Investment Services, Trends

Part
01
of four
Part
01

Consumer Banking Investment Products: Technological Trends

Artificial intelligence (AI) and blockchain technology are two technological trends in consumer banking investment products and services. These trends will impact this segment of the consumer banking industry by reducing operational costs and preventing fraud. Some banks that have adopted these technology trends include Bank of America, Wells Fargo, JPMorgan Chase, National Bank of Canada, Royal Bank of Canada, and Scotia bank.

Artificial Intelligence (AI)

  • The banking industry is already using artificial intelligence (AI) and robotics for certain consumer banking investment products and services. There is no segment of the banking process that is not transforming because of AI.
  • Some areas of deployment of this technology in the banking industry are to "address key pressure points, reduce costs, and mitigate risks." Specifically, for the consumer banking investment products and services, the technology trend makes "banking processes faster, money transfers safer, and back-end operations more efficient."
  • This technology trend can evolve in various capabilities such as "social and emotional intelligence, natural language processing, logical reasoning, identification of patterns and self-supervised learning, physical sensors, mobility, navigation, and more." It is a trend that looks beyond displacing the bank teller, which is even a key component of consumer banking investment products and services. As this trend evolves with the capability to learn, financial experts are projecting more gains in new models and platforms soon.
  • The most visible way how this technology trend would impact this segment of the consumer banking industry is the use of chatbots and robots for customer service. Another way this technology is impacting this segment of the consumer banking industry is the facilitation of mobile banking, which allows all-round-the-clock access "for consumers to conduct banking operations."
  • One expectation of this technology in the consumer banking industry is that it will save costs remarkably. By 2023, the impact of AI would have seen about $447 billion in global savings in banking and financial services. The technology will also impact this segment of the consumer banking industry by ensuring frauds are detected easily and security is formidable.
  • Another way this technology is impacting this segment is through the help it offers consumer banking products and services in "risk management and lending decisions." AI is also the foundational technology for technologies like big data analytics and others. Through it, other technology can interface and run efficiently for efficient results in this segment of the consumer banking industry.
  • A study by PricewaterhouseCooper (PwC) confirmed that 52% of decision-makers in the banking and financial industry putting substantial monies into AI. 72% of these top executives believe this technology will give them a business advantage.
  • JPMorgan Chase is an example of a bank experiencing this impact through the "use of AI to streamline customer service." The same goes for Bank of America and Wells Fargo.
  • The United States is a country that is significantly experiencing this impact. Through a conversational AI by a US-based company, banks in the country are using this platform to "build their chatbots and virtual assistants."
  • Known as KAI, this platform uses "AI reasoning and natural-language understanding and generation that can handle sophisticated questions about finance management."

Blockchain

  • Although blockchain as technology was first used in cryptocurrency, it is a technology that is trending in the banking sector. According to the Harvard Business Review, blockchain "will disrupt banks the way the internet disrupted media."
  • Because it is transparent and highly secure, the banking sector will find the technology cheap to operate. Financial experts believe more banks will adopt this technology for their institutions, particularly in consumer banking investment products and services. This is because this technology will improve consumer satisfaction.
  • This technology trend can "provide banks with greater transparency and easy accessibility while reducing the needs of third-party involvement." However, the transparency of blockchain networks to members could be a "significant barrier to adoption at scale." This is because there would be instances where banks would want to keep the identity of certain consumers anonymous.
  • According to Santander bank, "blockchain can help reduce banks' infrastructure costs by between $15–$20 billion per annum by 2022."
  • Blockchain solutions will impact this segment of the consumer banking industry because it can "improve security, save money, and improve customer satisfaction."
  • Also, this technology will impact on this segment of the consumer banking industry because it makes use of "a distributed database that can keep track of transactions in a verifiable and permanent way." Experts also believe that the use of this technology "will become an integral part of financial institutions’ technology and operational infrastructure."
  • One impact of this trend can cause in this segment of the consumer banking industry is convenience revolution. Blockchain-powered tools can lead to all-round automate banking operations, which may encompass "self-executing loans, round-the-clock deposits and transfers, and faster transactions without ever having to deal with a human."
  • The expectation of blockchain technology in retail banking could be deployed to handle "blockchain’s three key strengths — data handling, disintermediation, and trust, which cover cases of remittances, KYC/ID fraud prevention, and risk scoring." In this segment of the consumer banking industry (identity fraud alone), banks lose $15-$20 billion every year. With blockchain technology, however, this annual loss from fraud will reduce by almost $9 billion.
  • This technology is a trend because many experts recognize it as a potential solution to many issues in consumer banking investment products and services. More so, many banks, like JPMorgan Chase, National Bank of Canada, Royal Bank of Canada, and Scotia bank, are adopting this technology. For instance, some banks mentioned above collaborated with a fintech company to develop "a digital identity and authentication service that simplifies consumer access to online services, including digital banking."
  • A country like Singapore is significantly experiencing this impact by using this technology to detect ID fraud in consumer banking investment products and services. "HSBC, Mitsubishi UFJ Financial Group, and OCBC Bank" are three banks in Singapore that collaborated with a blockchain-based data-storage start-up to create a digital identity platform for KYC. The project predicts that these banks will mitigate costs by 25%-50%.

Research Strategy

To determine the technological trends in consumer banking investment products and services, we combed through articles and reports by financial and fintech experts. Using these experts' articles and reports, we provided robust descriptions of two technological trends in this segment of consumer banking. We also highlighted examples of companies and countries that are significantly experiencing the impacts of these trends.
Part
02
of four
Part
02

Consumer Banking Investment Products: Economic Trends

Nations all over the world are experiencing an economic downturn that affects consumer banking products and services as a result of the global pandemic. Before the pandemic, economic growth was predicted to be slower than in 2019, but still there. Now, it is doubtful whether any country will experience economic growth this year. During the rest of 2020, the trend to use digital banking instead of in-person banking at a physical bank building and the trend to using Artificial Intelligence (AI) and automation to provide personalized services to banking customers are two of the global trends that will continue to occur in consumer banking. These trends began before the COVID-19 pandemic, and have become even more important during the months that billions of people have been asked to stay at home. Economic trends in place before the pandemic, i.e., financial slowing of many national economies, have now been displaced by the threat of global recession or depression.

