reality banking environment for their customers. Virtual reality also allows for the gameifying of stock market exchanges, which can make trading seem more fun and accessible.

Meanwhile, some banks are creating AR apps to help customers find the nearest local branch or ATM. They can see the location's distance as they walk to it, as well as real-time information, and they can also book appointments. Financial institutions such as Australia's Commonwealth Bank are integrating real estate data into apps that allow potential home buyers to see property profiles as they pass them.

Another possibility for future VR innovation is the concept of virtual bank tellers. Using an avatar and a virtual reality environment coupled with machine learning and artificial intelligence, financial institutions can potentially serve customers who can't visit an office in person. Virtual tellers may also reduce the cost of hiring personnel.


Citibank created a holographic workstation for its traders which combines both 2D and 3D visualization to show market trends. Their financial instruments are each represented by a color-coded sphere to help them better contextualize the hundreds of data points they view. VR can also be used to visualize and forecast cash flow, which 80% of treasurers and CFOs find critical.

Banks are also using VR and AR to recruit and train new talent. For example the Commonwealth Bank of Australia created a VR application for Google Cardboard to show potential new hires how agile the bank is in addressing customer needs.


Some financial institutions are creating fun games and live VR events for their customers to enjoy, in order to promote their brand through entertainment. Since financial topics are not normally perceived as being enjoyable, virtual reality and augmented reality provide a unique opportunity to banks by allowing them to craft fun and engaging experiences for their customers. For example, Citibank gave away 30,000 free virtual reality headsets so that customers could attend a live VR concert broadcast from Rockefeller Square. Wells Fargo created a virtual maze to entertain potential customers and increase brand awareness; users were able to run the maze on a treadmill while trying out technology from Oculus. Meanwhile, ATB Financial ran a contest to get inspiration for their virtual reality endeavors, dividing $1,600 in prize money between the top 82 responders.


Virtual and augmented reality provides banks with an opportunity to increase their security. One of the ways in which they are doing this is with biometrics. Samsung is working on integrating biometrics into its mobile apps for both its users and employees. Biometrics can potentially be integrated into virtual reality experiences to help increase the security of mobile transactions. Emerging blockchain technology can also potentially be integrated with VR and AR to improve the security of these media in the realm of financial transactions.


Banks are increasingly partnering with financial tech companies to develop virtual and augmented reality strategies, and to help carry their brands into the new technological era. VR and AR have a wide array of applications in the financial sector, from customer engagement and education to in-house operations. Financial institutions are pioneering technology and innovation in all of these areas, and as processing technology gets better and data analytics and artificial intelligence systems improve, the applications of VR and AR in finance will multiply. The companies that are able to hone their technical expertise and develop creative strategies for integration will profit greatly in the next few years.

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Future of Augmented and Virtual Reality: The key players, as they apply to financial services.

Some key investors in the AR/VR domain as it applies to financial services are Fidelity Investments (Fidelity Labs), Mastercard, Citi Group, Wells Fargo, BoostVC, Rothenberg Ventures, Vive X, Y Combinator, The Venture Reality, and Andreessen Horowitz. The top application of VR technology in the financial service space centers around marketing, data analysis, stock trading and analysis, advertising and customer engagement. I have provided more details in this spreadsheet. Below, you will find details on how I selected these companies.


