A Fintech Filter for Artificial Intelligence in 2017

In what The New York Times is calling The Great AI Awakening and Forbes has dubbed The Year of AI, 2017 is shaping up to be obsessively focused on artificial intelligence, a field that has been around for awhile (remember playing checkers against a computer?) but has finally matured to the point of usefulness.

Because the technology has finally reached its tipping point, AI, and its close relative machine learning, have taken a variety of industries by storm, bringing self-driving Ubers to the streets of San Francisco (and then carting them away); robotic vacuum cleaners to dirty household floors; and natural language processing to chat bots and IVR communications. With AI already embedded into these industries, it’s easy to find examples of how the technology is shaping fintech.

Below are eight areas of fintech into which AI has made inroads. Each area is ranked and rated (out of 5 stars) based on how it is currently influenced by AI and based on AI’s potential to add value.

Robo advisory

  • Fintech example: Robo advisors are built on AI technology, which is used to augment portfolio management and rebalancing decisions typically made by a (sometimes biased) human. To see tens of dozens of these examples, check out our post on B2C wealth tech.
  • Current AI application: 4 stars
  • Potential AI application: 5 stars

AI is already a standard tool in robo advisory. Because the very nature of robo advisors is to replace humans, the potential application of AI in this space is huge, especially when enhanced with machine learning and held accountable using blockchain.

Advisory tools

  • Fintech example: Similar to B2C robo advisory platforms that leverage AI to automatically manage and rebalance users’ portfolios, advisors can automate their clients’ portfolios to minimize human error while still offering a personal touch. Kensho (FEU14) introduced Warren to helps advisors perform quantitative analyses on market data. ForwardLane (FS16) uses AI powered by IBM Watson to offer financial advisors access to quantitative modeling and highly personalized investment advice generally only available to ultra high net worth individuals.
  • Current AI application: 4 stars
  • Potential AI application: 5 stars

Just as AI is already standard in direct-to-consumer robo advisory, so is it with advisory tools, since many were built on the premise of AI.

Fraud detection

  • Fintech example: Multiple card issuers use AI to detect unusual spending activity. Feedzai (FEU14) uses AI combined with machine learning to analyze sets of big data created during a user’s online sessions to mitigate fraud associated with online account opening, payments, and ecommerce.
  • Current AI application: 4 stars
  • Potential AI application: 5 stars

AI is already heavily leveraged for use in fraud detection. Combining it with the blockchain, which can provide an un-editable ledger of events, paired with AI’s ability to analyze large data sets in real time makes it even more powerful.

Underwriting

  • Fintech example: AI can help underwriters create a uniform metric that accurately identifies risk across borrowers. Aire.io (FEU15) leverages the power of AI to create and assign credit scores to thin credit file individuals.
  • Current AI application: 4 stars
  • Potential AI application: 5 stars

The lending industry has already transformed its underwriting practices from relying on large databases to now using AI to analyze large amounts of scattered, unstructured data. Because AI can analyze these data sets in real time, there’s great potential for both borrowers and lenders to benefit.

Regulatory compliance

  • Fintech example: Banks can use AI to quickly scan legal and regulatory text for compliance issues, and do so at scale. IpSoft’s Amelia is a customer service bot that helps banks maintain compliance in conversations with customers.
  • Current AI application: 3
  • Potential AI application: 5

Relying on AI to scan for compliance issues instead of a team of employees helps avoid human error and allows financial institutions to quickly analyze multiple documents and practices. Because it removes human biases and error, AI has great potential in regulatory compliance.

Marketing

  • Fintech example: Marketers can better up-sell or cross-sell banking and finance products by using AI to identify and anticipate client needs. SBDA Group (FEU 16) helps banks leverage their data using algorithms and machine learning to create targeted marketing campaigns for individual customers.
  • Current AI application: 3 stars
  • Potential AI application: 4 stars

Fintech companies have been using AI to draw conclusions from bank data for a few years now, but marketing is an area in which human input still adds a lot of value.

Customer service

  • Fintech example: Firms can leverage AI to identify which clients are at most risk of leaving a bank or advisor. FinovateAsia 2016 Best of Show-winner, Finn.ai (FA16), offers a white-labeled chat bot that integrates into existing messaging platforms such as Line, Facebook Messenger, Alexa, and even the bank’s web chat interface.
  • Current AI application: 2 stars
  • Potential AI application: 5 stars

Banks have been hesitant to adopt chat bots and other AI-based customer service products because the technologies are not quite smart enough. Finn.ai overcomes this challenge by offering a Talk to a Human button at the bottom of the chat interface. This technique, combined with the implementation of machine learning and advanced natural language recognition, makes this space prime for growth in 2017.

