editions

As Millennials and GenZ report feeling particularly anxious about their finances, Fierce wants to win over converts by being laser-focused on helping customers build wealth through features like fractional-share investing, securities lending, education, and an APY of up to 4.25% for checking accounts.

Rob Cornish believes he’s built the “feel-good finance app” of the future.  

The former CIO of NYSE and CTO at digital asset exchange Gemini, Cornish just launched Fierce with $10 million in funding to bring together previously disparate services into one platform.  

No other players – whether legacy banks or digital upstarts – combine all these services in a single consumer-friendly app, Cornish says. 

“There was still a gap in the market where people needed a company that could provide the best aspects of traditional and digital finance, where the customer doesn’t have to make compromises on what’s important to them. That’s really where the foundation of Fierce began,” Cornish told Distilled.  

He considers Fierce a “super app” because it brings the best individual products together: “In the last five years, there’s been a wealth of new infrastructure fintech solutions that have come out,” he said. “We look at this as an ideal time to partner with those and bring them together into one solution.”  

Beyond Fierce’s trading products and educational resources, the firm also has 24/7 live customer support.  

AI-based tools for financial advisors can automatically integrate their client’s objectives, priorities, and risk tolerances, saving significant time for planners while providing more personalized advice for people, too. 

Fidelity International Strategic Ventures, BNY Mellon, and RBC all contributed to the $24 million CAD funding round of Conquest Planning, a tech platform that aims to modernize financial planning.  

Financial advisors spend an average of 10 hours creating each financial plan, not including the time to deliver it: Conquest aims to reduce that time significantly through AI-powered strategic advice managers that automatically build plans that the advisor can then adapt.  

The platform “points them in the right direction, instantly illustrating the impact of different scenarios on the client’s goals (saving more, retiring later, et cetera),” chief revenue officer Brad Jourdie told Distilled, adding that the company has seen advisors create plans in less than an hour using Conquest. 

BNY Mellon started integrating Conquest’s tools into its Pershing X technology platform late last year to “streamline advisors’ workflows,” says exec Ainslie Simmons, which helps “boost productivity, job satisfaction, and client service.” 

Conquest will soon launch with both Fidelity and RBC to support their advisors, too.  

This funding round is the latest signal in the wider push to integrate AI tools into financial advising as a way to give clients personalized advice, without a high price tag. Using AI to draft plans gives advisors more time to add personal touches, which helps strengthen relationships and build trust.  

Late last year, BNY Mellon also invested in fixed income platform bondIT to help its financial advisors better manage client portfolios, while JPMorgan recently invested in two portfolio construction startups as well. 

Observability tools help organizations manage their complex data pipelines by using machine learning to flag data-quality issues and aide capacity planning. Ultimately, they help firms get the full business value of their data while keeping costs under control. 

Even the best data strategies will fail to produce results if the actual management of the data lacks visibility and control.  

To that end, enterprise data observability firm Acceldata just announced $50 million in fresh funding from investors, including Insight Partners. The firm counts massive firms like Oracle and Verisk as customers, as well as Walmart-owned fintech PhonePe, which was able to reduce its data warehouse costs by 65% thanks to Acceldata.

Acceldata provides end-to-end visibility into data quality, processing power, and performance across all data sources, while using machine learning to analyze (and predict) issues.  

Ultimately, its platform delivers “highly reliable monitoring and data quality,” according to Insight Partners managing director George Mathew.  

“These pipelines require validating half a trillion data points at scale in a matter of hours, every day,” he told Insights Distilled. “This is where Acceldata comes in, to provide their leading data observability offering.” 

Insurers are often dealing with complicated customer processes (sometimes in the wake of catastrophic events), so adding AI and automation to behind-the-scenes support can save precious time.

Customer experience automation firm Ushur just raised $50 million, including from the Aflac’s venture arm, for its customer experience platform that targets highly regulated industries like insurance and banking.  

Its platform goes beyond robotic process automation (RPA) and other legacy approaches that are too brittle for customer engagement: This kind of tech is “fine for automating rote back-office jobs, but it’s too brittle for more nuanced tasks, especially anything that involves human interaction,” Ushur’s chief marketing officer, Kashif Mahbub, told Insights Distilled.  

Instead, the platform uses conversational AI and document understanding to deliver hyper-personalized customer experiences, it says. 

The firm boasts that it can improve customer engagement rates by as much as 85%, reduce email triage times from five days down to five minutes, and slash issue-resolution times by as much as 90%. It counts Aetna, Aflac, Tower Insurance, Irish Life, United Healthcare, and other Fortune 500 companies among its customers. 