Trend #1: The Shift to Digital Banking

  • According to BusinessInsider, "The most prevalent trend in the banking industry today is the shift to digital, specifically mobile and online banking...." Today's banking customer does not want to visit a physical bank branch to carry out transactions. So banks have invested in software that enables customers to use their mobile phones, tablets, and other devices to perform banking transactions and manage their wealth.
  • There is a difference in the generations that prefer digital banking to visiting a branch. "This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners)."
  • More banks are aiming their investment and other products at Millennials because of the generation's large size, their changing wealth needs, and their own increasing value. Some banks have readied new products, including “impact investing,” new "pricing models (for example, subscription-based pricing by Charles Schwab), and new asset classes (for example, music royalties by Royalty Exchange)."
  • Social media have become the primary media through which to connect, engage, inform and understand banking customers. Social media are also the places where customers do their research and "compare banks’ offerings." Millennials read reviews and post reviews of banks, stores, and every other form of commerce today.
  • According to BusinessInsider, when digital banking usage is analyzed by generation, "97 percent of millennials use it (up from 92 percent in 2017), 91 percent of Gen Xers (up from 86 percent) and 79 percent of Baby Boomers (up from 69 percent)." As indicated before, today's customers do their research and comparisons. "64 percent of mobile banking users said that they would research a bank's mobile capabilities before opening an account, and 61 percent say they would change banks if their bank offered a poor mobile banking experience."
  • The four largest banks offer the most digital services on their mobile apps, and that is why Millennials use these banks. Bank of America, Chase, CitiBank, and Wells Fargo together have 44 percent of Millennial business.
  • The digital services available at the four largest banks include loan applications, credit score access, payments, budgeting, ATM, and 13 others.
  • During the COVID-19 pandemic, nearly 17 million Americans and millions of other people lost their jobs, either temporarily or permanently, and the availability of digital banking became very important to everyone who could not leave his or her home because of government restrictions.
  • The economic effects of the pandemic are expected to overwhelm the global economy, which was experiencing a financial slowdown prior to the start of the pandemic.

Trend #2: Personalization to a Segment of One

  • According to Accenture and TheFinancialBrand, some banks are now directing their marketing at customers based on customer "lifestyles, values, aspirations, mindsets and underserved needs. Banks have gone beyond personalization by age, gender, or generation, to create messages and experiences for "the segment of one." Such a high level of personalization is achieved through careful use of "data, advanced analytics, and digital technologies."
  • More and more, existing banks are organizing themselves around customer needs instead of around bank products as they have done traditionally. Banks are striving to offer "seamless customer experience", through integration of sales and service in such a way that customers perceive their banks as meeting individual customer needs, not selling generic products.
  • Banks are using new technologies such as Artificial Intelligence (AI) and automation to offer customers the banking services they need in a personalized manner. Two examples of these new technological offerings are available at Commonwealth Bank of Australia (CBA) and OCBC. "The CBA launched in mid-2019 its CommBank App 4.0 update which offers personalization tailored to individual customer needs. In Singapore, OCBC has embedded Clinc’s conversational AI in its mobile app to provide customers with voice-enabled instant access to their financial information."
  • CBA has seven million digital customers who use CommBank 4.0. The app can be personalized to manage cash flow, tell a customer whether a payment has been made twice, and alert the customer when there is potential fraud on one of the accounts, among other capabilities.
  • Trim is an AI "money-saving assistant that connects to user accounts and analyzes spending." Trim analyzes a user's finances and offers ways to save money personalized to each user. This app for smart phones can cancel unused subscriptions, find better quotes for insurance, and negotiate bills. "Trim has saved $6.3 million for more than 50,000 people, according to a 2016 VentureBeat article."
  • During the pandemic, personalization is becoming more important to banking customers as money becomes tight. No one knows the full economic effects of the pandemic, but predictions from places such as the International Monetary Fund (IMF) indicate that the consequences for many countries will be dire.
Part
03
of four
Part
03

Consumer Banking Investment Products: Societal Trends

Introduction

There are frequent conversations concerning social responsibility, care for the environment, and commitments to make the world a better place for all. An upward momentum in consumer trends have been observed around ESG (Environmental, Social and Governance). Unsurprisingly, these values have permeated into the consumer banking investment space. Below are two trends that are developing at a fast pace.

Impact Investing

  • The Global Impact Investing Network (GIIN) defines impact investing as "investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return". Impact Investing is also referred to as SRI investing which stands for sustainable, responsible and impact investing.
  • As more people begin to consider their social and environmental responsibilities, impact investment is an accelerating movement focused around sustainability. It has grown by 600% in the past ten years with more than $30 trillion assets.
  • 83% of consumers expect companies to do what they can to positively impact both society and the environment. Millennials want both purpose and financial achievement and are pushing companies to fulfill that demand.
  • Who manages these portfolios? According to the GIIN, "Over 60% are asset managers. About one in five are foundations, and the rest include banks, development finance institutions (DFIs), family offices, and institutional asset owners." Their research revealed 58% of investors are headquartered in the United States and 21% in Europe.
  • The Investments and Wealth Institute cites the following reasons for client demand in the ESG (Environment, Social, Governance) arena: Client demand, mission, social benefit, returns, risk, fudiciary duty, UN goals around sustainable development, and regulatory compliance.
  • Citi recently launched a $150 million dollar investment that will impact society in a positive way. They recognized themselves as the first bank to launch a fund of this size with its own capital. They intend to address workforce development, financial capability, sustainability as well as physical and social infrastructure to close the gender and ethnic gap.
  • The Bank of Italy has recognized the importance of ESG and has woven it into the fabric of their business.

Food and Agribusiness

  • Startups in the food and agribusiness has grown 250% in five years, with strong investments in vertical farming, meat substitutes and dairy alternatives.
  • The growing focus around sustainability and environment has driven demand for meat alternatives like Beyond Meat who aims to replace animal agriculture. Over $800 million dollars have been invested in food startups in 2019 including Impossible Foods, the recipient of $300 million. On their website, they stated their mission is to "make food that's better for people and the planet".
  • Sales for plant based foods grew 17% in 2019, while overall food sales grew 2%. Since 2009, $17 billion has been invested in plant based foods, most of which has happened since 2017. The alternative meat market can reach $40.5 billion in ten years.
  • Stifel Financial Corp's Consumer Investment Group has hired 3 new senior leaders to take on the Food, Agribusiness and automotive aftermarket sectors. They've identified these areas as "core consumer growth sectors" for their business.

Research Strategy

A close look at recurring trends as cited from multiple sources with extensive industry knowledge was used to determine the top trends in investment banking among consumers. A growing initiative around sustainability was observed and research was expanded around this topic.





