5 Questions with Mary Kate Loftus, Senior VP and Director of Digital for M&T Bank

Partnerships between nimble fintechs and trusted banks are essential as we look to build back our economy. Mary Kate Loftus, a panelist in our FinovateFall Strategic Partnerships session, knows this well. As head SVP, Director of Digital for M&T Bank, she fields potential partnerships each month. We sat down with her to discuss what M&T looks for in a partner and where she sees the industry going.

How do you determine your needs for a fintech partner?

Mary Kate Loftus: With all things, we start with our customer. Our teams dive deep into the customer experience through journey mapping, and from this, we can see the pain points and what we need to create. Going about our innovation and partnerships from this perspective, rather than looking at our competitors and building to parity, allows us to create a truly differentiated experience.

When it comes to partnerships, we consider if we are best suited to meet the needs of the client or if we need to turn to an outside source that’s already focusing on these needs very deeply. Banks, like M&T, are able to work closely with their clients in a way that many fintech organizations are not able to do. But often fintechs, free of a complex organizational structure or process, are able to innovate in a very focused way. This ying and yang – the bank’s customer expertise and the fintech’s area expertise – allows for a truly meaningful partnership.

Once we identify a partnership need, we see if we’re aligned in our corporate purpose. This step is critical – it ensures that our approach will be both effective and long-term. Our purpose is to improve the lives of our customers in a meaningful way, and we look for partners looking to achieve the same.

What makes you take a meeting with a potential fintech partner?

Mary Kate: Referrals from existing clients, friends, connections, or colleagues are always a great way to start a potential partnership. Beyond that, I get excited to meet those who come with a clear vision of the problem they’re able to address and a strong understanding of our corporate promise. For us, it’s not enough to simply have a capability, but rather, we build for measurable results and long-term partnership.

Once we’re in the meeting, it all comes down to talent. We want to work with creative, imaginative, curious people, and we’re looking to see those qualities on day one. Together we want there to be a good energy in the room and, equally as important, great ideas.

Lastly, we’re looking to learn from our partners. What can you teach us about what we’re not yet doing?

Can you discuss the PPP rollout and how you overcame the challenge?

Mary Kate: M&T’s successful PPP rollout was thanks to a strong set of existing partnerships and a creative team that was ready to scale nearly overnight.

Before the pandemic, we were working with Blend for our mortgage digital originations so we were already aligned in our purpose. The leadership teams from both organizations were just starting conversations on how we could work together more when the PPP program was announced, and so we knew they were the partner to tap. A cross-functional team brought in Salesforce and Docusign – two other existing partners – to complete the experience.

Within minutes of the program launching, we had thousands of applications. Together, we were able to lead the country in loan fulfillment– 96% of first round loans went through within days — giving $7 billion in funds to small businesses. More importantly, our partnership allowed us to still meaningfully vet the applications, and we’re proud to say that two thirds of the loans issued went to businesses with less than 10 employees.

Our PPP response was led by Eric Feldstein, M&T’s SVP who oversees Business Banking. It’s a success story about the importance of having strong leaders with digital expertise leading a line of business. I believe this successful rollout in a time of real crisis for many will create lasting loyalty in our customer base.

What near-horizon banking technology are you most excited about?

Mary Kate: I’m a big believer in the science behind behavioral analytics and how you motivate customers by understanding how people think.

Every customer is going through a different experience. If one client is going through a life change like having a child or going through a divorce, it’s important to be able to anticipate financially what that journey might look like for them. As we are able to embed more artificial intelligence and meaningful insights, we’ll be able to guide customers toward better decisions that then will improve the quality of their life.

This is why we’re so focused on experience mapping to identify customer journeys — from there we’re able to understand what the moments that matter most are for different segments of customers. When you apply data and insights against those experiences, you’re then able to build a personalized micro-experience. What we’re doing today is lightyears ahead of what we were doing in the past, and I can’t wait to see how much more we can do in this space.

The pandemic is only going to accelerate this. We’re seeing a blend of work and personal lives, and with this, I think the financial services industry will play an even bigger role in making a difference in people’s lives.

What role does the need for diversity play in banking partnerships?

Mary Kate: Diversity plays an absolutely critical role in these partnerships.

At M&T, we know the more diverse voices we have in the room the better decisions and outcomes you can drive for customers. As an institution, you must reflect your community and customers, so you need to draw from a broad range of experiences in order to drive the best business performance and outcome.

When choosing a partner, we look at who we’re working with. We look at what systems are in place and watch out for those that could create outcomes that we don’t want to drive, and, conversely, for those that will drive us further.

This goes back to what I was saying earlier about learning from a partner. Yes, we want cutting-edge technology that will solve customer pain points, but sometimes these pain points are solved through systems, processes, or approaches. We’ve found that by working with a diverse set of partners, we’re able to think in more comprehensive, customer-centric ways.


Mary Kate Loftus is the Senior Vice President, Director of Digital for M&T. She joined the Bank in 2018 as the Head of Strategic Planning for the Consumer & Business Bank. Mary Kate is a career banker with over 20 years in financial services with experience in Digital, Branch Management and Contact Center. Mary Kate holds an MBA from Canisius College, is a 2013 graduate of the Consumer Banker’s Association Executive Banking School and is a member of their Digital Channels Committee in addition to other industry forums


Photo by Photos Hobby on Unsplash

Payroll in the New Normal

These days, you would be hard-pressed to find anyone whose job hasn’t changed because of COVID-19. And since payroll plays a major role in customers’ careers, we wanted to explore the ins-and-outs of how the “new normal” is impacting this subsector of fintech.

Today we caught up with DailyPay Chief Innovation Officer Jeanniey Walden to gain a better understanding of what the payroll and benefits space looks like in 2020.

The recent public health crisis has altered our way of life in many ways. How have you seen it change the employee benefits and payroll space?

Jeanniey Walden: The public health crisis changed everything about life as we knew it, overnight. This impacted every aspect of the workplace, especially in the employee benefits and payroll space. Business leaders had to reimagine, redevelop, and re-engineer how every element of their business works, while simultaneously supporting time-sensitive matters including payroll. The pandemic also drove HR and payroll leaders to leverage technology to design successful remote workforces, leveraging video, virtual coffee dates, mindfulness support and more. They also need to ensure employees were well taken care of, as dynamically and normally as possible, in a new world. On-demand pay is one of the technologies HR and payroll leaders pushed to the forefront in the payroll space supporting not just their employees’ financial needs during the pandemic but also the entire household. Concerns over access and timing of pay were eliminated with the adoption of this new technology.

In fact, DailyPay’s on-demand pay usage has been selected for use by 80% of Fortune 100 companies offering on-demand pay during the wake of the pandemic. And as many Americans became financially insolvent, a recent study indicated a 30% increase of on-demand pay usage relating to an increase in household dependency on a DailyPay user. To exacerbate the problem, unemployment benefits and deferral housing protection are expected to end in July, leaving many people scrambling to find more income.

