Finovate Fall 2018: A review

Assisting incumbents rather than disrupting them

Finovate Fall is completely different from other fintech spots that this great brand promoter of great quality trade show in the segment choses: San Jose breathing in the radical San Fran optimism and Europe demonstrating prowess in B2C fintech alternative to incumbent offers.

Finovate in New York matured into a decent B2B solution trade-show with a dominant share of services pitched from stage being offered specifically for incumbent financial institutions. In total, the USD trillions they still control and the sizeable majority of customers that bank with banks — make them an appealing conduit to integrate the new tech and reap rewards both in terms of logistics (cost of distribution) and the arbitrage (by switching from old tech to the new one).

Finovate also pose in itself a great lense of current preoccupation of buddying entrepreneurs of the field. Based on calculations, fraud prevention and customer authentication and verification technologies lead this year with 11 or so pitches (see the short teaser about each company as stated on Finovate website):

Antifraud and biometric and behavioural security:

1. Access Softek uses AI and machine learning to enable financial institutions to combat the growing and evolving risk of fraud.
2. Adobe’s integrated solution leverages AI and facial recognition to remove friction from accessing money while improving security for retail banking channel executives.
3. Arcanum Technology’s authentication solution uses a patented dynamic virtual interface leveraging proprietary DARC Cipher to combat password/data breach/hacks and password fatigue for financial institutions and services.
4. Averon’s login solution solves the lengthy, difficult (and oftentimes frustrating) login process for the financial community (all areas).
5. Biometric Signature ID uses biometric passwords drawn with a finger or mouse to help financial institutions prevent imposters from stealing passwords and committing fraud.
6. ID R&D’s biometric authentication solutions use scientific breakthroughs, proprietary research and frictionless UX.
7. DualAuth secures payments through the use of mutual authentication via mobile and beacons.
8. Onfido’s AI-enabled technology uses facial biometrics and document checks to help global financial services businesses with digital identity verification.
9. PasswordPing’s compromised credential screening solution uses secure APIs tied to a salted and strongly hashed backend database of billions of compromised credentials from the dark web to stop authorized authentication by cybercriminals.
10. SecuredTouch balances security and user experience by using behavior biometrics for authentication and fraud detection.
11. Tala Security targets advanced security attacks against web apps as well as PC and mobile web users.

Behaviour and targeting specific users with events either tailored to something they should not be doing like in security, also has implications in proactive marketing, real-time events triggering and product offers. This is built using either user transactional data — the knowledge of loans taken, credit limit utilised, or going deeper to understand what did users buy and grasping the real-life behaviour:

1. exagens Personal Banker: autonomous digital banking assistant with proven results increasing conversion rates & retention while lowering costs.
2. Experian has developed an enterprise-grade SaaS platform to enable precise customer decisions across the life cycle using a unique blend of best in class data, analytics and decisions strategies. This includes helping financial institutions make lending decisions with less risk.
3. Enova Decisions has solved the “cold start” problem in algorithmic decision making for businesses entering new markets with digital decisioning technology, machine learning, big data, business rules management and optimization.
4. unblu helps the world’s leading banks to increase revenue and reduce costs by delivering an in-person experience online that helps them provide a better user experience to their prospects and customers.
5. Envestnet Yodlee’s Business Intelligence Solution allows financial institutions, wealth management firms and fintech companies to understand and sell new products and services to customers at the right time using breadth and depth of financial data coupled with AI-driven consumer apps and robust and easy to understand data analytics.
6. Bond.ai’s’ empathy engine’ — a human-centered AI platform — closes the gap and disconnect between banks & consumers.
7. Meniga targets lack of customer engagement and loyalty and uses internal and 3rd party data to drastically improve the digital banking user experience for bank and financial institution customers worldwide.
8. Cashoff enhances customer engagement with its loyalty program offering cash back by big-name brands.
9. Prisma Campaigns’ omnichannel marketing campaigns orchestrator uses machine learning to deliver real time segmented and personalized offers and solve cross-selling challenges on digital and non digital channels for financial institutions of all types and sizes.
10. Nordigen Solutions’ data analytics solution equips banks and alternative lenders with a better understanding of their customers.
11. SaylentTechnologies’ customer engagement platform translates data into actionable insights using experience, data science and machine learning.

Leveraging the new-found opportunities can be hard due to product limitations banks have — unable to create a value-added service, they seek to build a marketplace approach and benefit from 3rd party services built-in via APIs that are slowly being offered:

1. FI.SPAN’s cloud-based services management platform uses APIs to connect customers and fintechs to financial institutions in the US and Canada with over $5bn in assets and significant commercial and business banking.
2. Open Bank Project’s developer friendly and modern APIs move banks into the digital age.
3. Tinkoff Bank’s “Stories feature delivers best targeted offers and increases transactional activity and financial awareness for customers.

There is markedly less incentive this year to present B2C facing fintech products, nearly all of them around disenfranchised segments that are poorly serviced through traditional products of banks. This has to do with convoluted state-by-state regulation that disallow scalable fintech models without investing capital that destroys the value creation potential (hence most scalable fintechs thrive outside of the US):

1. Banzai’s financial literacy solution uses a choose-your-own-adventure simulation allowing people to make decisions and experience consequences in a fun, safe environment.
2. Bucket Technologies‘digitization of coins at the point of sale aims to eliminate the wasteful cycle of physical coins for retailers & cash-paying consumers.
3. Bumped gives easy access to the stock market for over half the population who doesn’t traditionally invest by allowing them to own the brands they love.
4. Ballooning Nest Eggs’ gifting platform allows parents to share their kids’ slew of celebrations and subtly prompt and easily enable their network to gift directly into the kids’ investment accounts.
5. Golden’s financial assistant app helps the 75 million baby-boomer adults managing the finances of 50 million senior parents.
6. Lomsy looks beyond credit scores to promote financial inclusion in underserved communities and among individuals with little credit history.
7. Sezzle’s payment platform solves the lack of credit available to young consumers using gamification and progressive credit profiling to give them purchasing power when they need it.