Part
04
of four
Part
04

Consumer Banking Investment Products: Legal and Regulatory Analysis

The global regulatory landscape of the consumer banking business has witnessed an interesting dynamic since the financial crisis in 2008. Several major international regulations govern consumer banks, covering investment products and services. With the constant evolvement of international guidance, national legislation has followed suit. Changes are led by advanced economies, such as the US and the European Union, which has, to a large extent, focused on addressing such issues as risk management, consumer and data protection, and financial technologies.

Typical Laws and Regulations In The Consumer Banking Sector

  • The major international banking regulation is the Basel Accord, that prescribes for banks' capital reserve requirement by the Basel Committee on Bank Supervision. The first edition was published in 1988 and the latest edition was issued in 2013. The international accord is the guidance for all banks to manage capital, market and operational risks, which ensures banks have sufficient capital reserves to absorb unexpected losses.
  • On the national level, legislation such as Bank's Act and Securities Act is the main regulatory guidance for overseeing consumer banking and investment products. For example, National Bank Act, Securities Act, Investment Company Act, Dodd-Frank Wall Street Reform and Consumer Protection Act in the US; Financial Services and Market Act is the main framework law for the banking sector in the UK; Banking Ordinance and Securities and Futures Ordinance are the primary legislative tools governing the banking and securities sectors in Hongkong.
  • In the US, Payment Services Directive II (PSD2) was effective in promoting innovation and competition for banking payment transactions made by customers in 2018.
  • Other regulations that are not specifically for governing consumer banks and investment products also have regulatory effects in protecting consumers, such as consumer and data protection acts, and employee professional conduct regulations. In the US, a new bill on Economic Growth, Regulatory Relief and Consumer Protection, was signed into law with some amendment in Dodd-Frank Act in 2018, which aimed to impose stringent rules on large banks. For example, the State of California passed the Consumer Privacy Act in 2018 and the other states are expected to enact similar regulations.
  • In 2019, the European Parliament revised the Capital Requirements Directive and Regulation, namely CRD 2 and CRD5, which aimed to strengthen the capital and liquidity positions of the European banks and help establish a banking union. Moreover, banks in the European Union (EU) have made significant progress in implementing the General Data Protection Regulation (GDPR).
  • In the Asia Pacific region, countries like China and Malaysia, have focused on employee conduct management, especially the accountability of senior managers. In 2019, banking regulators started to monitor the implementation of the employee conduct rules by setting harsh requirements on enforcing the professionalism of banking staff.

Regulatory Changes In Past Five To Ten Years

  • Aftermath 2008 global financial crisis, there has been a synchronization trend in consumer banking regulations. However, the situation started to change in 2018, when a divergence in banking regulations emerged globally. The consumer or personal banking segment has seen an increased dynamic on regulatory changes in the US, Europe, and the Asia Pacific region. Major banking legislation changes every few years, followed by related regulations and interpretations, where safety, soundness and consumer protection are often the key focus.
  • Since 2018, consumer banks have witnessed an increased level of regulatory changes, especially in the US and European regions. Banks believe that regulations are their biggest challenge and would weave regulations into their daily operation, instead of seeing regulations as burdens.
  • Banking regulations have started to become prescriptive and local in nature, as national governments implement economic policies through influencing the financial system, such as incentivizing lending activities in favor of certain population groups, for example, students and mortgage bond borrowers.
  • There is an increasing trend of consumer banks in emerging markets to join restricted economies such as China, India and Korea, and set regulatory barriers restricting foreign banks from entering their financial systems. This would in turn bar emerging market banks from operating overseas, except there are bilateral agreements.
  • National governments are expected to privatize state-owned banks and influence the consumer banking system through regulations. With the national governments' objective to reduce sovereign risk, more stringent capital requirements are expected to be imposed on retail banks.
  • Regulatory reforms have been prevalent globally, ranging from China's liberalization of interest rates to the capping of bank card fees in the US. These reforms have resulted in lower revenues while cost-cutting measures have not been effective at consumer banks, which was exacerbated by rising regulatory compliance costs. Local regulations has been a critical factor that raises cost levels and expense ratios.
  • In Europe, the Payment Service Directive (PSD2) for the European Union has recently allowed third-party financial service providers, such as fin-tech startups to share customers' transaction data with banks, which jeopardizes banks' monopolistic position of owning customer data causing rising market competition. Moreover, the European Commission was in the process to establish a banking union but faced some challenges from changing trading book capital requirements by the Basel Accord.
  • In the US, the fiduciary rule of the Department of Labor is expected to be replaced by a new best-interest rule of the Securities and Exchange Commission.
  • In Canada, Bank Act amendments in 2018 incorporated the G20 or OECD guidance on financial consumer protection, but many of the amendments, regarding consumer protection, is not digitally-friendly. In other words, banks' disclosure requirements have not fully embraced the elements of digital banking services and products. In comparison, the US has demonstrated a good example in this regard.

Geographical Structure of Consumer Banking Regulations

  • Global consumer banking regulations on capital adequacy, liquidity and associated stress-test requirements, such as the Basel Accord, continues to evolve, which will eventually set higher standards and stringent rules on global banks. For example, banks are required to provide more detailed portfolio metrics and their development trends, while being able to develop models that quickly demonstrate various risk scenarios.
  • In the US and UK, national banking regulations are expected to be more complex, with regulators being less flexible and more suspicious on how banks improve their compliance, reporting, business processes and data. For example, heavy penalties related to LIBOR and US mortgages were imposed on banks due to increased scrutiny by governments and national banking regulators.
  • Post-2008 financial crisis, the converged regulations in the consumer banking sector has started to diverge since 2018, with banks beginning to shift their focus to home markets at the cost of globalization and economies of scale. Individual countries have begun to be driven by local regulatory constraints and national economic policies set out by governments in promoting economic growth. This is because banks have fully integrated the policy objectives of banking regulators and national governments into their daily operations.
  • In 2017, the US, Australia and the SEPA zone rolled out the new real-time payment infrastructure as a compliance project mandated by regulators. 85% of banks expected the new infrastructure to be a future revenue growth driver, as it formed the foundation of new product enhancements.
  • Open banking regulations that form a framework allowing consumers and banks to authorize third-party financial service providers to share consumers' financial transaction data with banks, using secure online channels. It is expected to fragment retail assets and liabilities of banks Europe, Hongkong, Australia, Singapore and soon Canada. It would increase market competition and business opportunities between consumer banks and third-party financial service providers, such as payment specialists.
  • Consumer protection measures have become less effective to guard consumers against all risks, such as risk derived from emerging financial technologies. In 2019, the World Bank published a discussion note and expected to see renewed regulatory approaches, regarding the design of retail banking products and their distribution processes.
  • Innovation-friendly regulatory reforms, such as fintech startups, have gained traction between 2017 and 2019. New consumer protection regulations on digital banking products and services are on the rise.
  • For more detailed similarities and differences, please refer to Baker Mckenzie's financial regulatory guide published in 2017, which outlined the fundamental aspects for banks, such as main regulations, licensing and authorization requirements, among others in 41 countries.

