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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Financial services company FISannounced this week it has partnered with The Clearing House (TCH) in an effort to bring real-time payment processing and settlement to small-to-mid-sized banks and credit unions.
FIS will help its core banking system clients quickly and cheaply connect to TCH’s RTP network, a payments infrastructure that enables instant payments settlement and immediate availability of funds for banks participating in the network.
“As a long-time partner with The Clearing House, we are excited to see the RTP network continue to grow and to be working with banks across the United States to take advantage of the speed, power and scalability of real-time payments,” said FIS EVP, Head of Financial Institutions Payment Solutions Royal Cole. “We’ve designed our new managed service to ease the process of connecting to this emerging platform for small-to-mid-sized banks and credit unions that lack the resources of their larger competitors.”
Among FIS bank clients already participating in TCH’s RTP network are St. Louis, Missouri-based First Bank; and Nano Banc, a relationship-based bank headquartered in Irvine, California.
FIS was founded in 1968 and made major news headlines last year when it acquired Worldpay for $34 billion.
The Clearing House launched its RTP scheme in 2017. Today the RTP network’s real-time payment capabilities are accessible to banks that hold 70% of U.S. demand deposit accounts (DDAs). The network currently reaches over half of all U.S. DDAs.
A new study from McKinsey & Company suggests that European fintechs are experiencing an “existential crisis” as venture capital funding plunges “from surplus to scarcity.” The report compares the 11% drop in funding for fintech worldwide in the first half of the year with Europe’s far steeper decline in fintech funding of 30% over the same time period, and puts the blame squarely on the economic and social impact of the coronavirus.
But while the report anticipates a significant contraction in European economies – 11% this year with pre-crisis levels remaining elusive until 2023 – and that fintech is “already feeling the squeeze”, the authors note that there are a variety of advantages fintech has that could enable the industry’s most innovative players to emerge successfully if not stronger on the other side of the crisis. Among the main factors are:
The fintech sector has grown over the past six years by more than 25%.
Fintechs are native to the digital realm.
Fintechs are more efficient than many other businesses: with more efficient cost structures, “organizational agility,” and significant customer loyalty.
“As more incumbents struggle to adapt, the winners will be those that quickly recognize the changed context and that are most capable of responding with clear decisions and bold actions,” the report authors note. “Many organizations, both incumbents and startups, have adapted with surprising quickness and rapid decision making through the COVID-19 crisis. This new sense of possibility and potential should inform future action.”
Speaking of Europe – and on the heels of the big news of Yandex‘s agreement to buy Russian digital bank Tinkoff for $5.5 billion earlier this week – we took a look at our favorite Russian fintechs. Check out our Baker’s Dozen of fintechs from Moscow, St. Petersburg, and more.
To learn more about fintech in Russia, here’s an overview from last December that cites an Ernst & Young study that calls the country’s fintech industry “the third most developed market in the world.” This is based on the relatively high, 80% adoption rate of fintech services in Russia, and occurs despite a relatively low participation in fintech areas like securities investment, as well as savings and financial wellness.
“Basically we went from savings books to payments over mobile phone almost overnight,” said Roman Prokhorov, the head of the association Financial Innovations, who was quoted in the study. “Therefore, our consumers are more receptive to fintech innovations, and this explains the popularity of these services.”
Here is our look at fintech around the world.
Latin America and the Caribbean
JPMorgan Chase-based Brazilian fintech FitBank Pagamentos Electronicos plans expansion to the U.S. in the first half of 2021.
TechCrunch profiles Jefa, a challenger bank that caters to women in Latin America.
IFLR looks at the role regulators in Costa Rica will play in the development of the country’s fintech industry.
Asia-Pacific
Vietnamese credit scoring technology provider for micro, small, and medium-sized businesses Kim An Group secures Series A funding.
Could Malaysia be the “world pioneer” in Islamic fintech? Malaysia Digital Economy Corporation chairman Datuk Wira Rais Hussin makes the case.