Apart from financial service companies such as Fidelity Investments (Fidelity Labs), Mastercard, Citi Group, and Wells Fargo that are investing in the VR/AR space to develop products for their customers or better serve their customers, other investors in the space focus on VR/AR in general, and not specifically on the financial service segment. This is probably because only a hand few of ARs/VRs are specifically designed for the financial service segment(example, only 3 of the top 110 VR/AR startups listed by CB Insights have direct use (advertising/marketing) in financial services), however, some current AR/VR technologies designed for other purposes such as gaming have found use in financial services.
I started by providing the most active investors in the space that are specifically concerned about VR/AR that can be used in the financial service sector. In column D of the spreadsheet, I state current innovation or ways the company is using VR/AR and any future usage it is currently working on where such information is available. Then, I provided other top investors that have made investments in AR/VR in the financial service space or in VR/AR that could be used in financial services.
I relied on VR/AR most active investors lists from PitchBook, CB Insights, and Quid. From the lists, I only selected investors that have invested in VR/AR that have use in the financial service sector.
It is important to note that some other VR/AR that are used in music and gaming may be used in the financial service segment. An example is Oculus Rift, a VR headset that is used for gaming but is also used by Salesforce, a financial service company, "to create an immersive 3D environment for analyzing data."
In general, the top uses and innovations (and potential uses) of VR/AR in the financial service segment centers on data analysis, virtual trading, financial education, marketing, advertisement, and VR payments. I have provided more details on inventions and innovation by some of the investors in the space in column D of the spreadsheet where applicable. However, after an extensive search, the exact amount invested by those companies in VR/AR isn't available. This is because companies and VCs investing in the space don't publish exact amount invested in each deal or round of funding they were involved in. You can access the full details in this spreadsheet.


To wrap up, key investors (including VCs and Incubators) in the AR/VR domain as it applies to financial services are Fidelity Investments (Fidelity Labs), Mastercard, Citi Group, Wells Fargo, BoostVC, Rothenberg Ventures, Vive X, Y Combinator, The Venture Reality, and Andreessen Horowitz. You can access the spreadsheet here.
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Future of Augmented and Virtual Reality: Key competitors and what they are doing, as they apply to financial services.

After extensive research, we have determined that BNP Paribas, Hatton National Bank, Citi, Bank of America, and the Commonwealth Bank of Australia are all examples of companies within the financial services industry which findings show are among the most competitive in terms of developments and applications in the fields of virtual and augmented reality technologies. Further research reveals that although these five companies have entered several partnerships to develop and market these technologies, they have not funded or acquired any other businesses for these purposes.


I chose the five financial institutions included in this write-up based on the most recently updated lists from credible sources about the top ways banks have been using and developing VR/AR technologies. Research also shows that these companies are among the currently most active and heavily invested financial institutions in terms of the development and marketing of VR/AR technologies.

A few of the current and still active VR/AR technologies or campaigns included within this write-up were initially launched more than 24 months ago. Because of this, I found the need to include sources published beyond this time frame in order to provide you with press releases which cover these launches.


According to a press release by IPG Media Lab, BNP Paribas announced back in June 2017 that it was going to release a demo of a VR app during the Viva Technology Fair. The app was stated to provide users the ability to manage their account and view their transaction history.

BNP Paribas also entered a partnership with Vectuel and RF Studio and began development on "the Pod", which was described to be a VR tour that will allow users to view an interactive visual representation of their real estate investments. Along the tour, users will also be provided with guides and tips for every step of the processes involved in their real estate purchases.

A press release by BNP Paribas states that BNP Paribas Group Communications is heavily invested in the development of VR and AR products to provide their customers with a better overall experience with the company. Another example of their latest development in these fields is their Mobile Protect VR tool. The tool was designed to provide an immersive way of informing customers about the advantage of insuring their mobile devices.

BNP Paribas recently released a 360 degree VR corporate film that provides users an immersive look into all the latest innovative services the company can now provide or is currently developing.

Back in 2016, BNP Paribas partnered with ‘Les Rencontres d’Arles’, a French annual summer photography festival, and Fisheye to launch the VR Arles Festival.

The press release by BNP Paribas also mentions that since December 2016, BNP Paribas has been the primary partner for the mk2 VR, the first permanent VR venue in France.

Sources indicate that BNP Paribas is the "number one partner to tennis" and has invited fans to participate in a virtual tennis match during the 2017 French Open tournament.