Research Strategy

The research started by reviewing the global consumer or retail banking industry. The primary source of information on regulatory issues was published reports and survey key findings by reputable consulting firms, such as Deloitte, PwC, BCG and Ovum, news publishers such as Forbes, and academic institutions, such as Harvard Kennedy School. We focused on identifying major changes and trends in the recent past in key world regions, such as the US, European Union, and the Asia Pacific region. Specific country examples are also highlighted in demonstrating significant regulatory changes, commonalities and differences across regions.
Sources
Sources

From Part 01
Quotes
  • "use of AI to streamline customer service."
  • "for consumers to conduct banking operations."
  • "risk management and lending decisions"
  • "will disrupt banks the way the internet disrupted media."
  • "improve security, save money, and improve customer satisfaction"
  • "a distributed database that can keep track of transactions in a verifiable and permanent way."
Quotes
  • "address key pressure points, reduce costs, and mitigate risks."
  • "social and emotional intelligence, natural language processing, logical reasoning, identification of patterns and self-supervised learning, physical sensors, mobility, navigation, and more."
  • "will go on to become an integral part of financial institutions’ technology and operational infrastructure."
Quotes
  • "banking processes faster, money transfers safer and back-end operations more efficient."
  • "build their chatbots and virtual assistants."
  • "AI reasoning and natural-language understanding and generation that can handle sophisticated questions about finance management."
Quotes
  • "provide banks with greater transparency and easy accessibility while reducing the needs of third-party involvement."
  • "elf-executing loans, round-the-clock deposits and transfers, and faster transactions without ever having to deal with a human."
  • "blockchain can help reduce banks' infrastructure costs by between US$15 – 20 billion per annum by 2022."
Quotes
  • "significant barrier to adoption at scale."
  • "blockchain’s three key strengths — data handling, disintermediation, and trust, which cover cases of remittances, KYC/ID fraud prevention, and risk scoring."
  • "a digital-identity and authentication service that simplifies consumer access to online services, including digital banking."
  • "HSBC, Mitsubishi UFJ Financial Group, and OCBC Bank"
From Part 02
Quotes
  • "Foremost among the drivers of disruption should still be technology. The fusion of current technologies, such as machine learning and blockchain, and emerging ones such as quantum computing, could not only create new opportunities, perhaps greater in scale than ever before, but also engender new risks. Additionally, technology will also radically change work as we know it, as well as who is doing the work, and where it gets done."
  • "Meanwhile, on the economic front, “Japanification”—persistent low growth, low inflation/deflation, and near-zero/negative interest rates—is a real possibility for many advanced economies, particularly in Europe.1 "
  • "To unlock AI’s promise for growth and for banks to evolve from a product-centric to a customer-first organization, harnessing the potential of data will be a key focus in 2020 and beyond. However, data that resides in banks’ siloed systems is just one piece of the puzzle. As consumers’ digital footprints rapidly grow, new kinds of data are added into the mix. And while increasing the prevalence of ecosystems and data-sharing between institutions expands customer data, it also complicates data management and raises privacy concerns. Banks should rethink their data architecture and get their houses in order to maximize returns from analytics initiatives. Additionally, privacy-enhancing techniques can help banks derive value from data-sharing without compromising privacy.46"
  • "Despite the pressure from macro forces, US retail banking market indicators are positive: Average NIM as of Q2 2019 reached 3.39 percent;65 deposits grew at 5 percent year over year; mortgage originations were up;66 consumer debt reached a record level of US$4 trillion (primarily driven, however, by a sharp and worrying rise in student loans);67 and the efficiency ratio and asset quality remained generally good.68 But the number of banks and branches continued to shrink. Despite the competition from fintechs, US bank consumers’ trust in and satisfaction with their banks as custodians of their money and financial data remained generally high."
  • "Nevertheless, scale and efficiencies will be dominant factors. Also, in the next few years, banks could partner with others in the ecosystem to become de facto platforms, offering countless services that will extend beyond banking. Banks should still be best positioned to own the customer relationship, which would enable them to rethink their value proposition and serve client needs holistically, supported by data and analytics. Product innovations are expected to focus on clients’ financial well-being and closely connect lending, payments, and wealth management services. And, of course, maintaining superior customer experience and seamless connectivity to an ecosystem of other apps/application program interfaces (APIs) could be the norm. Offering advice should be a differentiating factor for banks as it becomes contextual and real time. Banks should rethink and innovate pricing models accordingly. In an open data environment, privacy concerns will also be a factor."
  • "How is wealth management changing? Banks are betting on their wealth management divisions to bring stability amid a looming downturn.87 However, increasing competition and commoditization are placing pressure on fees and margins, forcing greater price transparency. The elimination of a US tax deduction for investment management costs is further raising clients’ sensitivity to fees. On the regulatory front, wealth managers are grappling with the rising cost of compliance and increasing focus on KYC/AML and data protection.88 But more importantly, the implementation of the SEC’s new rules on fiduciary standards is set to increase the compliance requirements and drive additional changes to the business models and platforms of wealth firms operating in the United States.89 As expected, robo-advice has become table stakes. Virtually every large wealth firm has a digital advice platform. Independent robo players, however, are revisiting their business models, constrained by high client acquisition and servicing costs and low revenue yield. In response, some firms are offering cash management products and/or pivoting to a hybrid human-machine servicing model.90"
  • "On the client side, changing demographics are prompting a strategic shift for some in product innovation, service experience, and adviser training. More firms are targeting millennials, in particular, due to the size of the market, evolving wealth needs, and the impending wealth transfer. Thus, some firms are launching new products, including “impact investing,”91 innovative pricing models (for example, subscription-based pricing by Charles Schwab),92 and new asset classes (for example, music royalties by Royalty Exchange).93"
  • "Wealth management could become the core of the banking-customer relationship. However, in the decade ahead, the business might face its most pressing challenges, as asset prices may come under pressure amid slowing global economic growth. It is unlikely, though, that machines will replace human advisers, especially in serving the ultra/high net worth individual (UHNWI/HNWI) segments. Ability to provide real-time, tailored advice will become a key differentiator, along with the readiness to offer new products and asset classes, including digital assets. The industry could see unbundling of the value chain, with players focusing on what they do best, while other parts are outsourced. Wealthtechs, increasingly partnering with incumbents, could also be an important part of this ecosystem."
Quotes