We expect the changes in payroll and benefits will continue to evolve the hopes of alleviating financial stress as we try to acclimate to our new normal.

In what ways does the traditional payroll process have to reinvent itself to fit into the post-COVID digital era?

Walden: Throughout COVID-19, when and how fast employees get their pay has never been more important. Having access to their own funds has become the lifeline during the pandemic, not just for employees, but for their families as well.

As the pandemic evolved, many new people began using DailyPay to support ever-changing household needs, including their ability to make bulk PPP purchases, purchase data plan extensions on the cell phones, and even enable them to visit the grocery store or pharmacy early, before they became crowded, reducing their chances of getting sick. Today, access to on-demand pay offers families whose significant other has lost their job maintain a sense of normalcy in supporting the household.

The pandemic exemplifies how the current bi-weekly payroll cycle fails to timely and financially cover employees’ necessary and unexpected emergency costs. This is a wake-up call to companies to abandon the traditional payroll process and migrate to a digital, contactless pay solution which provides employees access to their earned pay and eliminates the two-week wait time that employees usually encounter with the traditional payroll process. Speed and safety are prioritized through digitization which ends up saving people valuable time and money.

Let’s talk diversity. How can companies attract a more ethnically diverse workforce?

Walden: Diversity in a company’s leadership and workforce is not just the right thing to do, it’s the smart thing to do. In this current social climate, employees are less inclined to work or apply to a company that is not taking any initiative to create a more diverse workplace. Now more than ever, employers need to take charge to create an inclusive, diverse culture that communicates their corporate values to their staff. Through regular diversity training and open dialogues with employees, companies can consistently reevaluate and update its workforce policies.

To continue to grow, companies need to learn how to retain their diverse employees. This can be easily done by offering employees benefits and opportunities to grow as an individual. Some benefits employers can offer workers are diversity programs, mentorship, inclusive workplace policies, and on-demand pay that provide employees flexibility.

While companies’ attitudes toward diversity can’t change overnight, employers can commit to taking action every day to promote diversity. Businesses need to understand that a “diverse workforce” isn’t a momentary trend and shouldn’t treat it as a tool to simply recruit candidates. It’s a long-term commitment to support and elevate all prospective and current employees.

One of the tricks to curating a diverse workforce is creating the right culture. What are some creative ways that small companies can ensure less turnover during such a volatile time?

Walden: The combination of younger generations in the workplace and the current health crisis has increased the pressure on employers to deliver a better employee experience. Employees expect employers to step up and meet their current needs for personal safety, financial security, and remote work culture amid the pandemic. But they were already pushing for an improved workplace experience before COVID-19 — and those demands haven’t gone away.

While it might feel prudent to put employee experience on the back burner while your organization copes with the pandemic, now’s actually a great opportunity to test how your culture holds up remotely. Because, as you’ll learn in the next point, remote work often goes hand-in-hand with building a better employee experience.

To prevent incurring such high costs and turnover, small businesses can offer their employees financial benefits that are mutually beneficial to the employer and employee. That is why an on-demand pay benefit is gaining so much traction. According to a DailyPay survey, our partners saw a 45% decrease on average in turnover since implementing the solution. In addition to soaring retention rates, employees find their productivity and happiness increase just knowing that they have the option to get their money when they want.

Going Live: How Some Banks are Dealing with Remote Implementation

Photo by engin akyurt on Unsplash

What is the safest way for banks to go live with new tools in the height of a global pandemic? Remotely, of course!

This is the reality that many bank and third party providers have faced over the past few months. Despite the complications that COVID-19 has brought to banks’ operations, many are still moving full speed ahead on projects with third party providers.

Naresh Kurup

Naresh Kurup, Marketing Director at banking financial crime risk management firm Clari5 has experienced this first-hand. After the pandemic hit, Clari5 was forced to quickly move to a work-from-home setting while onboarding two new clients completely remotely, something the team had never done before. We caught up with Kurup to get the details.

In the height of the coronavirus lockdown, you were able to help two new bank clients start projects. Tell us more about this.

We leveraged the coronavirus lockdown situation as an opportunity to excel, for our customers and for us. Amidst the din all around about how the pandemic has been negatively impacting firms and systems worldwide, we had some noteworthy achievements during the lockdown, including three new client wins.

The two projects that we started were both large enterprise fraud management projects for banks (one of them is the Philippines’ second largest bank). Both banks were agreeable to starting their projects during the lockdown – a testimony to the faith in our capability.

We also had another prominent new bank go live with our enterprise fraud management solution, despite the nation-wide lockdown, via a 100% remote implementation.

Our cloud-based project management framework – called Clari5One, has been helping us work seamlessly and virtually. In fact, we have been working at 150% productivity.

So, we actually have been having a silver lining in the Covid cloud.

Were there any hesitations from the banks’ perspectives? If so, how did you deal with their concerns?

There were a few initial apprehensions around remote project initiation and implementation as this is not the standard practice for large enterprise implementation projects.

We modified and extended our project management framework to the banks for higher real-time synchronicity and shared visibility of the delivery management plan.

In the case of the bank client going live during the lockdown, it was mutually agreed that the entire implementation would be performed remotely. Everything from requirement discussions, to integration strategy and configuration, to implementation rollout for the go-live would be conducted fully remotely.

Also, high operational rigor, advanced tele/videoconferencing tools, real-time communication, and continuous updates assured the banks that our project team were completely in-sync throughout the project journey.

These factors were instrumental in the banks gaining confidence that the projects would proceed exactly as per plan, despite the situation.

What was the biggest challenge of remote implementation?

Given the nature, scope, and scale of these projects, typically large enterprise fraud management solution implementation projects demand large teams from either side working together physically closely.

But, given our project management platform, advanced communication tools, and the heightened diligence because of the situation, instead of working alongside the banks’ fraud risk management department officials, our remote project team dovetailed seamlessly with them. So, we were very much present, but virtually.

In fact, the CIO of the bank that went live on Clari5 EFM said, “We are an execution-oriented organization that sets sight on a goal and achieves it, despite roadblocks. We are pleased that Clari5 imbibed our vision, and went live with the mission-critical, enterprise-level fraud risk management solution, despite COVID-19. We appreciate team Clari5’s efforts to keep our operations running and being supportive at every step. Happy to have Clari5 as our valued partner.”

Also, as with any conventional project management, we had no margin for error and were all set to achieve the targets on time, despite managing the projects remotely.

Lessons learnt include project management hyper-optimization, integration approach, methodology finalization, remote infrastructure setup, SIT/UAT support, and final thrust for go-live.

In fact, if it weren’t for the virus, we wouldn’t have had an opportunity to demonstrate that yes, we indeed can remotely activate and implement.

What technology/ tools have you found useful in implementing projects with clients remotely?

As a young fintech company we are equipped and enabled in processes and technology that support ‘work from anywhere’ for most of our staff. So, transitioning to a ‘complete’ remote working situation for project implementations in the wake of the coronavirus lockdown wasn’t exactly a big leap for us.