The Business Times of Singapore highlights an S&P Global Ratings report on Thai consumers pushing Thai banks to embrace fintech.
Sub-Saharan Africa
Mono, a Nigerian API fintech startup that seeks to be the “Plaid of Africa,” raises $500,000 in pre-seed funding.
Lexology reviews the current state of fintech regulation in Kenya.
Innovation consultancy Beta-I partners with Angola National Bank to build the nation’s first regulatory sandbox.
Central and Eastern Europe
German fintech Vanta teams up with Marqeta to launch its credit card for startups.
Open banking platform Raisin partners with German financial solutions broker Procheck24.
Samsung, Visa, and Solarisbank AG work together to bring Samsung Pay to Germany.
Middle East and Northern Africa
Commercial Bank of Kuwait teams up with Thales Digital Solutions to drive mobile payments.
Could Saudi Arabia top Dubai in terms of fintech funding? Arabian Business looks at the growth of fintech in the Kingdom.
PYMNTS profiles Imad Aloyoun, CEO of Jordan-based payments platform Dinarak.
Central and Southern Asia
A joint project between U.K.-based Checkout.com and Pakistan’s National Institutional Facilitation Technologies (Nift) will bring new international payment options to the Pakistan.
Pakistan’s Silk Bank announces a partnership with MasterCard to boost credit card issuance in the country.
Times of India profiles Indian fintech MoneyTap, founded by Anuj Kacker.
When it comes to leveraging technologies like machine learning and artificial intelligence to enhance processes and improve business operations, many financial services firms know what they want but, to steal a line, “just don’t know how to go about getting it.”
One of the keynote presentations at the upcoming FinovateWest Digital conference in November is designed specifically to address this problem. Jeff Fried, Director of Product Management for InterSystems, will provide a address titled The 7 Steps to Using Machine Learning to Improve Your Business that will give stakeholders key insights into the steps they can take to get their machine learning- and AI-based projects underway.
“Continued advancements in ML and AI have huge potential in many domains,” he wrote in a blog post titled Maximize Today’s Downtime to Train ML Models for Tomorrow in August. “The key is to surface low-risk, high reward business solutions to ensure your organization continues to thrive, while also weathering the effects of an economic downturn.”
Specifically, Fried is cautioning companies against treating any COVID-induced slowdown in business activity as “downtime.” Encouraging companies to not let “the crisis go to waste,” Fried sees this year as a unique opportunity for companies to hone in and test out some of their ML-oriented projects. This is because while he considers machine learning and AI to be “high promise” technologies, the time and energy required to test and implement these initiatives is often hard to find when the usual, every day business concerns are often more “urgent and immediate.”
One factor in favor of companies looking to innovate using machine learning and artificial intelligence is that while there is a high demand for talent in these areas, the actual technologies themselves require relatively modest capital investment. This, at a time of heightened financial risk aversion by most businesses and combined with new tools that are making machine learning technologies more accessible to data scientists (and even those who aren’t data scientists), further argues for companies to make the most of the current moment when it comes to pursuing their more ambitious technology projects.
A self-described “long-standing data management nerd” and a former Chief Technology Officer for BA Insight, Empirix, and Teleoquent, Fried joined InterSystems in 2018 and is passionate about helping people build powerful data-driven applications. Learn more about Fried and his upcoming presentation at FinovateWest Digital in November.
Digital lending platform Blendannounced this week it is moving beyond the realm of mortgagetech, broadening its focus to a wider array of consumer banking tools.
The San Francisco-based company now offers a new set of configuration capabilities that help banks dynamically respond to changing consumer needs by going to market faster with new products. New capabilities include out-of-the-box offerings for credit cards, personal loans, auto and specialty vehicle loans, home equity, and deposit accounts. Three of those products– personal loans, credit cards, and specialty vehicles– are new for Blend.
This news comes shortly after the company closed a $75 million round of funding, boosting its valuation to $1.7 billion.