  • "1. Serving a Segment of One According to Accenture, “Many banks have initiatives aimed at targeting demographic-based clusters such as young people, Millennials or older people, but some banks are now targeting customers based on lifestyles, values, aspirations, mindsets and underserved needs.” In 2019, many banking organizations will go beyond personalization by segment, to develop individualized communication and experiences for the segment of one. This is the ultimate level of innovative personalization allowed through data, advanced analytics and digital technologies. This level of personalization involves clustering a customer base with advanced criteria, where human-centric, design-thinking pillars and CRM tools help banks and credit unions match needs to solutions in real-time. One of the forgotten keys to success with segment-of-one personalization is estimating the potential customers’ willingness to pay for this added value. Or maybe, the key to success is a financial services organization’s willingness to monetize value in the way that Amazon sets pricing on delivering the value of Amazon Prime. Consumers must be ready to recognize the value behind a personalization solution and be willing and able to pay for it."
  • "2. Expansion of Open Banking More and more regulatory bodies globally are requiring banking organizations to enable customers to share their data securely with third parties to power new financial services and increase competition in the banking industry. By making account and payment data available through secure application programming interfaces (APIs), consumers have greater freedom and control in how they interact with their financial service providers. Open banking APIs accelerate innovation and collaboration, leading to expanded banking ecosystems that could include more than just financial services to make a consumer’s lifestyle better. What is exciting about open banking is that making consumer consent a central part of open banking strategy places an increased emphasis on consumer value propositions. In other words, if improved value isn’t part of the open banking consumer proposition, the customer will not allow the sharing of their data. Alternatively, those firms that provide the best consumer value proposition will be the relationship winners."
  • "3. Commitment to Phygital Delivery With the high cost of a traditional branch network and the increasing number of transactions moving to digital channels, more and more traditional financial services companies are introducing digital-only banking entities. Some banks are launching digital-only banks to collect deposits, while other financial firms are using digital platforms to provide lending, investing and specialty services. In each instance, the focus is on innovative customer experiences and increased value to the consumer, supported by customer data and advanced analytics that can personalize engagement."
  • "4. AI-Driven Predictive Banking One of the most exciting innovation trends in 2019 will be the continued movement to predictive banking. For the first time time, the banking industry can consolidate all internal and external data, building predictive profiles of customers and members in real time. With consumer data that is rich, accessible and financially viable to deploy, financial institutions of all sizes can not only know their customers, but also provide advice for the future. This enhanced use of data will enhance the consumer experience, while increasing security and efficiency. By moving from a rear-view-mirror perspective of customer communication to services deployed by robo-advisors and AI-driven chatbots, financial institutions will provide consumers with value through ‘next-best actions’ as opposed to blind selling of products. The real innovation will occur when financial institutions integrate this capability with the expanded services of open banking and connected devices."
  • "5. Payments Everywhere The payments industry has been, and will continue to be, one of the most dynamic areas of innovation in the banking industry. Impacted by changing consumer expectations and driven by technological advances, innovation will continue to come from traditional financial institutions, fintech firms and big tech players. "
Quotes
  • "The most prevalent trend in the banking industry today is the shift to digital, specifically mobile and online banking (more on each of those in a bit). In today's era of unprecedented convenience and speed, consumers don't want to have to trek to a physical bank branch to handle their transactions. This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners)."
  • "When broken down by generation, 97% of millennials use it (up from 92% in 2017) 91% of Gen Xers (up from 86%) and 79% of Baby Boomers (up from 69%). Critically for the banks themselves, 64% of mobile banking users said that they would research a bank's mobile capabilities before opening an account, and 61% say they would change banks if their bank offered a poor mobile banking experience."
Quotes
  • "Specifically, there are three interlinked macro changes that have contributed to a different playing field in consumer banking; new technologies, consumer behavior, and open banking regulations."
  • "Consequently, banks face the risk of customer service unbundling. For every service that bank customers stop using, banks lose an important contact point for relationship building and up-selling. Eventually, banks may end up in a situation where they can’t compete with any digital product, thus leading to pressured margins, loss of market share and customer churn."
  • "In order to avoid customer disintermediation, consumer banks need to make the digital customer experience a top business priority. If banks are expected to compete with best FinTech companies on digital experiences, thus mitigate the risk of service unbundling, they must commit to making digital banking better than the FinTechs. Building great digital products will require banks to obsess about customer behavior, and fulfill their needs in a beautiful, engaging and relevant way by using agile and data-driven methodologies."
Quotes
  • "PwC Retail Banking 2020 9 Of course, each of the macro-trends has a different impact on the retail banking industry, as well as on each specific institution. In this section we consider, in depth, the following four mega-trends we consider to have the greatest impact, although our thinking is informed by them all:•Rise of state-directed capitalism – regulation reshaping the industry and dictating business models.•Technology will change everything – becoming a potent enabler of increased service and reduced cost; innovation is imperative.•Demographics – changing priorities and opportunities for growth.•Social and behavioural change – rising customer expectations and the need to regain public trust.We also consider potential disruptors to those trends, and their implications. Figure 5: Project Blue – Framework and impact on banking landscape Project Blue Framework Adapt Plan Global Instability Demographic change Technological change Social and behavioural change Rise and interconnectivity of the emerging markets (SAAAME) Rise of state-directed capitalism War for natural resources"
  • "By 2020, we expect:•Wealth management will move alongside deposit-taking as a baseline service for retail banking. Banks without a strong wealth offering will lose share, as customers take increasing responsibility for their lifelong financial well-being and planning in both the developed and emerging worlds, and look for their bank to meet this need.•Fee-based revenues will increase as a percentage of total in developed markets and China, as consumers use longer working lives to save more and take out less (pay down more) debt, and as banks favour growing business such as wealth management and retail brokerage. In developing markets with economic and social stability, we will continue to see rapid credit growth. "
  • "Cities will continue to grow in attractiveness – as urban migration creates 1,000m new banked customers, as well as 800m new urban unbanked by 2040. •Banking the unbanked (urban and rural) will become a primary policy objective in both developed and emerging markets, as governments seek to reap the economic benefits of broader access to financial services for their populace. This push will drive new products and business models, and will become the primary focus of governmental or state-sponsored institutions, particularly where the private sector is unable to fulfill the need"