Since implementation of the Clari5 suite requires close interactions with client teams as well as tasks and activities that are required to be done on premise, we transitioned them to Clari5One – our cloud-based project management framework that has multiple technologies as components.

Clari5One helped us with –

  • Detailed requirements gathering, demo of use cases, technical specifications interactions
  • Installation / configuration of Clari5 application components
  • System integration tests and support for use acceptance tests
  • Production deployment, go-live, and post go-live support
  • Project governance (reviews, interventions, and decisions)
  • Issue tracking, work allocation, and status tracking

If given the choice between an in-person implementation and a remote one, which would you choose?

Undoubtedly, remote.

Being an enterprise product company, we work very closely with client banks to help them achieve their risk and compliance requirements completely and consistently. Project implementation proficiency and on-time delivery have been the hallmarks of our success, which we have achieved consistently in implementations across geographies. But COVID-19 tested our hypothesis.

The outcome has been a mindset shift in our project implementation approach. We had experimented with remote implementations in the past, but the COVID-19 lockdown provided a live environment to validate our remote implementation hypothesis. The leading bank going live boosted our confidence to manage an entire project remotely.  

We are now honing our remote implementation expertise for other projects on the anvil. We are currently implementing an EFM project for Philippines’ second largest bank using our remote implementation methodology.

Given the clear advantages of people deployment efficiency, cost economies, and much shorter go-live timeframes, we expect a substantial number of future implementations to be managed remotely.

Suffice to say, remote implementation of large banking enterprise solution projects will become the new normal.

The Not-So-Secret Secret to Getting Innovation Right

In the midst of the myriad challenges COVID-19 has thrown up for financial institutions and the people and businesses they serve, the crisis is also propeling innovation forward, proving the worth of past technological investments, and shifting the view of digital initiatives from a ‘nice-to-have’ to a ‘need-to-have’, particularly in a time of social distancing.

Against this backdrop of crisis-galvanized change, senior content producer Laura Maxwell-Bernier caught up with Sunayna Tuteja, Head of Digital Assets and Blockchain at TD Ameritrade, to talk about how she is seeing this play out, and how financial institutions should approach digital transformation to ensure relevance in the ‘new normal’.

We are also delighted to announce that Sunayna will be expanding on the themes covered in our conversation at FinovateFall in September, where she will look at the next phase of this trajectory, how changed consumer behaviors will drive further change, and what role technology will have as the dust settles.

Laura Maxwell-Bernier: Crises like COVID-19 have historically shown us how quickly technology can go from a nice-to-have to a real necessity for consumers. How are you seeing this play out in the context of COVID-19?

Sunayna Tuteja: Innovation often gains traction in times of turbulence. We are certainly witnessing that play out at massive and magnified levels in the context of COVID-19. Technologies and trends that were already in motion reached escape velocity – in scale and speed of both investment and adoption accelerating in the span of weeks vs. years. Examples include tele-medicine, online learning, and omni-channel commerce. The necessity of solving a pain point combined with a sense of urgency is activating laser-focused action that otherwise might be slowed down by inertia. In short, digital transformation is now a matter of business resiliency, representing an ultimate shift from “nice-to-have” to “need-to-have”. 

Perhaps my favorite example is the Supreme Court of the United Sates (SCOTUS), an institution steeped in tradition which until recently conducted all oral arguments in person, behind closed doors and without cameras present. They too have had to adapt and transform. Last week the SCOTUS moved to hearing arguments via tele-conference, and also opened it to the public to listen in real time. While the new format may lack the usual pomp & circumstance, it ushers in an era of transparency & inclusivity. It’s a joy to witness this epic transition. Necessity is the mother of invention, or in this case adoption!  

LMB: What similarities are you seeing in the way financial services organizations are responding to COVID to how they responded after the 2008 financial crisis? What lessons should we be drawing from this in our planning for the longer-term repercussions of COVID?

Tuteja: An imperative for institutions (private and public) to innovate is the rapidly closing delta between novelty and necessity. It wasn’t that long ago that the notion of banking and trading on your mobile device was unfathomable – mobile phones were for playing Candy Crush and Angry Birds!  But within a matter of years, driven by a shift in consumer behaviors and expectations plus the rise of Fintech, incumbents have had to evolve and for many, the nice-to-have digital venues are now need-to-have primary on-ramps to attract, engage and retain consumers. Ergo, shocks like the global financial crisis and COVID-19 further reinforce and validate that tapping into the power of nascent yet powerful technologies to break down barriers and create next generation products/client experiences must be an evergreen endeavor. You need to maintain a persistent and pervasive focus on client-centric innovation to keep up with and surpass the evolving expectations and norms. 

At TD Ameritrade, we saw this thesis come to fruition as we embarked on transitioning our employees to work from home in a matter of 10 days whilst serving millions of clients during tumultuous market conditions. The firm’s steady investments over the years in capabilities like cloud, Artificial Intelligence, messaging, mobile etc. enabled a speedy and smart transition.

LMB: What implications do you see this crisis having for the rate of adoption of digital assets – stablecoins, CBDCs and the like?

Tuteja: Digital assets are uniquely qualified for these present times. Be it as an investment vehicle akin to bitcoin’s value proposition of ‘digital gold’ or the prospect of modernizing payments, remittances, money movement or banking the unbanked/underbanked driven via stablecoins, digital wallets and CBDCs, the opportunities abound. It’s fertile ground for projects in the digital assets space, including DeFi efforts currently focused on solving these important problems. Again, this momentum is driven by heightened need as we reimagine and reconfigure our day-to-day norms in the time of/after COVID. For example: In my role leading emerging tech and partnerships, I had the opportunity to work with several Asia Tech firms in China. As someone who needs her daily dose of Starbucks, it was always amusing when I tried to pay for my drink with cash or credit card. In a society that has adopted end-to-end digital payments driven by digital wallets embedded within messaging apps like WeChat, the notion of a cash or physical credit card interaction could not be more antiquated. While the proliferation of digital wallets and QR codes have been slow to gain momentum in the U.S., current circumstances may mark a significant shift as consumers are more conscious and concerned about what they touch and who touches their card.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, and as business leaders we must deliver a compounding and comparative advantage to our constituents – customers, employees, and the communities we serve. All of which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.

The confluence of these developments combined with the current macro environment garner an important inflection point in the proliferation of this nascent technology & asset class. It is therefore incumbent on the institutions that consumers know and trust, to lead with prudence and pragmatism in addressing this growing demand from consumers for education and access to digital assets, and continue the journey of bringing Wall Street to Main Street.

LMB: What does the path forward for digital transformation look like as a whole, and what do you anticipate the long-term effects on technology adoption being?