Reporting tools

  • Fintech example: Advancements in natural language, along with AI’s ability to analyze large data sets, have made it possible for banks to rely on software to automatically create and distribute reports. Narrative Science (FF13), for example, automates the creation of anti-money laundering reports and allows the bank to adjust for the tone of the writing.
  • Current AI application: 2
  • Potential AI application: 4

We’ve seen AI used to generate reports, both in written and video form, in the wealth management and compliance sectors. However, there is still room for natural language reporting to extend to other forms (such as inside of a chat interface) as well as to other sectors of fintech.


In addition to these eight areas of fintech, there is a miscellaneous category that comprises technology such as ColletAI, which automates debt collection. Check out CollectAI, Comarch, and MoneyHub, along with other AI-based fintech at FinovateEurope next month.

While AI is widespread in many areas of fintech, it is still far from others, such as tax and estate planning, which require complex inputs and decision making. However, bolstering AI in these difficult areas using machine learning, the blockchain, and human intervention offers some potential for growth in 2017.

Since AI is pervasive throughout many sectors of fintech, it may not be too early for your company to begin searching for a Chief Artificial Intelligence Officer.

SBDA Group Wins Gold, Sedicii Takes Silver at UniCredit Hackathon

UniCredit_SBDAGroup

Two Finovate alums took home top honors at the UniCredit Appathon event this week. SBDA Group won first place for its Smartbanking app that uses transaction data to help users budget and manage their finances. Coming in second was Irish authentication specialist Sedicii, whose technology enables customers to authenticate themselves to a network or service without having to share a password or other personal information.

The goal of the Appathon is to stimulate innovation “both within and beyond the bank” said Paolo Fiorentino, UniCredit Deputy General Manager. Indeed, the first place prize of the hackathon is the chance to work with a team from UniCredit Business Integrated Solutions (an opportunity valued at €50,000). The second place prize was a pair of tickets to FinovateLondon 2017 (an awesome award, in our humble opinion), and the third place winner, Rome’s All Industries, won a virtual reality headset for its digital financial assistant, TalkForce.

UniCredit_SediciiNow in its third year and conducted 100% online for the first time, UniCredit’s fintech hackathon featured more than 190 teams across Europe. The event was judged by senior managers from both UniCredit and its subsidiary, UniCredit Business Integrated Solutions. Teams were asked to demonstrate a solution in one of three categories: digital payments, digital wallets, and” instantaneous delivery of complex information using big-data analytics.” 70 cities from 26 European countries were represented, with most of the team (32) coming from Italy. Also participating were 10 “international” teams. The judges evaluated each solution on the basis of technology, completeness, innovation, feasibility, subject matter, and API relevance.

Founded in 2014 and headquartered in London, SBDA Group demonstrated its SBDA Customer Insight solution at FinovateEurope 2016. The company’s solutions include Sberbank Messenger, demonstrated at FinovateSpring 2016 by Russia’s Sberbank and mobile banking app, Sense, demonstrated at FinovateFall 2015 by Alfa Banking Group. Check out our Finovate debut profile of SBDA Group from earlier this year.

A finalist in the Innotribe Startup Challenge and one of five Finovate alums to be included among the World Economic Forum’s 2015 Technology Pioneers, Sedicii’s authentication service can be used instead of one-time passwords, as well as deployed in a tele-service environment, and is effective against man-in-the-browser, man-in-the-middle, and server-side attacks. The company demonstrated its authentication platform at FinovateEurope 2015.

Finovate Alumni News

On Finovate.com

  • Mastercard to Buy VocaLink for Up to $1.14 Billion After Masterpass Expansion to Retail
  • Finovate Debuts: How Blend is Reinventing the Mortgage Application Process
  • SBDA Group Wins Gold, Sedicii Takes Silver at UniCredit Hackathon

On FinDEVr.com

  • Mexico’s Grupo Bursátil Deploys Messaging Tech from Solace Systems

Around the web

  • GMC Software Technology announces integration with DocuSign to streamline business workflows.
  • Cloud Lending Solutions adds new online modules to its Learning program.
  • Google Cloud Platform opens its first West Coast region.
  • Rapid Financial Solutions Partners with Cachet Financial Solutions to Deliver Mobile Money Solutions to More Than 2 Million Cardholders
  • The Tennessean lists ProfitStars in Nashville’s top workplaces for 2016.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Debuts: SBDA Group Turns Raw Banking Data into Targeted Marketing

SBDAGROUPHomepage

SBDA Group began from the realization that banks are not making use of most customer data. The London-based company helps banks leverage the data to create a more personalized banking experience through machine learning and data science.