  • "By 2020 we expect:•Banks will organise themselves around customers instead of products or channels. They will offer a seamless customer experience, integrating sales and service across all channels. They will develop the ability to view customers as a ‘segment of one’, recognising their uniqueness, and tailoring their offerings so that customers view banks as ‘meeting their needs’ not ‘pushing products’.•Banks (in most countries) will evolve their customer experience to be more female-friendly. In one US survey, 73% of women said they were dissatisfied with the financial services industry. Complaints range from a lack of respect, to being given contradictory advice and worse terms than men. Winners tomorrow will address this through a combination of branding, product and service solutions. We expect many more bankers to be women in 2020, and many more banks to publicly state this as an ambition.•Social media will be the media.Today, we view social media as co-existing alongside traditional media. By 2020, social media will be the primary medium to connect, engage, inform and understand your customers (from the mass ‘social mind’ to the minutiae of each and every individual), as well as the place where customers research and compare banks’ offerings. And, as today formation and opinion (good or bad) can be amplified, creating new risks and opportunities. Mastery of social media will be a core competency.•Customer trust will be returning.Some banks will benefit significantly from taking a leadership role in the public debate. The leading firms will have reclaimed at least some of the high ground they lost in the financial crisis and begin to reshape public opinion. T"
Quotes
  • "These initiatives have driven the top three trends and predictions for 2020: Customer-centric perspective and the elimination of friction from the customer journey (58%). Real-time intelligent data integration through the use of AI, advanced analytics and cognitive computing (43%). Use of APIs for the transformation to an open banking platform (33%). "
  • "The banking industry is transforming incrementally as opposed to dynamically. Disruptive transformation within the banking industry will require the development of partnerships or expanded collaboration with outside organizations. It will also require modernization of outdated technologies and the rethinking of legacy processes and organization structures. The timing of this transformation will differ from one organization to another, but the need for new thinking is non-negotiable."
Quotes
  • "Big tech companies, with their armies of top-notch developers and knack for creating convenient products, raised their profile in financial services in 2019. But that appears to be just the start of their efforts. Apple launched its Apple Card with Goldman Sachs in August. Facebook announced Facebook Pay, a payment mechanism that works with Messenger, Instagram, WhatsApp and Facebook, in November. Big tech companies, meanwhile, expanded their small-business lending efforts. Amazon Lending lent an estimated $1.5 billion to sellers in 2017 and $1 billion in 2018. PayPal makes more than $1 billion in working capital loans every quarter (70% of them in neighborhoods where banks have shut down branches, according to the company) and Square Capital has made $5.5 billion worth of loans to 275,000 sellers over the past five years. Stripe launched its own working capital arm, Stripe Capital, in September."
  • "The Square Cash debit card is used by 3.5 million people, the company also launched a debit card for businesses in January. Square also has a Square Cash app for person-to-person payments. Uber is building a stable of financial services products for drivers and customers in its recently created Uber Money division. It already offers a bank account, debit card and mobile banking app through Green Dot. Uber plans to let drivers automatically save a portion of each trip and create a holistic financial wellness app Some tech companies have tipped their hand about their 2020 plans: Google plans to offer checking accounts to consumers through Citigroup and Stanford Federal Credit Union. Facebook plans to launch a cryptocurrency payment network next year based on a new digital asset, Libra. Though Congress and regulators have slammed this effort, it should not be counted out."
  • " Banks and fintechs prioritize providing customers insights It’s been a holy grail for some time: the ability to give customers just the right piece of advice in the moment they need it. Banks and fintechs are getting closer, and expected to increase their efforts this year. In 2019, Huntington Bank rolled out Heads Up, artificial intelligence-based software that gives customers advice on saving, spending and achieving financial goals. An alert might say that given spending activity and upcoming bill due dates, a customer’s current account balance may not cover their expected activity over the next seven days. Subscription payment alerts tell customers when they are being charged for a subscription or when a free trial may have ended. Other alerts notify customers when they may have been mistakenly double-charged by a merchant or restaurant. The insights are driven by Personetics’ Engage software, which uses predictive analytics to monitor transaction data in real time and identifies user-specific spending habits to provide insights to customers. Wells Fargo offers similar advice to customers who may be overspending and who have bills coming up, also using Personetics’ software. Bank of America’s homegrown Erica virtual assistant also alerts customers when they may have been charged more than once for a purchase so they can take immediate action. Erica will then guide them through the process of filing a dispute when necessary."
  • " Banks find additional ways to partner with fintechs HSBC launched a digital lending platform over the past summer partly built with technology from the fintech Amount. Such partnerships will multiply as other banks look to enter into the digital lending space in 2020. There are several online lenders that license their software to banks, including Kabbage and Upstart. Blend, Figure Technologies and Amount, a spinoff of the fintech lender Avant, expect to increase the amount of banks they work with to provide better, and faster, digital lending options to consumers. Banks such as Banco Popular, TD Bank and Regions Bank are licensing loan origination technology from Amount. Blend is expanding into auto loans, and working with BMO Harris Bank and others to improve the digital experience for home equity loans and deposit account opening products. At the time of its platform launch, HSBC acknowledged the market has long been dominated by the likes of LendingClub and Social Finance. "
  • "Both Wealthfront and Betterment now offer high-interest cash accounts in combination with an automated investment account. Wealthfront additionally plans to begin offering mortgages this year. The industry should expect such tougher rhetoric as competition for savers and borrowers becomes fierce. According to a survey of more than 1,000 U.S. banking customers by Statista, over half of respondents said they were either already using a digital-only bank as an alternative or were familiar with the option and probably going to use it."
  • " Challenger banks bulk up A number of challenger banks in the U.S. — including Chime, MoneyLion, N26 and Varo Money — are are well on their way to becoming more complete financial services providers in 2020. Chime and Varo [CEO Colin Walsh pictured above] each have plans to offer robo advice in 2020, following a trend led by traditional banks in 2019. Additionally, Varo will issue credit cards once it is fully licensed, while also expanding upon its current lending options. Boosting Chime's efforts was its $500 million funding round in December, giving it a valuation of $5.8 billion. Newcomer HMBradley, which launches in Q1 2020 with financial backing of PayPal and Affirm co-founder Max Levchin, has a plan to offer auto, home equity and other types of loans. "