Tuteja: I’ve long maintained that anything that can be digitized will be digitized, it’s a matter of timing and led by the consumer, with technology as the enabler vs. the driver of change. An evergreen approach is key because the timing and pace of adoption is often influenced by external factors as we are witnessing at the moment. I’m reminded of examples like Webvan and Pets.com, which are often cited as failures of the dot.com bubble. Yet their contemporaries, Instacart and Chewy.com, are gaining tremendous adoption today. As an organization, you don’t want be caught off guard and unprepared, hence a persistent evaluation of the evolving consumer needs combined with a “perpetual beta” mindset in deploying new technologies is critical.

While starting with the technology can be alluring, it can lead to “shiny object syndrome” and innovation theater without much value for the end constituents. The not-so-secret secret sauce is an obsession with customer-focused innovation. A myopic focus on solving gnarly problems to deliver meaningful value by breaking down barriers that enable consumers to take charge of their financial future with confidence. If that’s powered by blockchain and AI, great, but the tech ought be secondary to the problem statement. The litmus test we apply is: What is the problem we are solving? Why is this problem worth solving? And why are we or is this tech uniquely qualified to solve this problem? It’s always better to be solving the hard problems and shipping pain-killers vs. vitamins. A strong anchor to the problem statement is also useful in maintaining focus on investing in, experimenting with and operationalizing new capabilities while averting the trappings of fads or fear of missing out.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.

How the Coronavirus Impacts the Appetite for Cryptocurrency

Photo by Sander Dalhuisen on Unsplash

We’ve heard a lot about how the coronavirus has made an impact across the fintech realm, but what about in the crypto space? With an unstable stock market, why weren’t investors fleeing to alternative, blockchain-based assets?

To get an inside view on these questions and more, Finovate’s Adela Knox spoke with Max Lautenschläger, managing partner and co-founder of Iconic Holding, a Germany-based company that manages and sells crypto asset investment vehicles and invests in blockchain and crypto-focused companies via its in-house accelerator.

How has the coronavirus pandemic disrupted traditional investments?

Max Lautenschläger: Personally, as a supervisory member of the biggest independent financial advisory company in Germany, I am monitoring the German financial market closely. I was surprised how good the day-to-day business is going in this very special time, which is forecasted to be one of the biggest economical depressions in modern history. Moreover, it’s positively surprising how much this pandemic is pushing us towards a more digital financial ecosystem. Consumers are adapting to the “new normal” and are suddenly forced, but also willing to make decisions online. Investment advisors and financial consultants on the other hand are realizing the potential of using online tools for signing documents, online identifications or video calls for customer acquisition and retention. Financial institutions seem to finally understand how important digitization is for the daily operations with millennials, which have a very different expectation of financial services. Even though the whole financial industry is suffering, it will also have a positive impact long-term.

By looking at the best performing stocks since corona started, you can also see that more and more money is getting invested into themes like data, remote working, online education, and sustainability. In this pandemic people are realizing the shift the world has already made and want to be exposed to the increasingly important topics.

How has this impacted the appetite for digital currency?

Lautenschläger: It’s very important to understand what was going on when corona hit us out of the sudden. We’re not in an economic crisis yet, but the initial shock led to a so-called liquidity crisis, which makes investors liquidate their holdings -if possible- to cash. All asset classes suffered severely, even “safe havens” like gold decreased by more than 10 percent. Cryptoassets crashed in those extraordinary times, as well, even though they’re said to be non-correlating to other asset classes. Nonetheless, this crisis just confirms what we already know: central banks can print money and are increasing the circulating supply constantly. The beauty about crypto is that code is law, which means that the supply-demand-relationship is predefined. Over the last couple of weeks more and more institutional money has been invested into crypto assets which also led to a new peak in commitments to traditional financial vehicles like the Grayscale Bitcoin Trust.

Secondly, the discussion of introducing a blockchain-based Euro or US Dollar is again one of the top priorities for central banks all over the globe.Libra, despite its weaknesses, seems to be a solid backbone infrastructure for those digitized currencies and could help to accelerate this development.

What is the biggest myth about cryptocurrency?

Lautenschläger: Most people I talk to think that crypto assets don’t have any intrinsic value and research from big financial institutions are trying to support this hypothesis. But this is entirely wrong! Let’s take Bitcoin as an example. Digital gold, safe haven, store of value — a lot of phrases have been used to describe Bitcoin, and to a certain extent, I agree with all of them. For me, Bitcoin is a commodity like gold, other rare metals or rare earth, which can be modeled by the stock-to-flow ratio. On the other hand, there are blockchain protocols which are the infrastructure for decentralized applications. The value of those protocols and their native tokens is derived from the number of deployed applications and the level of engagement. Users will use the infrastructure that offers them the applications they need and developers will go where the users are.

How is cryptocurrency performing in the current pandemic climate?

Lautenschläger: First it crashed like all the other asset classes. The reason for this is that corona -at first- didn’t cause an economic crisis, but primarily a liquidity crisis. Studies in behavioral finance suggest that people tend to convert all liquid assets to cash to be prepared for an upcoming crisis. But even though crypto

tanked even more than the stock and commodity markets it is still the best-performing asset class of 2020. With the monetary policy of the ECB, FED, and BoJ you can clearly see the vulnerability of our system, which makes more and more people lose trust in central bank policies and money in its current design. This is why crypto was born in 2009 as a reaction to the financial crisis.

What are the biggest benefits and reward of investing in digital cryptocurrency?

Lautenschläger: First of all, crypto has a low correlation to traditional and alternative asset classes, which makes it a perfect portfolio diversifier. Recently, we conducted a study in collaboration with the Frankfurt School of Finance and Management, which clearly shows that an allocation of 1% to 5% of crypto to a traditional portfolio not only generated additional returns, but also increased the sharpe-ratio severely, which is the most well-known risk-to-return measure.

Is the demand for crypto assets limited to professional investors or is it something that everyday investors are looking into as well?

Lautenschläger: Crypto assets were originally completely retail driven by individuals who believed in the potential and the idea of an intermediary-free world, in which everyone is financially included. Nowadays, we see more and more high net worth individuals and family offices investing into the space. The lack of professional, enterprise-grade financial vehicles is still an issue and makes it hard for institutions to enter the space. But recent developments like the European AML directive and the German crypto custody license are first indicators that crypto assets are becoming “bankable.” This is also what we have been working on for years at Iconic Funds: make crypto accessible through traditional, regulated vehicles.

Customer Experience and Member Engagement in the New Era

Financial services organizations have significant and unique roles to play in the societal responding to COVID-19 – both as we are in the midst of the global pandemic and as we emerge and eventually start to rebuild and recover. In light of this unprecedented challenge, Senior Content Producer at Finovate, Laura Maxwell-Bernier, spoke with Norman Buchanan, First Vice President of Design & Transformation at Alliant Credit Union, to discuss the implications of these unprecedented times for the customer experience and member engagement.

LMB: Thanks for taking the time to join me today. Let’s start with how customer experiences are changing… what does a good customer experience look like in these unprecedented times?