The founders originally started SBDA Group as a consultancy. After working with a large European bank and gaining insight into its data problems, it was decided to productize the offering. The result was SBDA Customer Insight.

SBDA Customer Insight helps banks launch a campaign to target customers by using observations from internal data, such as transaction history, and external data, such as social network activity, to determine which customers to include in each campaign. After the customer segment is defined, the bank uses a step-by-step campaign widget to tailor and launch the campaign.

Company facts:

  • Founded in 2014
  • Headquartered in London
  • Self-funded
  • Profitable
  • Its algorithms cover 70+ million customer profiles
SBDAGroupStageCEO Nikita Blinov, Chief Data Scientist Alexander Fonarev, and Project Manager Anna Laskovaya presented at FinovateEurope 2016 in London.

NikitaSBDAGroupAt FinovateEurope 2016, we interviewed Nikita Blinov (LinkedIn), the company’s CEO. Blinov holds a masters degree in mathematics. Prior to founding SBDA Group he served in a variety of positions at Yandex over the course of five years. Most recently, he served as Head of Yandex’s Local Search.

Finovate: What problem does SBDA Group solve?

Blinov: The problem that we solve is lack of personalized communications in retail banking. Banks have huge amounts of customers’ real-life data, but in general don’t use this data to make their communications as personalized as it could be. It happens because the process of launching a campaign is quite complicated and involves a huge number of teams. And one of the longest steps is analytics. As a result, it takes months just to launch one campaign and it’s obviously too expensive to be done on a regular basis.

Finovate: Who are your primary customers?

Blinov: Top-tier retail banks and financial services.

Finovate: How does SBDA Group solve the problem better?

Blinov: Using data science methods, SBDA Customer Insight turns raw banking data – such as transactional histories – into targeted marketing and customer relationship management with a platform that portfolio and product managers will love to use. It enables them to select customers by their real-world activities to make a bank’s campaigns highly personalized. And after that, Customer Insight provides an end-to-end solution for coordinating the campaign with other specialists and for launching it in a few minutes. As a result, it saves months of work from the bank’s developers, marketing managers and analysts and sets up an efficient, targeted-offers creation-process based on real-life events of bank customers.

Finovate: Tell us about your favorite implementation of your solution.

Blinov: The most interesting one is Alfa-Sense, which was launched at Finovate Fall 2015. That’s Alfa-Bank’s new generation mobile banking app working preventively. It predicts why each particular customer at each particular time might want to use the app and comes to him preventively with a push-notification offering a solution.

Finovate: What in your background gave you the confidence to tackle this challenge?

Blinov: Previously, our executive team worked together at Yandex, the largest European search engine, on various services such as heads of services, technical leads, and data scientists. So we realized pretty well what a big impact personalization can bring to the business. That’s why we decided to move to the financial services sphere which has such a great potential from that point of view.

Finovate: What are some upcoming initiatives from SBDA Group that we can look forward to over the next few months?

Blinov: We are actively working on other applications of our core technology, for example using AI, conversational commerce and other directions. Stay tuned and join us at future Finovate events to know the details!

Finovate: Where do you see SBDA Group a year or two from now?

Blinov: In the long term the main aim of SBDA technologies is helping banks move from a utilitarian tool to a personal financial assistant. To become a service that understands the client’s financial situation better than anyone else and preventively and proactively help him solve his everyday tasks related with finance. So the bank could solve his client’s everyday personal financial tasks and become highly personalized. And we are eager to provide banks a platform for that.

Finovate Alumni News

On Finovate.com

  • “Live Trading Launches on SwipeStox for iOS & Android”
  • “Finovate Debuts: SBDA Group Turns Raw Banking Data into Targeted Marketing”

Around the web

  • D3 Banking subscribes to market intelligence solution, FI Navigator.
  • California-based Yolo FCU chooses Insuritas to open and run its turnkey insurance agency.
  • Oregon’s Rivermark Community CU to deploy online and mobile banking solutions from Digital Insight.
  • PayNearMe facilitates users to pay for their taxes in cash.
  • Lending Club partners with Funding Circle and Prosper to launch Marketplace Lending Association.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

International Women’s Day: Celebrating Females in Fintech

WomenOfFintech

One question I’m always asked during a Finovate networking session is, “Why don’t you put more women on stage?” My answer: we don’t dictate the gender of the company’s presenter. We leave that decision up to the company.