  • " The workforce will be adjusted for digital-first Accenture estimated that more than 50% of tasks performed by loan officers, financial advisers, bank supervisors, loan clerks and tellers could be automated and augmented by 2025. The research firm estimated that North American banks could save more than $70 billion through 2025 using technology to automate jobs or assist employees. In 2019, Bloomberg News reported more than 50 lenders around the world had announced plans to cut a combined 77,780 jobs, the most since 2015, according to filings by the companies and labor unions. OceanFirst Financial in Toms River, N.J., retrained its employees for digital banking roles, covering every facet of the bank’s digital capabilities, including biometric identification, personal finance management, online account opening and video banking. Despite closing 34% of its branches, it has been able to keep 94% of the customers who banked at those locations. In fact, all its online banking services have seen activity increases. Mobile deposits, for example, rose 81% in 2019. "
Quotes
  • "Banks explore point-of-sale (POS) financing with fintechs: Banks are teaming up with fintechs to move into the POS financing market. POS financing is when a merchant offers their customers a financial solution at the point of purchase in order to assist them in buying the product or service. Fintech company Affirm, in partnership with Cross River Bank, partnered with Walmart last year to offer POS financing online."
  • "Banks explore unsecured consumer lending through digital channels: The unsecured consumer lending business has become a fast-moving marketplace and major banks have begun extending their lending services in collaboration with digital tech platforms. HSBC began using Avant’s digital lending platform Amount in 2018 to process and lend to consumer digitally."
  • "Banks are leveraging blockchain to improve know-your-customer (KYC) and identity management: Banks are looking at blockchain technology to streamline KYC and identity management solutions and manage regulatory requirements more effectively. Several consortia have been established to study and implement blockchain for KYC. OCBC Bank, HSBC and Mitsubishi UFJ Financial Group (MUFG), for example, successfully completed a proof-of-concept for a KYC blockchain in 2017."
  • "Banks embrace design thinking: Banks are organizing workshops to gain first-hand insight into customer needs and expectations, and are creating product prototypes to match the digital experiences customers seek. Australia’s Bankwest, for example, has conducted design-thinking customer workshops to create a seamless loan application process for small and medium-sized enterprise (SME) customers, the report says."
  • "Leveraging AI to create a seamless customer onboarding journey: Banks are investing in AI through natural language processing (NLP), biometrics, optical character recognition (OCR), and more, with the goal to provide superior customer experience and improving the onboarding process. Standard Bank South Africa has been using Workfusion’s AI-backed automation cloud solution to reduce customer onboarding time from 20 days to just five minutes, and Royal Bank of Canada launched last year an AI-backed, personalized budget solution."
  • "Collaboration with regtechs continues to rise: Financial institutions are engaging with regtech firms and outsourcing their compliance functionality to test and deploy regulatory solutions faster. ING Bank and the Commonwealth Bank of Australia (CBA) have been using Ascent’s regtech solution to automatically generate audit report and help them manage their compliance activities."
  • "Banks embrace technology for risk-compliance initiatives: Banks are embracing the potential use of technologies including AI and ML, big data, cloud and robotic processing, to meet regulatory requirements, automate compliance processes, improve operational efficiency, fight cyber-attacks, and more. The People’s Bank of China, for example, is using AI, big data and cloud computing to improve its ability to identify, prevent and decrease cross-market and cross-sector financial risks."
  • "Open X will require players to work collaboratively: The industry is transitioning to service rebundling and shifting towards the so-called Open X ecosystem. Within this new ecosystem, banks will provide personalized products and services by extensively leveraging data, and will have to collaborate with other ecosystem partners to garner relevant information. Banks are already capitalizing on the shared marketplace and have launched several initiatives. HSBC for example offers an app called Connected Money which lets customers view their accounts at up to 21 different banks in one place."
  • "Offering superior customer experience through contextual banking: Banks are leveraging cutting-edge technologies to offer a contextual banking experience and offer customers the right products at the right place and time. The CBA launched in mid-2019 its CommBank App 4.0 update which offers personalization tailored to individual customer needs. In Singapore, OCBC has embedded Clinc’s conversational AI in its mobile app to provide customers with voice-enabled instant access to their financial information."
Quotes
  • "Like it or not, Millennials are unavoidably becoming an important part of the population, and you’ll need to appeal to them as potential clients. The influence of mobile phones has affected not only the way they communicate but also the way they make purchases. In today’s tech world, the majority of Millennials—and all consumers for that matter—turn to online reviews before making a purchase."
  • "93% of Millennials rely on consumer reviews before making a purchase"
  • "Additionally, consumers aren’t trusting traditional advertising like they used to. In fact, 84% of Millennials don’t trust advertising at all, according to Hubspot. Social media, blogs, and online reviews have largely replaced traditional advertising. Young people now rely on their social networks to decide which product, service, and even family dentist to go with"
  • "ratings for local businesses have become vital to the growth of any business, especially healthcare practices. In fact, 72% of consumers say that positive reviews make them trust a local business more, according to BrightLocal—which is up 14% in just 4 years, and growing."
  • ""
Quotes
  • "Many millennials rely on their checking and savings accounts to help manage their finances, but they're increasingly swapping out traditional brick-and-mortar banks for new banking options. When millennials become unhappy or dissatisfied with their bank, they're not afraid to move to greener pastures. According to a Gallup poll, millennials are 2.5 times more likely than Baby Boomers and 1.5 times more likely than Gen Xers to switch banks."
  • " Millennials want to carry out their banking activities with minimal fuss, and they routinely rely on technology to help them do it. Forty-seven percent of millennials use mobile banking, according to a survey from Jumio and Javelin Strategy & Research, just over twice the number of Baby Boomers who bank via their mobile device. Millennials are logging into their mobile banking apps most often to: Schedule person-to-person money transfers Transfer funds between accounts Check their transaction history "
  • "In a Kasasa survey, 83% of millennials said they'd be willing to switch banks for better rewards, such as a higher interest rate on deposit accounts, cash-back on purchases, and foreign ATM fee refunds. 94% of millennials also said that no-fee banking was a priority, which is no surprise given that many 20- and 30-somethings are juggling substantial student loan debt, which could be eating up a large chunk of their budgets."
  • " Neobanks—fintech companies that take a tech-focused approach to banking and finance—are gaining ground among millennials. Neobanks can offer traditional banking services, such as checking or savings accounts, but they can also span a broader range of products and services, such as: Payment and money transfer services (think Venmo or Square Cash) Online personal and business loan providers Investing and savings apps Bill payment and expense tracking apps "
  • "Neobanks typically don't have branches, and many are intended to compete directly with bigger brick-and-mortar banks. Some neobanks, however, are offshoots of existing banks, credit unions, or financial institutions. Marcus, for example, is the online banking division of Goldman Sachs Bank USA."