“We want to enable banks and financial institutions to be there as trusted advisors for every financial milestone and to keep up with constantly changing consumer expectations and market dynamics. Blend will help lenders deliver the right product at the right time and with no friction,” said Nima Ghamsari, co-founder and CEO of Blend. “With our unified platform, our partners are able to accelerate digital innovation across every line of business.”
Blend’s no-code platform provides banks with a component library, product templates, no-code drag-and-drop workflows, integrated data services, and control over design elements. The added capabilities will help banks meet the needs of their consumers– from opening a new account to applying for a loan.
The out-of-the-box nature of Blend’s products was key for M&T Bank, which needed a quick-to-market solution for the SBA’s Paycheck Protection Program. “We needed to help them process more loans in a few hours… than we had done in a full year,” said Chris Kay, executive vice president of Consumer Banking, Business Banking and Marketing. “By partnering with Blend, we were able to move quickly and be there for our customers when they needed it the most — spinning up a new digital product to process these loans in just 72 hours. Thanks in large part to Blend’s platform, 100 percent of our customers were able to receive the essential funds that could help their businesses survive.”
Blend’s Digital Lending Platform is used by M&T Bank, Wells Fargo, U.S. Bank, and 250+ other financial services companies. Founded in 2012, the company helps these banks process more than $3.5 billion in mortgages and consumer loans each day.
Is this another instance of open banking, American-style?
One of the major topics of discussion at FinovateFall Digital last week was how the open banking phenomenon that is sweeping the globe will manifest itself in the U.S. The consensus was that open banking will not be driven by regulations in the U.S. as it is in many parts of the world. Instead, the ability of U.S. consumers to access third-party financial solutions via their primary banking partner more likely will be driven by consumers themselves. Another key driver will be companies looking to distinguish themselves from rivals by providing better, more diverse solutions from which to choose.
This is very much top of mind as we receive the news that Wells Fargo has entered a data exchange agreement with major financial data aggregation and analytics platform Envestnet | Yodlee. The partnership will enable the bank’s customers to seamlessly and securely share their data with the 1,400 third-party financial apps available on the Envestment | Yodlee Financial Data Aggregation Platform.
The agreement is also a large step for APIs (another major theme at FinovateFall Digital last week). Wells Fargo announced that it will also transition virtually all of its current third-party financial app screen-scraping to API-based data exchange, and added that the partnership with Envestnet | Yodlee represented the bank’s commitment to forge more API-based data exchange agreements with third-parties going forward.
“As we help customers navigate these uncertain times, we want to enable them to seamlessly connect with and use third-party apps that help them manage their finances and do so in as secure a way as possible,” Wells Fargo Strategy, Digital, and Innovation Group SVP Ben Soccorsy said. “Wells Fargo’s agreement with Envestnet | Yodlee does just that. In the future, our customers will be able to share their financial information with Envestnet | Yodlee-supported apps with enhanced ease, security, and control.”
Wells Fargo customers will be able to access third-party services via the bank’s Control Tower digital experience, which sits inside Wells Fargo’s banking app and is also available online. Control Tower enables both consumer and small business banking customers to manage their finances more efficiently, providing a single, unified view of their accounts with Wells Fargo. Importantly, customers will not only be able to turn the data sharing option on and off, they also will be able to designate the specific data they wish to share with third parties.
“API-based connectivity in the United States is leading to an increasingly connected financial ecosystem, spearheaded by the partnerships like the one we now have with Wells Fargo,” SVP of Data Access & Management at Envestnet | Yodlee Chad A. Wiechers said.
With more than 27 million users around the world, Envestnet | Yodlee demonstrated its Insight Solutions at FinovateFall Digital last week. The new offering enables financial services providers to build and scale hyper-personalized financial wellness experiences for their customers. Long-time Finovate alum Yodlee was acquired by Envestnet five years ago for $660 million. Envestnet was founded in 1999 and is headquartered in Redwood City, California.
Like most industries, fintech and banking have experienced massive disruptions in the past six months. As we’ve gone through the process of enforced change, the big question facing our industry is essentially the same as the one facing the entire world right now: what is the new “normal” going look like?