This post is to celebrate the fintech industry’s growth of female inclusion. At the first Finovate conference in 2007, there were zero women on stage. Last month, at FinovateEurope 2016, 20% of the companies featured a woman on stage (party on!). Here’s a look at the ladies of FinovateEurope 2016:

AdviceRobo’s CCO Rosali Steenkamer

AdviceRobo

 

BankersLab’s Co-founder and CEO Michelle Katics

BankersLab

CREALOGIX’s Geraldine Critchley, head of digital marketing

ebankIT’s Diana Winstanley, business development

eBankIT

Envestnet’s SVP Molly Pandya, product management

Ethoca’s Helene Ladjadj, senior manager, issuer relations, EMEA

Ethoca

EyeVerify’s Director of Marketing Tinna Hung

EyeVerify

IT Sector’s Inês Domingues, market manager

ITSector

Livian Technologies’s Raquel Oliveira, head of product

LivianTech

myInvenio’s Modesta Jonauskyte, sales and marketing assistant

MyInvenio

Outshared’s Director Irene van den Brink

SBDA Group’s Anna Laskovaya, project manager

SBDAGroup

Spiff’s CMO Kristin Moller

Spiff

While not all of these women are CEOs of their company, each plays a role in removing women from the “endangered species list” of fintech.

While we still have a long way to go, we can all be encouraged by the movement that has already taken place and the global initiatives that have sparked growth. The FemTech Leaders MeetUp, organized by Ghela Boskovich and Michelle Moffatt, has held three successful events this year (I attended the London meetup last month, and the attendance was impressive).

If you’re interested in attending a FemTech leaders event (men are also invited to attend), check out the upcoming meetup in Sydney or RSVP for the meetup in New York after the first day of FinDEVr New York on March 29. It’s less than a 10-minute walk from the venue.

This post wouldn’t be complete without a shoutout to the ladies of Finovate and FinDEVr; the women who help make our events happen (editor’s note: And of course, Julie Schicktanz, the author of this post):

  • Leah Baldwin
  • Dom Marczak
  • Emily Olyarchuk
  • Erika Sanchez
  • Kate Schultz
  • Kate Stolte
  • Heather Stowell
  • Paula Wrzecionowska

Be sure to check out our celebration of International Women’s Day on the FinDEVr blog.

FinovateEurope Sneak Peek: SBDA Group

SBDAGroup_homepage_Jan2016

FEULogowithDateA look at the companies demoing live to 1,500 fintech professionals. Register today.

SBDA Customer Insight turns raw internal and external banking data into targeted customer-relationship management with a platform that portfolio and product managers will love to use.

Features:

  • Campaigns launch in 15 minutes
  • One person can handle whole campaign from end to end
  • More than 400 built-in insights about customers’ real life

Why it’s great
SBDA’s platform fills the gap between banking analytics and campaign execution.

Presenters

SBDA_NikitaBlinovNikita Blinov, CEO
LinkedIn

 

 

 

SBDA_AlexanderFonarevAlexander Fonarev, Chief Data Scientist

Fonarev’s responsibilities include supervision of data science projects, solving problems using machine learning and data-mining techniques, consulting external teams in data science, management of data science and analytics teams, and reformulation of the business objectives into the data-mining teams.
LinkedIn

SBDA_AnnaLaskovayaAnna Laskovaya, Project Manager
LinkedIn

 

Finovate Alumni News

On Finovate.com

  • Mitek Partners with Harland Clarke to Improve RDC Security”
  • Pindrop Raises $75 Million for Phone-printing Authentication”

Around the web

  • Gate City Bank ($1.9 billion in assets) chooses DNA core account processing platform from Fiserv.
  • Powered by FIS, the Venture Center is now accepting applications for its VC Fintech accelerator.
  • Venmo adds in-app merchant payments.
  • Algomi wins Risk Magazine’s “Trading Technology Product of the Year for the Buy-Side” for a second year in a row.
  • Experian enhances Small Business Credit Share program.
  • Credit Karma surpasses milestone: serves 50 million users who use Credit Karma to manage $3 trillion in debt.
  • Check Point releases new hardware to address cyber security and protection.

This post will be updated throughout the day as news and developments emerge. You can also follow alumni news headlines on the Finovate Twitter account.