According to an article recently published by The Financial Brand, Hatton National Bank (HNB) currently has an Oculus Rift System designed to familiarize customers with the bank's latest lineup of digital and mobile banking products. In a 2015 press release which covers the launch of the VR system, it was stated that the launch was part of HNB's New World Banking campaign. In partnership with Saatchi and Saatchi, HNB created the campaign to serve as the bank's platform for all its next generation banking services.


A press release by Business Wire states that Citi has partnered up with 8ninths and six other companies to develop their 'Holographic Workstation' project designed for financial trading. The workstation makes use of Microsoft's HoloLens, which is an AR device. Through the Holo Lens, traders are provided with a fully customizable and immersive interactive 3D AR HUD. 8ninths released a demonstration video which shows the Holographic Workstation in action and goes through all its main features.

Wired recently released a press release which states that Citi has partnered with Live Nation and NextVR to develop a VR platform which allows users to experience live concerts within their homes. In addition to this, the VR experience includes a backstage visit experience with the performers of every concert.

According to an article published by CNBC, as of 2016, Citi has acknowledged the potential of the VR/AR industry. Research findings from Citi's analysts indicate that VR/AR may become a trillion-dollar industry by 2035. Kathleen Boyle, the managing director of Citi GPS, stated that Citi is currently closely monitoring the industry as an investment theme. It was also mentioned that she believes VR/AR technology will soon find a lot of applications in multiple industries.


According to a press release by Media Post, the Bank of America Merrill has recently launched a campaign which aims to translate all the company's research about VR technologies into actual applications. This was planned to be accomplished through the launch of a dedicated website along with Google Cardboard and Samsung Gear demonstrations. It was stated that the marketing campaign will primarily be designed to cater to investors and small enterprises and presented through private events.

Chief Marketer recently published a press release which states that the Bank of America has invested in B2B VR engagement. It was also stated that the company has created a 360 degree VR video designed to inform potential investors about the advantages of investing into emerging VR technologies and the benefits they may bring to businesses. It was mentioned that the campaign was a result of a collaboration between the Bank of America and its other agencies such as GroupeConnect, Brand Union, and Ripple Collective.


Sources indicate that the Commonwealth Bank of Australia (CBA) developed a VR Workplace Experience app. Through the app, users are guided through a virtual environment which aims to both build interest in the bank's latest developments and to show off their current existing innovations. The app was initially available only through the Apple app store, but due to growing demand, it is now also available for Google Cardboard.

CBA's VR Experience app was stated to be part of the company's Innovation Lab campaign according to a 2014 press release which covers its launch. The Innovation Lab serves as CBA's idea incubator and gallery to showcase all their latest developments. In addition to the VR app, other technologies showcased within the lab include an interactive visualization of local payment trends.


BNP Paribas, Hatton National Bank, Citi, Bank of America, and the Commonwealth Bank of Australia are five examples of financial institutions that have heavily invested in VR/AR technologies. Although they have partnered with other companies and agencies to further develop and market these innovations, we found no evidence that they have funded or acquired other businesses for these purposes.
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Future of Augmented and Virtual Reality: The implications for financial services.

The future of Augmented and Virtual Reality for financial services has operational, customer, cost and data implications. To consider these in detail, this brief begins by discussing the current state of Augmented and Virtual Reality in the financial services sector, proceeds to look at future Augmented and Virtual Reality innovations for financial services then finishes by analyzing the implications of these innovations.

Augmented and Virtual Reality in financial services

Augmented Reality (AR) innovations currently being utilized by banks are aimed at enhancing customer service. Mobile applications from financial institutions provide customers with branch and ATM location data. Banks also have applications that provide real-time information on properties for sale as customers "walk down the street," as well as applications with visual interfaces that enable customers to better manage their finances.

Financial service companies are also exploring a number of Virtual Reality (VR) innovations. Citigroup is investigating VR solutions for investment trading that enable traders to use "workstations/mobile devices to share potential trade visualizations with investors." Fidelity Investment Lab has created a "Stock City" virtual world that enables investors to experience 3D stock portfolios. Finally, some banks are using VR to recruit and train technology employees.