But before we get there, we’re living through a moment that people will remember. Customers will remember how they were treated by their banks, and banks will remember which tech companies helped them take care of their customers (and which didn’t). It will be important to stay focused on the big picture, and get remembered for the right reasons.
FinovateFall Digital 2020 honed in on the technologies changing the game this year, and put the thought leaders with a view for leveraging the opportunities this time offers up on the center stage. The event eMagazine was exclusively available to FinovateFall Digital attendees for the week of the event, but now we are making it available to the wider Finovate community.
Catch up on the insights from the week, including daily summaries from our Finovate’s analysts, expert insight from our Headline sponsor, Accusoft, Best of Show and Finovate Awards winner announcements, and exclusive interviews with our speakers, demoers and featured FIs from the event.
News this week that Russia’s Yandex had agreed to acquire the country’s biggest online bank Tinkoff was a reminder of how vibrant fintech is not just in Europe, or even just in Central and Eastern Europe, but in Russia, as well.
As our Senior Research Analyst Julie Muhn noted in her coverage of the news, “This is a pretty big deal, not necessarily because of the size of the transaction, but because of the players involved. Yandex is essentially the Google of Russia– it is a tech giant in the region. And Tinkoff Bank is the world’s largest digital bank in terms of customers, boasting more than 10 million clients.”
With this in mind, we want to send out a shout-out to the many fintech companies based in Russia that have demonstrated their technologies live on the Finovate stage over the years. Here’s a look at our Russia-based alums going back to our first European conference in 2012.
PayReverse – FinovateAsia 2018. Founded in 2017. Headquartered in Moscow. Offers a white label cashback service.
Ak Bars Digital Technologies – FinovateFall 2018. Founded in 2016. Headquartered in Kazan. Offers a payments via face recognition technology, Face2Pay.
Tinkoff – FinovateFall 2018. Founded in 2006. Headquartered in Moscow. Offers a digital ecosystem of financial and lifestyle products and services.
JuicyScore – FinovateMiddleEast 2018. Founded in 2016. Headquartered in Moscow. Offers a digital risk-management-as-a-service solution for the financial industry.
SMART Valley – FinovateEurope 2018. Founded in 2017. Headquartered in Moscow. Offers a distributed innovation platform that enables key players to collaborate effectively.
Speechpro – FinovateSpring 2017. Founded in 1990. Headquartered in St. Petersburg. Offers a voice biometric technology, VoiceKey.FRAUD for use in contact centers. Finovate Best of Show winner. U.S.-based subsidiary of Russia’s STC Group.
Sberbank – FinovateSpring 2016. Founded in 1841. Headquartered in Moscow. Offers banking and financial services as the core bank of an international financial group. One of the largest banks in Russia and Europe.
C24 – FinovateEurope 2015. Founded in 2013. Headquartered in Moscow. Offers a multi-channel platform that enables users to connect and aggregate their accounts with different banks. Became Paysend.
LifePay – FinovateEurope 2015. Founded in 2012. Headquartered in Moscow. Offers payment services as one of the largest mPOS EMV chip and pin companies in Russia.
My Wishboard – FinovateEurope 2014. Founded in 2013. Headquartered in Moscow. Offers a social crowdfunding platform to help users fund their goals along with the help of friends, family, and subscribers.
SoftWear Finance – FinovateEurope 2014. Founded in 2012. Headquartered in St. Petersburg. Offers a platform that enables banks to provide their customers with the best possible user experience regardless of platform or device.
Yandex.Money – FinovateSpring 2013. Founded in 2002. Headquartered in Moscow and St. Petersburg. Offers a fast, reliable way for online businesses to collect payments for Russians and customers in Russian-speaking countries. The solution, since sold to Sberbank, originally was launched by Yandex, the leading IT company and search engine in Europe.
LifePAD – FinovateAsia 2013. Founded in 2012. Headquartered in Moscow. Offers a “personal online bank manager” in a table, providing customer service 24/7.