Norman Buchanan: The definitions and fundamentals of member experience stay the same no matter what external forces are at work. Throughout our 85-year history, Alliant has been committed to serving and supporting our members in good times and in bad. 

However, times like these do reinforce the human condition and highlight the importance of a human-centered member experience.  Establishing authentic, empathetic connections in these times is even more appreciated and critical during the crisis.

LMB: So, how can financial services institutions offer support and reliability to customers when they need it most?

Buchanan: It is critical for financial institutions to show support to our members and customers in this crisis. At Alliant Credit Union, our lending, product management and marketing team quickly developed a new unsecured loan product offering for our existing members within the first week of the crisis. In addition to our unsecured loan product, we have also made our Payment Deferral, Modification and Payment Reduction programs more readily available and easily accessible. These offerings are critical to providing a small amount of relief and peace of mind to members who are experiencing a sudden and dramatic change to their financial condition. 

We have been doing scenario planning for the last 10 years and some of the scenarios track closely to what we’re seeing in the market now.  We’ve prepared for times like these and will continue to monitor the situation every day so we can make rate change decisions that are in the best collective interests of our more than 500,000 member-owners nationwide.

LMB: How is Alliant Credit Union responding from the customer and member perspective?

Buchanan: During this uncertain time, we are focused on four priorities: continuing strong service to our members, employee and member safety, helping members impacted by COVID-19 and keeping members and employees informed.

Alliant instituted an initial work from home policy on March 13 and implemented a 100 percent virtual work from home call center within 3 business days to help support our members.  We had never implemented this type of a call center before in Alliant’s history, (and honestly something I never thought we would ever see) but we were able to accomplish it in rapid time thanks to our resilience as an organization.

Our contact center NPS Scores for the first month of being 100 percent remote are 2 points higher than the same period last year.  We mobilized a 100 percent work from home call center and have had slightly improved YOY satisfaction response from our members.  This is something our credit union takes a great deal of pride in having accomplished.

LMB: With social distancing now the norm, how can we harness digital services to best serve customers and engage members?

Buchanan: Digital Transformation has been the lynchpin of Alliant’s strategy over the last five years.  As our CEO, Dave Mooney puts it, “Banking is something you do, not a place you go.”  This strategy has driven the transformation of our Mobile and Online Banking offerings based in research and continual feedback from our members as well as investment in our call center infrastructure and analytics.  This strategy enabled Alliant to be in a position to close the majority of our branch network in 2018 so that we could focus on serving our members needs exclusively through our digital and phone channels. 

LMB: In your opinion, what is the biggest challenge COVID-19 presents us in terms of delivering best-in-class customer and member experience?

Buchanan: The COVID-19 situation highlighted that a frictionless member experience needs to be supported by a frictionless employee experience, especially when that employee experience is 100 percent remote! 

Areas of the operation that historically have been underinvested in automation have been highlighted by this historic experience.  Operations like loan deferrals and modifications, which typically handle transaction volumes in the teens per week for us, have been overwhelmed by the current environment.  This allows us the opportunity to re-prioritize our focus to ensure that we can support our members with optimized and automated back office processes.  That will be an immediate legacy of the COVID Member experience challenge. 

Fintech Analysts Speak Out About COVID-19

We’re used to things changing fast in the fintech industry, but in the past few months, we’ve seen even more rapid change. That’s the reason behind the latest series on the Finovate podcast: Fintech in Extraordinary Times.

In this series, host Greg Palmer caught up with nine fintech analysts to get their thoughts on what we can expect to happen in fintech now that the economy and our way of life is turned upside down. Check out the series to get a glimpse of who will be the winners and losers, what strategies will prove beneficial, and what the future of customer service will look like.

Ron Shevlin

Shevlin summed up his projection in three words: “I don’t know.” To be fair, he was the first guest in the series and didn’t have the benefit of seeing government stimulus packages, consumer purchasing changes, and infection curve adjustments. Shevlin explained that making guesses about the economy is the wrong move at the moment, and guided firms to instead focus their attention on strategic planning and helping to stabilize customers’ and employees’ lives.

“None of this advice matters,” he emphasized, “if the bank doesn’t first take a customer-centric approach.” Shevlin concluded that when we emerge from the other side of this crisis, banks will better understand the connection between financial health and physical health and will be better poised to deliver digital services.

Alyson Clarke

During her discussion, Clarke focused on the positive. She made the point that the key to surviving recessions is preparing for the upturn. Banks need to balance cost-cutting efforts with productivity and should reengineer their processes around the customer and not the product. Instead of simply cutting costs by laying off employees, Clarke noted, banks need to consider how they can improve their productivity and focus on higher value tasks.

As for what’s next, Clarke believes that the next wave of innovation will center around risk and back office solutions that drive efficiencies. “We’ve already seen sexy front-end innovation and now there is a demand for efficient solutions to drive more scale,” said Clarke. In addition to back office solutions, she noted that the low-touch commerce movement will spur innovation in digital payments. And, she opined, we may even end up with a mobile payments solution that sticks.

Jacob Jegher

Jegher stated that the crisis will prompt fintechs to be more creative, especially since consumer behavioral change has prompted a move into digital opportunities. The new era of the digital economy will ultimately be a test of a bank’s user experience. He explained that if consumers come running back to the bank branch when this is all over instead of learning to embrace mobile, perhaps there is room for improvement in the mobile experience.

In the future, Jegher predicts that changes to the economic environment and lower unemployment numbers will inspire banks to offer solutions that cater to the gig economy. Up to this point, traditional banks have failed to serve this customer segment.

Dan Latimore

Latimore kicked things off with a disclaimer that in the next few weeks as things progress and as new information comes in each day, his views may change radically. Overall, however, he predicts that COVID-19 will accelerate a lot of existing initiatives and consumer behavior patterns. For example, Latimore noted that we can expect to see hockey stick growth in consumers’ digital adoption and in their move away from cash usage.

On the other (perhaps more negative) side of the spectrum, Latimore said that we will likely see an acceleration of the “thinning of the fintech herd.” In other words, many fintechs will close their doors or become acquired by larger players.

Brett King

In his segment, King opened by saying, “This isn’t a fintech bubble that has collapsed, this is the entire world economy that has collapsed.”

In predicting winners and losers, King anticipates that challenger banks will do well. And though a lack of future funding rounds may slow their growth, these non-traditional banks will be able to acquire new customers organically at a faster pace. He added that, conversely, fintechs working in the credit space may not fare as well. “If you’re in the credit business in fintech right now, that’s going to be tough– you’ve got to de-risk,” King said.

As for change that has already occurred in the industry as a result of the coronavirus, King looked to his own company, Moven, as an example. He explained that because the direct-to-consumer version of Moven lost a major round of funding due to concerns around the economic effects of COVID-19, the company had to make some major decisions. Ultimately, Moven closed its direct-to-consumer offering and pivoted to focus all of its efforts on Moven’s enterprise product, which is currently experiencing increased demand because of new digitization requirements.