Future AR and VR innovations for financial services

AR glasses with biometric authentication could potentially enable financial service customers to view account balances while shopping. Chatbots could be replaced by AR technology that facilitates more effective delivery of online financial advisory services. In the real estate environment, banks could introduce AR solutions that provide "mortgage calculators and 3D interiors".

VR bank services can potentially be accessed via biometrically secured AR systems for more "secure customer experiences." VR can serve as an effective financial education tool for both employees and customers. VR banks will offer virtual branches as an alternative to physical branches to attract more Millennial and Generation Z tech-savvy customers who currently "look to Google, PayPal, and Apple for financial products." Voice recognition technology will enable virtual conversational banking.

VR solutions can also potentially replace video conferencing which falls short when some level of physical interaction between customers and bank representatives is required such as when reviewing physical documents. Such video conferencing shortcomings can be addressed through visual VR holograms.

Implications for financial services

AR and VR technologies could lead to the replacement of financial advisors with data specialists. This scenario however will present challenges when dealing with emotional customers struggling with loan repayments.

AR tools that allow bankers to visualize data more "clearly and efficiently" will simplify large data evaluations. Furthermore, AR will significantly change "consumer experiences" by enabling them to access store product and account balance information simultaneously.

VR devices will enable financial institutions to provide dynamic data that is easier for customers to consume. This data will facilitate "live collaboration" and the delivery of more interactive real-time financial data by enabling investors to "communicate in the same virtual space" regardless of geographic location. Working in financial virtual spaces should psychologically help investors to understand securities better.

VR technologies will extend the outreach of financial institutions by enabling virtual access to remote, disabled or aging customers. In addition, VR and AR solutions that facilitate virtual visits will reduce costs for banks because they will not require physical premises. On the other hand AR and VR technologies could result in declining branch visits, replacing branches altogether.

Adoption of AR and VR will mean "faster decision-making" for financial service providers enabling them to be remain nimble to respond to evolving consumer needs. As such, it will be easier for financial service providers to be innovative and therefore produce "improved outcomes." To ensure their services remain customer-centric however, financial institutions will need to integrate AR and VR solutions with existing processes. AR and VR must be integrated with "back office customer data" and "middle office decision management processes" to be of use to consumers.

Finally, VR will make it easier for financial service providers to sell intangible long-term investments by facilitating much better client engagement. According to Align Financial director and AFA Adviser of the Year Darren Johns, VR technologies will enable potential clients to "see and interact with a future that doesn’t exist yet," giving them a better appreciation of "what today's decisions mean" for the future.


Future developments in AR and VR have 8 key implications for financial service providers. These include the replacement of financial advisors with data specialists, simplification of large data evaluations, shifts in consumer experiences, proliferation of dynamic interactive financial data, extended outreach, cost reductions, faster decision-making and improved client engagement.

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Digital Identities and Biometrics: The key drivers of this space as it applies to financial services.

In an increasingly technologically focused world, many people have a digital identity. This is the representation of a person found online and is split among the sites that they visit and to which they give personal or identifiable information. The digital identity of a person has become much more important as many real-world services move to the internet, especially with regard to security; identity theft and online impersonation are emerging problems.

Biometrics and similar technology are rapidly becoming more mainstream to confirm the identity of someone who is going online. However, these have been accepted more slowly.

Customer Expectations

The main way any technology is accepted is by being embraced by the masses, thereby bringing it into the mainstream. Because a digital identity is intrinsically and intimately connected to a person, there are several concerns that must be addressed before the digital identity becomes widely accepted.

The first is that the user must have control and ownership of their own identity. This was identified as an important concern as the best interests of the user may conflict with those that may use the identity. An emerging focus on digital rights also impacts on this concern.