  • " The primary appeal of neobanks, particularly for millennials, is their streamlined and tech-centered approach. Neobanks offer mobile banking, but they can go beyond the standard banking features. They offer things like faster loan approval and funding compared to regular banks. Neobanks have low or no banking fees at all, broader ATM network access or ATM refunds, and built-in money management and budgeting tools. All of these features give millennial banking customers more control over their finances. Because neobanks are often branchless, they typically have lower overhead costs. That allows them to pass on higher interest rates on deposit accounts, including high-yield savings accounts. Some of the best high-interest savings accounts, for example, offer an annual percentage yield (APY) that's 20x or more than the national average APY. "
  • "66% of millennials visited a bank branch in the previous six months, according to Gallup's research."
  • "Eighty-two percent of the nation's largest credit unions, for example, offer free checking compared to just 38% of banks."
Quotes
  • "Accounts at Marcus by Goldman Sachs are designed for consumers who want to earn a higher yield than what their current bank or credit union is providing."
  • "Marcus by Goldman Sachs is a direct bank that offers personal loans and rewards savers with higher payouts."
  • " Marcus by Goldman Sachs consistently offers a competitive yield on its savings account. It only requires $1 to earn a competitive APY. No monthly fees. "
Quotes
  • "#3—megabanks have the best service in the business—as the predominant reason for why so many Millennials bank with the large banks."
  • "From the bankers’ perspective, service is something provided by their employees in branches and call centers. From the consumers’ perspective, however, service means getting stuff done—and for many consumers (Millennials, in particular) the way to get stuff done is through their mobile devices. "
  • "On average, the four megabanks (BofA, Chase, Citi, and WF) offer nearly 16 of the 18 value-added mobile banking features on their apps. Banks in the $50 billion to $1 trillion range average 10 features, and banks in the $10 billion to $50 billion range have, on average, just seven of the 18 features."
  • "The conclusion is inescapable: The megabanks are dominating the Millennial market because they offer more mobile banking capabilities."
Quotes
  • "The Commonwealth Bank of Australia (CBA) has launched its new banking app, an upgrade to the platform that was first released in 2013. The new app is touted by the bank as offering greater personalisation, tailored specifically to the individual needs of each customer, with personal cash flow management and smart alerts all aimed at keeping more money in customers' wallets."
  • "the bank decided it could bring all of its technology and digital capability in data and artificial intelligence (AI) to "really solve problems for customers"."
  • "The bank boasts that 7 million customers are active on digital channels "
  • ""It's targeted, it's personalised, and it's customised for you by you. Customisable like an iPhone and personalised like Netflix recommendations," he said."
Quotes
  • "With a startling 6.6 million people seeking jobless benefits last week, the United States has reached a grim landmark: Roughly one in 10 workers have lost their jobs in just the past three weeks. The figures collectively constitute the largest and fastest string of job losses in records dating to 1948. They paint a picture of a job market that is quickly unraveling as businesses have shut down across the country because of the coronavirus outbreak. More than 20 million American may lose jobs this month."
  • "The government-mandated business shutdowns that are meant to defeat the virus have never brought the U.S. to such a sudden and violent standstill. For that reason, economists are struggling to assess the duration and severity of the likely damage."
  • "The Penn Wharton Budget Model, created at the University of Pennsylvania’s business school, projects that the U.S. economy will shrink at an astonishing 30% annual rate in the April-June quarter -- even including government’s new $2.2 trillion relief measure, the largest federal aid package in history by far. That would be the largest quarterly economic plunge since World War II."
Quotes
  • "The global economy is set for its sharpest reversal since Great Depression, IMF warns"
  • "“Never in the history of the IMF have we witnessed the world economy coming to a standstill,” she said. “It is way worse than the global financial crisis.”"
  • "Emerging markets and developing nations are hit especially hard by lockdowns and need special help. At the briefing with the World Health Organization, Kristalina Georgieva also outlined key measures that the IMF will take to help the world's most vulnerable."
  • " Prioritized help for emerging markets and developing economies, given their fewer resources, collapsing commodities markets, and weakened health systems. Mobilizing emergency funding and doubling the availability of those resources from $50 billion up to $100 billion. Increasing capabilities to ease debt service obligations for the IMF's poorest members through the Catastrophe Containment Relief Trust and advocating for a standstill of debt service from the poorest countries to official bilateral creditors."
Quotes
  • "Credit Decisions. Having good credit aids in receiving favorable financing options, landing jobs and renting an apartment, to name a few examples. With so many of life's important necessities hinging on credit history, the approval process for loans and cards is more important than ever. Artificial intelligence solutions are helping banks and credit lenders make smarter underwriting decisions by utilizing a variety of factors that more accurately assess traditionally underserved borrowers, like millennials, in the credit decision making process"
  • "ZestFinance is the maker of the Zest Automated Machine Learning (ZAML) platform, an AI-powered underwriting solution that helps companies assess borrowers with little to no credit information or history. The platform utilizes thousands of data points and provides transparency that other underwriting systems cannot, which helps lenders better assess populations traditionally considered "at risk." ZAML is an end-to-end platform that institutions can implement and scale quickly. "
  • "DataRobot provides machine learning software for data scientists, business analysts, software engineers, executives and IT professionals. DataRobot helps financial institutions and businesses quickly build accurate predictive models that enhance decision making around issues like fraudulent credit card transactions, digital wealth management, direct marketing, blockchain, lending and more."
  • "In addition to other financial-based services, Scienaptic Systems provides an underwriting platform that gives banks and credit institutions more transparency while cutting losses. Currently scoring over 100 million customers, Scienaptic's Ether connects myriad unstructured and structured data, smartly transforms the data, learns from each interaction and offers contextual underwriting intelligence. Industry impact: Working with one major credit card company, Scienaptic boasted $151 million in loss savings in just three weeks"
  • "AI assistants, such as chatbots, use artificial intelligence to generate personalized financial advice and natural language processing to provide instant, self-help customer service. "
  • "TD Bank Group announced plans to integrate Kasisto's technology into their mobile app, providing customers with real-time support and spending insights. "
  • " Abe AI is a virtual financial assistant that integrates with Google Home, SMS, Facebook, Amazon Alexa, web and mobile to provide customers with more convenient banking. The assistant provides services ranging from simple knowledge and support requests to personal financial management and conversational banking. Industry impact: In 2016 Abe released its smart financial chatbot for Slack. The app helps users with budgeting, savings goals and expense tracking."
  • " Trim is a money-saving assistant that connects to user accounts and analyzes spending. The smart app can cancel money-wasting subscriptions, find better options for services like insurance, and even negotiate bills. Industry impact: Trim has saved $6.3 million for more than 50,000 people, according to a 2016 VentureBeat article."
From Part 04