Here’s an update to last month’s news we reported stating Yandex had agreed to buy Tinkoff Bank for $5.5 billion. The deal has fallen through today because the parties failed to agree to the terms of the takeover.
Tinkoff parent company TCS Group told Reuters it is responsible for disrupting the deal. “Today I decided to break the possible deal with Yandex,” said TCS Founder Oleg Tinkov. “Tinkoff is not for sale, neither to Yandex, nor MTS.”
Our original reporting is below.
Yandex Agrees to Buy Tinkoff Bank for $5.5 Billion
Yandex has agreed to purchase Tinkoff for $5.5 billion. This is a pretty big deal, not necessarily because of the size of the transaction, but because of the players involved.
Yandex is essentially the Google of Russia– it is a tech giant in the region. And Tinkoff Bank is the world’s largest digital bank in terms of customers, boasting more than 10 million clients.
“The parties have come to an agreement in principle on a transaction that would consist of cash and share consideration worth approximately $5.48 billion or $27.64 per Tinkoff share,” Yandex said. The purchase amount, which will be paid out in a combination of cash and Yandex shares, is an 8% premium of Tinkoff’s share price as of September 21.
Today’s deal comes shortly after Yandex announced plans to halt its partnership with Sberbank, a traditional bank with 14,000 branch locations across Russia and more than $465 billion in assets under management.
Yandex is best known as a Russia-based search engine. The company has since expanded, however, launching taxi and e-commerce subsidiaries, Yandex.Taxi and Yandex.Market, respectively.
Tinkoff is a cloud-based bank that offers a range of financial and lifestyle services, including credit products, current accounts, business services, investment and insurance products, travel tools, and loyalty programs. The bank is Russia’s second-largest credit card issuer with 13.2% market share. Tinkoff is listed on the London Stock Exchange and has a market capitalization of $5.5 billion.
The deal is expected to increase competition with state-owned Sberbank, which also operates ride-sharing and e-commerce offerings. The transaction, which has yet to be finalized, is subject to due diligence and a formal offer.
A little over a month after announcing a $200 million investment from D1 Capital Partners as part of its Series G round, the Millennially-targeted stock trading app Robinhood is back in the fintech funding headlines with another $460 million in new capital raised. The investment gives the company a valuation of $11.7 billion, and brings the Series G’s total to $660 million.
The company’s total funding stands at $2.2 billion.
The financing comes from a quintet of investors: Andreessen Horowitz, Sequoia, DST Global, Ribbit Capital and 9Yards Capital. A Robinhood spokesperson said that the funds will be used to support Robinhood’s core product as well as “new offerings like cash management and recurring investments.”
Robinhood has been on an impressive fundraising pace this year, locking in more than $1 billion in 2020 alone as a rapidly advancing stock market – and the blunting of sports gambling due to pandemic restrictions – have brought new investors and traders to the platform. Robinhood offers commission-free trading in stocks, exchange-traded funds (ETFs), and options via Robinhood Financial, as well as the ability to buy and sell cryptocurrencies with its Robinhood Crypto platform.
Founded in 2013 and headquartered in Menlo Park, California, Robinhood has more than 13 million users. Earlier this month, the company announced a set of updates on its options trading offering, giving investors and traders greater control over exercising options, and adding improvements to the early assignment process, as well as enhancing both education and eligibility criteria for options trading. In August, Robinhood introduced a pair of new Chief Compliance Officers – Norm Askhenas for Robinhood Financial and Kelly Zigaitis for Robinhood Securities – who are veterans of Fidelity and Wells Fargo Advisors, respectively.
Below is a guest post from Shubhradeep Nandi, co-founder and CEO of PiChain.
The current pandemic has brought the whole world to a standstill and created grave economic issues. The finance and banking sectors have slowly started to experience the tremors, too. With almost all sectors struggling to keep up in these economic conditions, all eyes are on financial sectors who are the drivers of the economy; it is only them who can prevent an economical holocaust. According to research from Wakefield Research and Concur, almost 84% of small businesses rely on manual processes for most of their work. Being one of the sectors that still needs a lot of manual work, the financial institutions need to bring significant changes in their operations to keep up with the new rules of social distancing.