Likewise, security and privacy are also concerns that must be addressed. As digital fraud and identity theft become more common, better authentication mechanisms such as biometrics are needed. These technologies are rapidly becoming a standard for security with their ease and speed of use. In the age where all data is collected and analyzed, customers also wish to regain privacy. Instead of sharing all information, the trend is to ‘tailor’ consent, allowing organizations and entities access to only specific parts of their identity for which they will receive something in return, such as a service.

Financial Industry Benefits

As most financial businesses are already considered trusted, regulated entities, they are ideally placed to use new digital identity technology. Businesses such as banks already verify identities and are trusted by customers to do this well. A goal of the UN is to have a verifiable, legal identity for everyone in the near future; soon there will be a requirement for services offering digital identity as a service. As this market will soon grow, there are opportunities available. As information and data becomes more and more valuable, companies such as banks will have an advantage in storing digital identities.

A second advantage is the use of data. In the modern world, data is a resource that is generated in substantial amounts and can be immensely useful. A fractured digital identity does not convey the entirety of the data associated with a person. A single identity associated with a single person will make it easier and simpler to aggregate the data associated with them, as well as giving the customer more control over it.

For the established financial services, the digital identity will ensure that the information critical to transactions, namely identity and authentication, are correct. Also, the digital identity will assist in any actions to reduce money laundering and systems to story and use these identities could be easily integrated into existing infrastructure. It will also allow for other technologies to become accepted, such as bank-issued digital currencies.


Digital identities and related services will become more needed and popular over the coming years if the customer expectations of security, privacy and control are met. Existing technology is aiding the use of digital authentication and verification already. The banking and financial sectors can and should adapt these technologies easily, and they will provide a myriad of benefits. Digital identities in these sectors will also allow new technologies to emerge and become mainstream, such blockchain or digital currency technologies.

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Digital Identities and Biometrics: The key players, as they apply to financial services.


A "who's who" list compiled by financial technology firm, VATBox, reports that massive investment funding has spawned the dramatic growth of the FinTech industry with the number of FinTech companies reportedly growing from approximately 1000 in 2005 to more than 8000 in 2016.

The VATBox list names the current innovation leaders leveraging digital identity and biometric technology in the financial industry. Among the stand-out companies drawing the lion's share of attention and investment dollars are Lemonade which raised $33.1 million in December 2017; ReceiptBank with $50 million raised in July 2017; Stripe with $150 million in November 2016; RobinHood with $110 million in April 2017; and Wealthfront which will raise $75 million by January 2018.



Lemonade is a homeowner's and renter's insurance start-up utilizing bots and machine learning to dramatically increase the speed at which customer service and claims management requests are handled.

The company raised $33.1 million in funding in 2016 with General Catalyst as a chief investor followed by GV, Thrive Capital, and Tusk Ventures.

Lemonade is currently licensed and operating in New York with plans to expand to additional states throughout the US in the future.

Receipt Bank is an award-winning, bookkeeping automation platform with core markets in North America, EMEA, and Australia. The firm holds the distinction of being the first software company to automate data extraction and collection in the bookkeeping industry.

"Artificial Intelligence has become a clear disruptor in several industries, including financial services," per Brad Twohig, managing director at Insight Venture Partners (as reported on Receipt Bank's company blog) "Receipt Bank is an industry-leader in using emerging technology to drive core functions forward".

Receipt Bank was an early adopter of Artificial Intelligence and plans to use the $50 million in funding from Insight Venture Partners as well as any future capital raised to continue to advance its patent-pending technologies. This round of funding brings Receipt Bank's total funding to $65 million.


San Francisco based Stripe is a digital payment platform offering embedded payment processing solutions to e-commerce businesses. In a TechCrunch interview, Stripe owner, Collision, asserts the company's mission to "take out the complexity from growing your business… We are going to see this as a major part of Stripe’s product offerings in the future. It is how we think about the world. What makes life hard for businesses, and why aren’t they growing faster? How can we change that?"