Adrienne Harris

Harris made that point the fintech has yet to experience a downturn, since much of it was born out of the last financial crisis. That said, many are watching the industry closely to see how it will weather the storm.

She highlighted the hope that fintech tools will help repress some of the negative effects of the economic downturn. Since we have a lot more tools and more data going into the current crisis than we had going into the 2008 financial crisis, perhaps the economic situation won’t be as bad as it would have been in the absence of fintech tools.

Harris predicts that as fintechs are impacted by the economic effects of the crisis, some will fold and others will fall short of meeting customer expectations. Because of this, she noted, we can expect to see more scrutiny from policymakers and regulators.

Louise Beaumont

In her interview, Beaumont made the point that this is a time of forced change, and it’s causing innovators to step up to new challenges. Experian, for example, is offering its Affordability Passport to its customers for free.

As a champion of open banking, Beaumont highlighted that the need for open banking is even greater during this time of crisis. When it comes to lending, she said that leveraging business data using open banking is one of the keys to ensure that the right funding hits the right company at the right time. This will allow all banks to see a business’ entire financial history– even if that company does not do business with the bank that is extending the funding.

Chris Skinner

Skinner explained that large banks are having difficulty with the shifting demands of consumers. He noted that not only have they increased their digital demands, they are also requiring more one-on-one attention in areas such as mortgages. Because of these changes, many banks are receiving 10x their usual call volume but have 10x fewer employees to service the calls. After the pandemic, he concluded, many banks will rush to become purely digital.

Skinner predicts that the fintech industry has another decade until it will fully mature. He explained that once fintech reaches true maturity, it will be built on open banking. Even before this time, however, he anticipates we’ll see banks flock to the open banking model because after the pandemic, banks will be seeking agility. “The ones that are just sitting there like rabbits in the headlights are really going to struggle,” he said.

What Leading Challenger Banks Have Learned on Their Journey to Build a Digital-Only Bank

What Leading Challenger Banks Have Learned on Their Journey to Build a Digital-Only Bank

Finovate’s Charlotte Burgess spoke to Michal Kissos Hertzog, CEO, digital bank Pepper and insha’s Founder and Managing Director, Yakup Sezer, about the challenges of setting up a digital-only bank, and how to get the customer experience right with zero face-to-face interaction.

What key lessons have your challenger banks learnt as you looked to be digital only?

Michal Kissos Hertzog: One key lesson businesses have learned is that you can’t just paste a “digital core” over an incumbent bank. They have to be truly digital or there will be limitations and barriers.

The benefits of having a business model that is digital to its core is that banks can adapt quickly to constantly evolving customer demand, technology and innovation. Incumbents with legacy systems need to adjust quickly or partner with tech and fintech companies, or innovation will always be slower.

Yakub Sezer: The learning curve is very steep. When building a bank from scratch, especially in countries with strong regulatory bodies such as Germany, there’s a myriad of things to consider on the way, and many hurdles to overcome.

Courage is a necessity: If you have too many reservations about what you do as an entrepreneur, you’re inclined to fail. Learning to fail fast and get back on track even faster is crucial, and so is a strong partnership network. With Albaraka Türk, we’re lucky to have a strong investor with roots in our market segment behind us, but building a fintech-spirited bank out of a corporate culture is a completely different challenge.

Why do you think we have seen such a boom of “digital-only banks,” and do you think these challengers have the ability to take on those more entrenched players?

Sezer: Consumers are used to a level of convenience from their personal lives that it’s only natural they want to handle their finances in an equally convenient way.

Challenger banks have much faster innovation cycles and often enable a company culture that encourages a team to try out things, and fail where necessary, and learn from that, and then go on and improve, facilitated through digital organizational patterns, something legacy banks have been lacking for the longest time . However, I don’t necessarily see challenger banks and legacy banks as mutually exclusive. We’ve seen many great partnerships developing over the last years and both sides can benefit from each other in various areas.

Hertzog: The profit and loss model no longer works. Unlike the incumbents, digital-only banks have the advantage of being able to utilize data to operate on customers first, profit second basis. Customer needs and demands are changing and they expect so much more from the companies they engage with on a daily basis.

For example, Pepper’s research found that two thirds (67%) of Brits don’t feel well-equipped to make the best financial decisions for themselves, yet nearly half (47%) believe it’s a bank’s duty to help them make better financial decisions. This shows that banks need to do more in providing the necessary tools to help consumers make the best financial decisions.

This is something that many challengers have already achieved and are excelling at, so for the incumbents, it really is a question of adapt or die.

How do you ensure a great customer experience when you are a digital bank?

Hertzog: Unlike traditional banks who have implemented technology solutions to improve how they currently work, digital banks tend to do things differently. They work hard to identify customer pain points and then implement tech solutions to solve them.

Another way is by leveraging data. Digital banks might not have the long history of data that the incumbents do, but they are far better at utilizing it to adapt to consumer demand and offer personalized services. This typically creates a much better experience for the customer. For example, we know that debt is a huge problem for many people, so at Pepper, we use data to provide our customers with the necessary guidance before this happens; such as suggesting cheaper loan alternatives to an overdraft.

Sezer: For us, it’s been very important to find a strong niche. As a digital bank, we’re obviously attracting people that are looking for a very high level of convenience in banking; but we also have strong moral principles when it comes to what we do with our customers’ money. We’re also convinced that legacy banks have been doing certain things right: personal customer service is definitely a plus.

We’re combining the best of both worlds: a mobile-first banking experience, that offers consumers the possibility to get in touch with their beliefs and moral convictions through a personal banking partner.

Finally then, how do you see fintech as a whole evolving over the next decade?

Sezer: B2B solutions, especially will continue to gain traction across the board, and co-operation between digital and legacy banks will play an increasingly important role throughout Europe. But B2C is going to evolve as well; handling your financial situation will not be only banking anymore. With the ability to monitor personal spending habits and saving goals on your phone, customers will always be aware of their financial situation.

Hertzog: In the next decade, we can expect to see a lot more partnerships and collaborations – not just between banks and fintechs, but also fintech to fintech partnerships. Many successful businesses realize the importance of collaboration, so they can focus on what they do best and use other companies for the rest.

The other trend we can expect from fintech is increased personalization through the use of AI. At Pepper, we envisage a world where a consumer enters their favorite coffee shop, and we drop money into their account to pay for their coffee as a reward. This level of personalization and customer obsession will dramatically reform the banking industry in particular, as consumers opt for products that truly understand them and their needs.

Personalization and One-to-One Communication

Gregg Hammerman has seen first hand what works when it comes to personalization. In fact, in 2012, he launched a company built around the entire premise of personalization.

Hammerman is now CEO of Larky, a mobile engagement platform that enables financial institutions to put the right message on an account holders’ lock screen at the right place and time. However, personalization and push notifications– while effective– can be difficult to implement. Not only do the timing and location have to be perfect, there is a careful balance between messaging and spam. On top of that, privacy is often a top concern for both financial institutions and their end users.