How is COVID affecting the financial industry?
Various companies across different sectors are trying to avoid a situation of bankruptcy, there is very little that the banking and financial industry can do to help. Several companies have opted for employee layoffs and change in investment strategies with the aim to survive this crisis. In spite of all the crisis, digitization is the only way the whole of the finance industry can get back on its feet and start controlling the economy again. But the banks cannot opt for these options as they have to deal with a fall in demand, lower income, and production shutdowns.
Given the current pandemic situation, a transition to the digital world was very inevitable for the finance and banking sector. The pandemic gave a boost to digitization which led to more and more people engaging in digital and online banking. The finance industry has undergone a digital revolution. Banks and financial institutions who are head-on entering the financial market with digital platforms are experiencing an increase in profitability and market share.
Customers have already adopted digital means for performing various transactions. Fintech is becoming increasingly common as a majority of financial institutions find themselves using technology to advance their services. New technologies are extensively being implemented in the finance sector. Cloud computing, Big Data analysis, machine learning, artificial intelligence, blockchain etc., which were exposed to a fraction of players in this particular sector, are slowly starting to spread their reach bringing a large number of institutions under their umbrella. The increased security practices in the digital payment sector are also making the digital finance industry more and more appealing.
Increase in risk exposure due to the pandemic
According to FinScan’s May 2020 report, those professionals dealing with anti-financial crimes like auditors, regulators, compliance professionals etc. are finding it hard to keep the financial crimes under control. This has led to an increase in the overall risks of money laundering, compliance and other financial frauds. Among the main reasons to fuel the sudden increase in compliance risks is the “remote working” policy. This has resulted in a lack of monitoring systems and proper digital connectivity leading to minor disruptions in working schedules. Moreover, most employees have an inadequate IT structure to carry on full-fledged work. There were a lot of security risks involved as the systems were moved out from state-of-the-art firewall securities in the office to the basic securities of personal networks.
Another commonly heard reason is that, like all other industries, the financial industry was also not ready to roll out online in such short notice. In an industry where even today most work happens manually, there was a huge gap created when, all of a sudden, they were forced to get all their operations to perform digitally. This created a lot of opportunities for criminal masterminds to install backdoors and capitalize on this opportunity. Thus with an increase in cybercrimes, the risk of non-compliance increased as well. The drastic shift of a majority of the customers to digital transactions provided a safe haven for hackers to monitor transactions and perform data breaches. It has also become very difficult for the compliance and regulations department to monitor activities because of scattered data and disruptions in the overall working network of the organization.
Dealing with the growth in compliance risks
With all fields of technology advancing to help other industries, many fintech and regtech firms have come up with automated compliance and risk management solutions. Even though these solutions are state-of-the-art, tech companies mainly focus on the technical and security aspect of it. This is indeed necessary because of the ginormous amount of data on the web; most tech companies can’t deliver on the level of regulations and compliance that needs to be followed by the financial institutions. However, regulations and compliance being the two most important aspects of any financial organization, these finance companies have to look towards those handfuls of fintech companies who deliver both on the technical and finance regulations aspect. These firms leverage regulatory technology to monitor and regulate compliance laws and lead the company to a steady rise in the market.
Looking toward a post-COVID world
The world getting back to normal may be difficult and changes made during COVID-19 will slowly become the new normal. The finance industries will continue to face major challenges unless companies have deployed thought- through and well-defined resilient strategies. Regulators will need to be able to track every transaction being made. Customers will want every transaction quicker and safer. Thus, an effective sustainable digital governance, due diligence and compliance management with risk assessment strategy would be of great value to the BFSI sector.
The sector, with the help of its employees, would need to redo their relationship with customers and provide assurance in terms of service. Evolution to meet changing socio-economic conditions is the prime need of the sector which can only be bolstered with strategic digital transformation.