The latest round of funding for the platform resulted in $150 million with the two largest investors being General Catalyst and Capital G (formerly Google Capital) followed by Sequoia Capital as well as other investors which the company has yet to identify.

Stripe has plans to use the latest funding capital to continue the development of innovative products which offer services beyond its current payment processing platform. These innovations include fraud prevention and faster pay-outs for merchants. The first of many such planned innovations, Radar, is a fraud prevention tool launched in October 2016.


Palo Alto-based Robinhood is an online investment platform allowing investors to trade US stocks and ETFs commision-free.

The platform was launched in 2013 and is among a growing number of financial start-ups leveraging digital technology innovations to simultaneously appeal to a younger client base and lower the overall cost of doing business.

Robinhood's recent funding round in April 2017 raised $110 million with the largest investment coming from investment group DST Global headed by Russian billionaire Yuri Milner followed by Greenoaks Capital and Thrive Capital. Existing investors Index Ventures, NEA and Ribbit Capital also contributed to the latest round of funding. To date, Robinhood has raised a total of $176 million in funding.

Wealthfront is a California based online investment startup hoping to be the “leading automated financial adviser for people under 40,” per co-founder and CEO, Andy Rachleff.

The online firm is one of a handful using digital technology innovations to eliminate the middleman in investment trading. Wealthfront's platform offers digital services ranging from financial planning, and investment planning to traditional banking services such as loans. The company aims to draw in Millennials with a more efficient digital investment platform and a much lower pricing model than what traditional brick and mortar investment firms are able to offer.

To date, Wealthfront has raised $130 million in funding and is set to receive an additional $75 million in capital from the latest fundraising round in January 2018. Tiger Global is currently Wealthfront's largest investor followed by Benchmark Capital, Greylock Partners, Index Ventures, Social Capital, Spark Capital as well as other venture capital firms.


Financial technology or FinTech has experienced steady and dramatic growth over the past decade which is largely attributed to the massive amount of capital being invested into digital technology innovation by powerful venture capitalists. As reported by VatBox, these startup companies have contributed innovative new technologies that aim to improve tax compliance, cut down the incidence of human error and decrease the risk associated with economic crime or fraud. The companies detailed in this report are the current stand-outs driving innovation in digital identity and biometric products for the financial sector and garnering the attention and investment capital from big-name venture capitalists such as General Catalyst, Capital G, and others.
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Digital Identities and Biometrics: Key competitors and what they are doing, as they apply to financial services.

In 2017, American Express, Bank of America, Wells Fargo, TD Bank, HSBC, BNP Paribas, and Lloyds Banking Group have launched or announced plans to launch new platforms that use fingerprints, facial recognition, and/or eye scanning for authentication. Below, I will present provide an analysis on what American Express, Bank of America, Wells Fargo, TD Bank, HSBC, BNP Paribas, and Lloyds Banking Group are doing in the Digital Identities and Biometrics domain as it applies to financial services.


In October 2017, American Express announced that the bank had upgraded its online authentication tool. The updated platform SafeKey 2.0 uses fingerprints and facial recognition. It utilizes the EMV® 3-D Secure 2.0 industry standard. The service would be deployed in spring 2018.


In August 2017, Bank of America began to pilot a technology from Samsung that allows customers to log in to their mobile banking account by taking a picture of their eye. Around 1,500 employees from Bank of America and Samsung were involved in the testing. This technology identifies users by measuring their iris with an infrared camera. Besides the iris scanning pilot, the bank is also exploring the use of other forms of biometrics such as facial scanning.


In April 2017, Wells Fargo announced that the bank is in the process of testing out several technologies in the arena of biometrics such as fingerprints or eye scans. The goal was to phase out the use of passwords eventually. The bank is currently working with software developer EyeVerify to develop a platform that allows authentication via eye scanning. EyeVerify’s technology is capable of recognizing users by matching a picture of their eyes with information it has on the micro-features of their eyes such as blood vessels and other details.