We caught up with Hammerman to tap his expertise on implementing a personalized user experience.

When it comes to personalization in fintech we often hear of sending offers to the right consumer at the right time in the right place. What is the most challenging aspect of this?

Hammerman: It’s critical to make sure that these communications are relevant, meaningful, and helpful to the consumer. We work closely with financial institutions to create experiences that use these communications to make people feel like they are part of a special club.

Three key things make our programs a success. First, we recommend segmenting an audience so you can tailor messaging for a person who has a mortgage, someone who recently purchased a car, a student with a new checking account, and other unique parameters that shape consumer habits. Second, scarcity is a powerful component. Consumers want to know that they have access to something special that isn’t available to everyone. Third, communications need to be fresh. Consumers want to see new messages and new experience opportunities on a regular basis.

What measures does Larky have in place to keep banks from fatiguing their customers with too many alerts and messages?

Hammerman: We work closely with our financial institution clients to give them complete control over how they communicate with their customers. The financial institution is always able to increase or decrease messaging frequency based on what is the best fit for their audience.

From an end-user perspective, account holders can snooze messages, turn off some types of notifications, and more. A lot of this discussion returns to making sure that these communications have high value. If every time I go for an auto repair, my financial institution tells me that I can save $100 because I’m a valued account holder, I’ll never fatigue from that message.

Thinking about geo-targeting, how does Larky balance a user’s privacy with the need to know their physical location?

Hammerman: Larky has been on the forefront of user privacy since our initial solution launched in 2013. We believe that users have the right to access any information that is collected or stored about them, and the right to obtain that information and have it destroyed if desired.

We are in compliance with all regulations from Europe and California. We plan to continue to lead and innovate on privacy. We don’t sell the data that passes through our servers. It’s not part of our business model. We have never and will never share any user information with any third parties.

Aside from knowing a consumer’s location and the best time to send a relevant offer, how else does Larky help banks with personalization?

Hammerman: We’re now working with financial institutions to leverage data from their other systems to help personalize communications. For example, we help improve new account holder onboarding with touchpoints that welcome and educate new clients and help them become more engaged with the financial institution.

We’re able to help financial institutions create campaigns that reach out to only their account holders who have an auto loan, just one account with the financial institution, recently started direct deposit of their paycheck, and much more. We’re finding that partnering with financial institutions to personalize the right message to the right consumer increases the impact of the campaign and includes account holder engagement.

Future Banking: Creating an ‘Incumbent Challenger’

Finovate talks with Ronit Ghose, global head of banks research and co-head of the fintech theme group at Citi about the future of challenger banks and why some shouldn’t be calling themselves a “fintech” at all.

Finovate: How would you define the different types of challenger bank that exist today, and what are the key differentiating factors between them?

Ronit Ghose: Challenger banks are designed around the digital revolution and are able to leverage data insights via advanced technology stacks. I’d say there are three types of challenger banks that have emerged:

  • The first are standalone challenger banks, which are primarily Fintech companies leveraging technology and data to streamline retail banking by offering better convenience and pricing.
  • The second are incumbent-led challenger banks, started within legacy banks through investment in technology and by creating new digital-only banks.
  • Finally, we’re seeing BigTech-led challenger banks who can use their vast networks to acquire customers quickly as they branch out into financial services.

Finovate: Interesting! So, we’ve seen many incumbent banks attempt to set up their own challenger banks – how successful has this been, what lessons should others learn, and how can banks make their back end look more like a digitally-native company’s?

Ghose: Over the past five years or so, especially since 2016 through 2017, incumbent banks have moved from ignoring or mocking the new entrants to engaging with them and giving them the best testimonial possible: They have begun copying them by setting up their own new businesses. While the results have been mixed, the success or failure of incumbents in this field could be characterized using three factors: markets, technology and operating model or culture.

So in most cases, incumbent banks launch a challenger bank in a market where they are already active; albeit they use their new proposition to better target a specific segment, such as millennials or digitally-savvy customers. With regards to technology, in the past 12 to 18 months incumbent banks appear to be moving to consider more disruptive technology and business model approaches, and to attempt to actually build new brands or businesses “like a startup”. If you aren’t doing new tech, then stop calling yourself challenger or fintech. ‎

Finally, we have to consider bank employee incentives, training, and formation are the human capital equivalent of a fixed income instrument. By contrast, fintech founders work and their employees are growth equity to the bank employees’ fixed coupon bond. In the language of financial instruments, can banks become convertibles not just bonds? ‎

Finovate: Moving away from challenger banks to other new market entrants, to what extent do incumbent banks fear big technology companies over fintechs?

Ghose: The emergence of BigTech has led to heightened competition in the financial services sector. I think the challenge BigTech poses for incumbent and standalone challenger banks is daunting, given the absence of any cost drag from legacy information technology (IT) systems and underused branch networks (common problems for banks) and their natural advantage in customer acquisition owing to their high user engagement models.

One of the most prominent of these is in Korea, where popular social messaging app Kakao Talk launched a digital-only bank in 2017, acquiring two million customers in a short span of just two weeks from launch date. Similarly in China, challenger banks such as WeBank, backed by Tencent, respectively, have seen strong user growth following their launch in 2015.

The experiences of Korea and China are successful examples of internet companies venturing into banking. There are many lessons to be learned from this. Firstly, incumbent banks should not be overly complacent with their existing customer base – the speed of customer acquisition could be much faster through digital channels than the traditional distribution channels. Secondly, internet giants have a clear edge in certain areas of banking, especially around payments and mobile money. Finally, there are opportunities to cross-sell and scale to other products.

Finovate: So there’s potential for a lot of change and upheaval then. What will the bank of the future be characterized by?

Ghose: Legacy banks often have data that is stuck in multiple silos supported by core banking technology that was literally built in the era of black and white television. Manual intervention is high, which slows down operating speed, reduces flexibility, increases costs, and ultimately degrades efficiency and experience. Creating an incumbent challenger sounds like an oxymoron, but as legacy banks recognize the threat that new entrants into banking are posing to revenue and customers, they need to reinvent themselves and reimagine banking. This involves legacy banks partnering with technology companies to create effective joint ventures as well as moving into more disruptive technology and business models to transform themselves into digital competitors. By creating their own Bank X, we believe some legacy banks can transform themselves from slow moving caterpillars to agile butterflies.

banqUP, PSD2, and the Future of Open Banking in Europe

With Finovate making its debut on the European continent just over a month from now, we thought it was a good time to catch up with one of the major fintech innovators in the region, banqUP.

The company, headquartered in Belgium and “proudly developed in Poland,” demonstrated its small business banking platform at FinovateEurope 2017. We reached out to company CEO and founder Krzysztof Pulkiewicz to talk about banqUP’s latest accomplishments in open banking, as well as what the landscape for fintech innovation is like inside and outside the CEE region.