The unifying element for most of B2C offerings is that they better than most sense the importance of “medium being the message”, calibrating the message of the pain-point solving through the characteristics that are received by the target audience. Since they cherish emotional nudges, creating saving behaviour in an environment of low returns, casual language and intuitive gestures, all these are pioneered first by daring startups and is then slowly repeated by incumbents. Every small thing matters:

1. Billshark’s API powers a white-label bill reduction solution for consumers and small businesses, as the company showed to Finovate audience how Messenger-based nudges can be more effective to get customers to change their behaviour and save money on bills and cancel subscriptions.

Banks are still focussed on improving their onboarding processes and cutting costs in relevant product lines:

1. AI Foundry’s end-to-end mortgage origination solution uses AI and machine learning to extract relevant data and classify documents to improve data sharing and comparing for banks and mortgage origination companies.
2. ieDigital’s financial health tool gives credit unions an opportunity to deepen their connection with customers by offering them a solution to manage their day-to-day cash flow.
3. ING Bank’s Invoice Financing solves the challenge of irregular liquidity gaps for entrepreneurs and SMEs using a quick and self-explanatory online platform.
4. LoanScorecard’s non-agency automated underwriting technology solves portfolio and non-QM lending challenges for financial institutions.
5. ecosystem.Ai’s Computational Social Science Platform uses a Client Pulse Responder to solve financial behavior analytics for transaction clients.
6. ETFLogic’s Quant-in-a-Box” Software Solution solves questions around the liquidity and risk of ETFs using Quant Tools and Analytics that traditionally have been difficult to understand or calculate.
7. Tolerisk’s SaaS tool solves the problem of weak, one-dimensional risk tolerance assessments for investment advisors.
8. CashDirector’s Virtual CFO application uses an automated accounting platform integrated with online banking to improve SME lending & cash management.
9. Interactions’ omnichannel Intelligent Virtual Assistant (IVA) uses a blend of AI and human understanding to solve frustrating customer experiences with banks.
10. iGTB’s Contextual Banking Experience” targets customer dissatisfaction with the current, traditional corporate banking experience using APIs, AI, machine learning, “best-next action” recommendations and “best next offer” point-of-need bank product offerings.
11. CashDirector’s Virtual CFO application uses an automated accounting platform integrated with online banking to improve SME lending & cash management.
12. Digital Onboarding’s SaaS platform uses guided digital journeys, SMS reminders, and machine learning algorithms to remedy poor customer/member activation rates for banks and credit unions.
13. Alpharank provides banks and credit unions with opportunity to acquire new deposits at lower cost using Alpharank’s Marketing Cloud — powered by the graph.
14. James Finance is a one-stop shop for credit risk management allowing lenders to easily create, validate, deploy, and monitor regulation-ready, high-performing predictive models.
15. ebankIT uses out-of-the-box digital channels for bank and credit union digital transformation.
16. Namaste Credit’s automated credit assessment memo tool improves SME application review time and accuracy using image enhancement, OCR and advanced analytics.
17. NestReady’s machine learning predictive analytics model gives visibility into the homebuying customer lifecycle for mortgage lenders so that they can analyze their portfolio and take action in a timely manner.
18. aixigo’s digital wealth management technology provides high-performance front-office functionality for retail banks, financial advisors, wealth and asset managers via a modular, predefined API-first high performance platform.
19. Cloud Lending Solutions’ configurable digital engagement platform allows financial institutions to provide online experiences to their borrowers
20. CrediVia’sonline lending marketplace optimizes loan financing for hospitality lenders and borrowers.

Banks are also looking at how they can educate their customers and employers through interactive scenarios — as well as rollover best cases of customer service to algorithms:

1. BlueRushhas created IndiVideo, the interactive personalized video platform for financial services.
2. Horizn’sKnowledge Platform solves digital adoption and digital transformation for financial service employees and their customers using proprietary micro-learning and engagement methodology.
3. Launchfire’sgame-based platforms motivate and change customer & employee behavior to drive adoption of digital banking products.
4. Systelos’ discovery and collaboration platform eases the friction in exchanging value between financial advisors and their clients.
5. Salemove improves customer engagement and experience using instant live video chat and guided browsing with no downloads and no installations required.
6. Relay’sCX Builder leverages the automated creation and delivery of proactive, prescribed digital solutions to solve crucial moments in the customer lifecycle for digital and CX focused leaders in banking and financial services.

This year there has been only 2 cases of Crypto-related businesses

1. Crypterium’smobile app solves the challenges of using cryptocurrencies for payments for the millions of people across the globe who recognize the advantages of cryptocurrencies over fiat money.
2. Fortr3ss’ Oracle service to Corda and Ethereum blockchains uses intelligent voice biometrics and artificial intelligence to solve the identity of node players in smart contracts for financial and healthcare institutions adopting blockchain.

Overall, should one try and summarise the key movements:

Omnichannel security requires understanding of behaviour and not capturing of physical artefacts that can be still stolen or emulated. The very same competence of understanding user behaviour allows for better in-the-moment offering of relevant financial and merchant-funded offers: building the bottomline that’s currently depleted due to regulation, old tech and low margins, while also forming a loyal audience that would be harder for competition to lure away.