In January 2017, TD Bank announced that it was working with Transmit Security to develop a platform for authentication via various types of biometrics. The goal was to create omnichannel authentication platforms that provide the bank with multiple backup options in case the first biometric does not work. The platforms would allow customers to choose the type of login they prefer such as selfie or fingerprint. TD Bank planned to deploy the new biometric authentication methods channel by channel throughout the year.


In September 2017, HSBC started to allow its customers in China to make payments via their banking app with a selfie. Customers use the facial recognition technology by blinking into their camera using the ‘selfie mode.’ After the system has checked their identity against a photo held in a database, customers would still need to enter the correct passcode into their app. China is the first country in the world where HSBC is using facial recognition technology for banking purposes.


In January 2017, BNP Paribas Wealth Management launched a platform that requires biometric authentication. When the new platform was launched, it was only available for Luxembourg clients using iOS mobile devices. Customers log into myBioPass with a ‘selfie’ and transactions are authorized by fingerprint and voice recognition. The bank has claimed that it is the first in Europe to utilize all three biometric features together.


In April 2017, Lloyds Banking Group announced that it was working with Microsoft to test biometric authentication with customers logging into the internet banking sites for Lloyds Bank, Halifax, and Bank of Scotland. The Windows Hello platform uses fingerprint or facial recognition for authentication. The platform uses cameras on Windows 10 devices with infrared technology to identify faces. Lloyds Banking Group is the first banking organization in the United Kingdom to work with Microsoft on Windows Hello.


In conclusion, American Express, Bank of America, Wells Fargo, TD Bank, HSBC, BNP Paribas, and Lloyds Banking Group have launched or announced plans to launch new authentication platforms in 2017. These authentication tools use fingerprints, facial recognition, eye scanning, or a combination of two or more biometric features.

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Digital Identities and Biometrics: The implications for financial services.

Banks across the world have already implemented biometric technology, such as Lloyds Banking Group, PyraMax Bank, and many more. Still more banks are looking to add biometric security in the future. There are many kinds of biometrics beginning to be used, such as DNA, fingerprints, facial and voice recognition, and even vein pattern recognition. Most concerns in America involve sensationalized security breaches, or fear brought on by science fiction stories.


In general, the use of biometrics in the financial world is considered a huge boon. According to Acuity Market Intelligence, biometric authentication in the Cloud will greatly improve security, lower costs, and reduce friction at every step that the customer will take. Biometric technology, such as voice recognition, fingerprint scanning, and facial recognition is on the rise. In fact, by 2022 it is projected that “5.6 billion biometric mobile devices will secure 1.37 trillion biometrically-enabled payment and non-payment transactions.” Consumers will shape which paths that these technologies take in the future. “The balance will shift to whatever biometric technology is the most comfortable for the user while also simplifying the process and improving security.” An element of trust is paramount, via clear communication and education of the safety and use of the tech from biometrics companies to the user.
Mastercard and the University of Oxford have found that a whopping 93% of consumers prefer biometric technology to passwords. The same study found that over 90% of banks want to implement the technology, however, most of the people involved in the decision-making process are not experienced enough to know where to start. Smartphone sales are consistently rising, with Apple’s Touch ID being shown to be secure and fast for the user. Banks are hoping to take the opportunity to follow Apple’s lead, and “deliver widespread and responsible adoption of mobile biometric solutions in financial services.”
So far, on-device biometrics are an asset, but Acuity is convinced that Cloud-biometrics will be the most reliable form of the technology in the future. Another trend to watch out for is blending biometrics with machine learning. As consumers continually use technology, various data points from location to facial recognition can be collected to make the process smoother so that legitimate users can bypass rigid rules like passwords. Soon they will be able to verify their identity without memorization techniques while still keeping possible criminals out.
Another practical use for biometrics is eliminating in-person visits to a bank. Historically, prospective account holders have needed to bring their ID in person. A bank representative then looks back and forth at the picture and the person in front of them in order to determine if they are, in fact, the person on the ID. This is inconvenient at best, and human error can let fraudulent IDs through quite easily. While biometric-driven verification in this process is still in its infancy, facial recognition and video conferencing ae r already being implemented in some banks to replace the in-person visit.
In Europe, an emerging technology dubbed BankID helps users “prove their identity for high-risk transactions.” This has yet to be implemented in the United States, in large part due to Americans being wary of advertising companies being given sensitive information in order for these transactions to be managed. BankID, however, has been shown to be useful in governmental and healthcare applications, as well as the financial world and social media.
Another country that has been implementing biometrics in their security, specifically iris scanning, is Canada. While their biometrics are used mostly for governmental agencies, banks can learn from their mistakes. For instance, they have learned through some trial and error that iris scanning is more effective in the summer than the winter, due to the dilation of the pupils from natural light. KB Kookmin Bank and IDFC Bank have followed Canada’s lead in implementing iris scanning. The Australia and New Zealand Banking Group, among others, is one of the largest banks to utilize voice recognition. DNA and vein pattern recognition are also trends to watch for, with PyraMax using Verifast to authenticate their customers in these ways.