Finovate: The most recent news from banqUP is the news of your AIS license from the Polish Financial Supervision Authority. What does this license enable and how important was this development to your company?

Krzysztof Pulkiewicz: It allows us to broaden our reach and gain new clients. We have been working with a number of banks but now, with our newly gained license, we have the possibility to work both with banks and other entities that can gain access to the opportunities provided by open banking thanks to our solutions.

Finovate: You also recently announced that the company will focus fully on its B2B2C open banking platform. Can you tell us a little bit about the thinking behind this decision?

Pulkiewicz: For banqUP, the main reasons of moving from an idea of a fintech bank to a platform integrating banking APIs were challenges related to the acquisition of customers, especially on mature digital banking markets like Poland. There were also several limitations like opening accounts in polish zloty. On the other hand, we were already closely working with banks interested in our technology. We have seen that a number of our partners were interested in our open banking solutions. We have been working in a sort of a schizophrenic environment – both working with banks and building our own bank as well.

Multibanking was a core element of banqUP fintech bank from day one, and we have decided to focus on this aspect of the platform. We knew that sticking to what we are really good at – technology and data analytics – will be working for us. And it proved true.

banqUp’s platform adds new functionality such as analytics and data enrichment in addition to data aggregation.

Finovate: In line with this, the company has decided to launch a TPP-as-a-Service business line. Why do this and how large are the opportunities there?

Pulkiewicz: This is something we have been thinking about since we have started considering open banking. Multibanking solutions are the beginning of the open banking ecosystem, but we are sure that what the future brings, are the new ideas and products that will come from PSD2. There are many companies that do not consider getting their TPP licenses, as it is not a core of their business.  However, they are willing to use the information provided by the banking system, and our solution is created for such partners.

The number of inquiries we are getting from prospective partners is really astonishing – and these are both new companies and major players from different industries. 

Finovate: You mentioned in an email that you plan to open the next generation of your platform to the public early next year. Can you give us a preview of what’s new and what to expect – as well as any update on the timeline?

Pulkiewicz: Our main focus is on what we call “open banking building blocks.” We are extending our platform with best-in-class API and SDK that will offer effective integration capabilities for developers. On the functional level, we are adding new functionalities on top of data aggregation (analytics, data quality management, and data enrichment) as well as provide and expand on all the components that can support different businesses in connecting to the open-banking world (consent lifecycle management, data streaming, combining PSD2 APIs with other data sources). We know that data aggregation and payment initiation is just a starting point and we are positioning our platform as a one-stop shop for open banking.

The team from banqUP during their live demonstration at FinovateEurope 2017.

Finovate: BanqUp operates in both CEE and non-CEE Europe – Poland, Slovakia, Hungary, and Bulgaria on the one hand, Belgium and Ireland on the other. Are there categorical differences between working with financial institutions in Central Europe compared to Western Europe? Are attitudes toward open banking the same or different?

Pulkiewicz: The ecosystems differ, but the main distinction we see is not between Central and Western Europe, but between individual countries. Ireland’s ecosystem, for example, is very open. It is not only a reaction to the British banking regulations that have been the basis for PSD2 and had an effect on Ireland, but also the number of fintech companies from the U.K. and Ireland that had quickly started working with banks as they have opened. Poland’s banks have been working on many innovative banking tech projects, and banks have implemented many solutions of their own, making their ecosystems quite closed. When you look at Hungary, it was very fast with opening its own data – with eight out of 10 of the biggest banks in the country providing their API access in March of 2019, well before the final implementation of PSD2 in June. The central bank of the country has also created a fintech cooperation strategy. The differences here do not come from geographical divisions, but from the local ecosystems.

Finovate: In addition to the platform enhancements expected in 2020, are there any other announcements you can preview? New partners, new investors, new markets?

Pulkiewicz: We are definitely planning to expand to new markets – mostly focusing on the CEE region. We have a number of really promising talks with new, large partners, but we cannot really disclose any names at this moment. When it comes to investors – we have been very proud we have managed to come to this moment without any external support, but we are now also looking for strategic partnerships and alliances.

Banks Shift to Automation in 2020

The financial services industry is ripe for Robotic Process Automation (RPA) and Business Process Management (BPM) technologies. Organizations in this field have many tasks that can be– and even should be– automated.

Many banks already have successful implementations of these technologies in place. But with the dawn of a new decade, what’s next? We posed the question to AI Foundry’s Director of Product Management, Arvind Jagannath, who helped us uncover the future of RPA and BPM.

Finovate: What are some key developments in RPA and BPM we can look forward to in 2020?

Arvind Jagannath: RPA will play a key role in automating processes in legacy systems. It will have a lot of momentum in industries like retail and finance that are trying to achieve digital transformation because it can automate repetitive processes in their legacy applications.

Most companies view this kind of automation as a key to integrating new technologies and improving their business process. RPA will evolve into a gateway for adopting higher-level, modern technologies.

Finovate: Tell us about that evolution.

Jagannath: Finance, retail and online shopping all have processes that can be easily automated, such as data entry, button clicks, task routing, etc. For these processes, RPA can provide substantial savings in time and cost. Now, imagine you can amplify these gains by using cognitive technologies such as voice recognition, OCR, and AI…this can be a game-changer for many companies.

For example, voice recognition is now increasingly used to provide a more “conversational” flow for gathering initial caller information, just as a support person would do. All of this information can be used to drive the back-end processes that are automated by RPA, such as creating a support ticket and routing it to the right department.

In mortgages, document recognition technologies can quickly scan data from uploaded borrower documents and immediately provide feedback on the validity of the document or ask for additional information. This creates a powerful, real-time feedback loop that can cut days and possibly weeks out of the loan origination process.

Finovate: What does this mean for fintech’s strong partnership ecosystem?

Jagannath: Process automation tools are becoming more sophisticated, and traditional system integrators are taking notice. Large firms like IBM and SAP are realizing they need to partner with or acquire smaller, specialized RPA companies. So now there is an opportunity for collaborating and partnering to create a “smart” RPA eco-system.

A “smart” RPA eco-system combines process automation and AI to orchestrate the appropriate handoffs of tasks between humans and systems to automate processes across a value network.

For example, imagine automating the processing of a homeowner’s property insurance claim where the adjuster pulls data from many disparate systems to make a determination. In a smart RPA eco-system, robots can easily interweave with the adjuster to perform many tasks such as manual registering of the claim, scheduling the next available adjuster, tracking completion of the damage assessment, and proposing an equitable determination.

Finovate: What advice can you offer financial services companies looking to get started with RPA and BPA?

Jagannath: You first need to figure out how to automate your processes, and then start using cognitive technologies to get all the benefits out of RPA and higher-level cognitive AI. RPA becomes a gateway to adopting AI. So, RPA is helping build the ramp for AI to get adopted.

AI Foundry most recently appeared on the Finovate stage last year at FinovateFall. The company demonstrated its Agile Mortgages solution, which brings key efficiencies to the loan origination process.