Shub, co-founder & CEO of PiChain, is a serial entrepreneur who is passionate about business growth. On a quest to achieve sustainable compliance for 500 Entities by 2025, he has 10+ years of experience in building and selling software for finance and regulatory compliance management. At PiChain, Shub provides organizational leadership with his unique combination of business understanding and technical acumen.
I’ve been busy catching up on all of the discussions that took place at FinovateFall last week (if you are on our attendee list, you can do the same), and a panel conversation on AI and bots stood out to me.
Leading the panel was Emmett Higdon, Director of Digital Banking at Javelin Strategy & Research, who shared the following graph:
Higdon explained that because branches were closed and call centers were overwhelmed, banks were pushing consumers to solve their issue or receive an answer to their question via digital channels. While this worked for some consumers, it frustrated others who were less digitally native or needed a more customized answer. To mitigate frustration, some banks turned to chatbots to create a hybridized approach that offered a high-tech, low-touch customer service experience.
Given the data from Higdon’s graph, it is apparent that some firms’ bots failed– they were ill equipped to handle the influx into their digital channels. Others, however, leveraged data, as well as their prior experience with their digital channels, to create a digital banking experience tailored to each customer.
Mallika Daswani VP of Digital Channels-Online and Mobile Banking at TD Bank said her firm leveraged the bank’s virtual assistant in the company’s mobile app. This tool could answer simple queries and alleviate burden from the call center, which was then able to focus on high-value activity such as conducting video calls with customers. This combination of assisted service and full service helped meet customer needs at scale.
Alexandra Mack, Solutions & Customer Marketing at Zendesk, noted that sending proactive messages to consumers can be crucial during this time. However, she noted it is important to avoid blasting a customer base with intrusive, ubiquitous messaging. Financial services companies can leverage AI to analyze customer information and direct them to self-service solutions.
The group also discussed improvements, specifically, meeting customer expectations and implementing sentiment analysis. The customer expects that the bank not only knows information about the customer, but also has details about the customer’s previous interactions, even if it occurred with a bot or in a different channel. Additionally, implementing sentiment analysis, which uses AI to sense consumer frustration and route them to the appropriate person to mitigate frustration, can vastly improve the customer experience.
When discussing customer communications and personal information, it’s impossible to leave data security out of the conversation. It can be difficult to protect consumer information (and remain compliant) when consumers switch channels or move from website-to-website. However, frustration can arise when consumers are required to authenticate multiple times. To eliminate this, banks can use voice biometrics in the background to create more efficient re-authentication and reduce wait times.
Automation can solve problems, but it takes effort to get to that point. It not requires applying new technologies but also implementing consumer data. In the end, a hybridized digital offering requires a multi-pronged approach with the entire bank on board.
Virgin Money announced today it has become the latest brand to join Experian’s pre-qualification platform.
The deal means that Virgin Money will now appear on Experian’s panel of lenders that are aggregated on lending websites and advisor platforms to help prospective borrowers check their eligibility and make informed decisions on their home purchase.
“Going through a lengthy mortgage application just to be turned down can be frustrating for everyone involved, not least the buyer who has found their dream home,” said Lisa Fretwell, Managing Director of Data Services, at Experian UK&I. “By checking eligibility at the beginning of the journey, potential customers can see which mortgages they are likely to be accepted for based on their financial circumstances, while at the same time avoiding damage to their credit score.”
Ultimately, Experian’s solution offers an automated decision based on credit history. If the system accepts the borrower, they will see details of the maximum amount they can borrow.
Borrowers can find Virgin Money’s mortgage products on pre-qualification platforms including Mortgage Gym, New Homes Group, Mojo Mortgages, Property Pal Mortgages and Iress Xplan Mortgage.
Experian offers a range of tools to help lenders make more informed decisions more efficiently in a way that safely leverages consumer data. Among these tools is Experian Lift, which the company launched last year. Experian Lift is a suite of credit score products that combines traditional credit, alternative credit, and trended data to provide a holistic picture of consumer creditworthiness.
Tools like these are especially useful in today’s economic environment, when uncertainty persists throughout many areas of consumers’ lives.