As always, regarding personal security, there will always be concerns. Security breaches do happen, which underlines the fact that biometrics are not perfect. While these breaches are often sensationalized out of proportion, it is good practice to address data storage and management concerns. Acuity Market Insights analyst Maxine Most explains that “this includes anonymous storage, disaggregating biometrics from other Personally Identifiable Information (PII) — including templates from multiple biometric modalities — and installing anti-spoofing and presentation attack countermeasures.”
Another worry is that, unlike passwords, fingerprints can’t be changed if they are stolen. Science fiction has also scared people into thinking they could be mutilated for the sake of identity fraud. This is an irrational fear, as biometric systems already have “liveness” tests that have eradicated this unlikely issue. A slightly more realistic concern is permanent negative marks on an individuals record. Currently, these marks can easily be erased by the judicial system, however, if they are tied to a body instead of just a name it could be harder to challenge.


Science fiction stories have frightened many Americans into being wary of biometric security measures. Despite this, they have been proven to be easier for the consumer to use, and more secure in keeping their information safe. While breaches can and do happen, exciting trends such as facial recognition, voice recognition, and DNA collection are making banking safer and easier to use all over the world.
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Distributed Ledger Technology/Blockchain: The key drivers of this space as it applies to financial services.

Distributed Ledger Technology/Blockchain is attracting the attention of the finance industry, as it is considered a possible solution for many issues in the banking sector, such as reducing friction and costs. Various reports show that its implementation could save billions of US dollars to banks. However, this technology is so far only being experimented and researched by them and its application remains challenged by various factors. The main drivers for future implementation of Distributed Ledger Technology/Blockchain in the financial sector can be found below.

Main drivers of Distributed Ledger Technology/Blockchain for application in financial services

1. scalability

In its current state, blockchain technology is not scalable and would not handle its application in the financial system. This is due to the predetermined size of blocks of 1 Mb being used as well as the level of energy consumption needed. The issue is also that adding scalability to a blockchain would require adding more computing power to every node in the network. This is difficult to achieve as these are public nodes, in a decentralized system, and thus not under a unified control mechanism. The result is that transactions take time, and incur costs to users. As an example blockchain transactions for bitcoin are processed at the speed of 500K/day whereas for Ethereum it is 800K/day. This is equivalent to only seven transactions per second for Bitcoin. As a comparison, VISA transactions reach a speed of 4000 transactions/second. Without scalability constraints, blockchains would allow computers to exchange vast amounts of data, which would open the door to financial services applications. However, they are solutions that are being worked on, such as sharding, that would eventually allow some blockchains to reach speeds closer to VISA transactions with 2400 transactions/second. A company called Zilliqa is working on this problem.


The US is found lagging behind in terms of blockc