As US Bank moves its apps to Microsoft’s cloud, it’s dedicated to upskilling all its tech workers through a cost-effective training strategy that takes advantage of grassroots enthusiasm and talent.  

US Bank has tapped a small group of internal advocates to spread the gospel of the cloud among their coworkers.  

The bank, which committed $600 million to moving 1,300 apps to Microsoft’s Azure cloud, wants all its 7,000 technology employees to get cloud-certified over the next two years, and, to get there, it’s given support to several dozen volunteer coaches to train their peers, according to a feature in American Banker.  

Over six months last year, 30 volunteers guided 1,200 people to complete a certification. Each cohort spent 70 to 80 work hours over six weeks with a blend of employee coaching and Microsoft-provided classes. It intends to continue this strategy to train its entire team.  

US Bank’s approach is “very fintech-y,” according to PwC banking lead Peter Pollini: “Teams collaborating together and saying, ‘Hey, there’s a problem. Let’s now shift as a team and figure out how we can solve that problem together.’ That’s not the way that you would necessarily think of a bank upskilling their talent in the past.” 

As US Bank makes the transition to the cloud, it needs its existing workers to be knowledgeable and well-equipped for its new reality. And it aims for the process – dubbed Certfest – to feel “inspiring,” according to US Bank head of enterprise architecture Madhu Rao: “We have created an ecosystem where we are shopping within our closet to look for people that are already experts, and then we are providing them the opportunity to go and impact people.” 

Involvement with crypto is spooking banks, but digital assets more generally remain attractive: Banks are still interested in letting their clients issue, transfer, settle, and safekeep tokenized equities, and startups are jockeying to provide infrastructure. 

Digital asset infrastructure firm Taurus has raised a $65 million Series B led by Credit Suisse, with participation from Deutsche Bank, Arab Bank Switzerland, and others.  

Taurus’ platform is built to issue, custody, and trade any digital assets, including tokenized assets and digital currencies, and its funding highlights how cryptocurrency’s issues haven’t dampened all blockchain-based projects. As Bain’s Thomas Olsen put it to Distilled recently: “Large financial institutions are seeing a window of opportunity” for Web3 this year because of crypto’s problems. 

Taurus says it works with more than 25 financial institutions and corporate clients, including Credit Suisse. 

Credit Suisse expects “to soon launch several digital asset services for clients both on the issuing and the investment side,” exec André Helfenstein said.  

Taurus cofounder Lamine Brahim tells Insights Distilled that one of Taurus’ advantages is that it’s regulated – its T-DX platform for trading tokenized securities obtained a license from Swiss regulator FINMA in 2021 – and that its platform’s tech stack allows it to execute quickly: 

“Taurus controls the full technology stack – software, hardware, cryptography, distributed systems – where others assemble,” Brahim said.  

It plans to use the fundraising to fuel international expansion. Meanwhile, Citi, BBVA, BNP Paribas, and DBS work with infrastructure firm Metaco, while State Street has a partnership with Copper.

AmeriSave’s story offers a case study on how companies clamoring to integrate AI run into the reality that successful projects take significant time and investment – and they need to prioritize carefully. 

The CIO of AmeriSave – one of the largest privately owned mortgage lenders in the US – can’t keep up with all the requests for AI apps within the company.  

While the proffered ideas would tackle various cost issues, Magesh Sarma has seen firsthand that building machine learning algorithms isn’t quick’n’easy. CIOs need to be judicious in selecting projects that will drive significant business value, and use past experiences to resist the temptation to say yes to every request. 

For example, Sarma’s team spent $20 to $30 million each year for several years building one complex algorithm to perform some parts of the loan-underwriting process, according to The Wall Street Journal. Ultimately, it helped AmeriSave fund $24.2 billion in loans, up from $1.86 billion just two years earlier.  

That’s a big reward, but it took significant time and investment.  

There’s so much AI excitement that CIOs need to be measured, lest costs and commitment exceed the final impact.  

“In general, there’s so much work to be done that there are often competing priorities,” according to the CIO of insurance firm Aflac, Shelia Anderson. One of the key factors she uses to determine which AI project to tackle next is time-to-value. For more on evaluating potential tech experiments, check out advice from former Credit Suisse CIO Radhika Venkatraman.   

The challenge of integrating with fintechs is one of the biggest slowdowns of digital transformation, according to bank CIOs. A startup aims to make collaboration much faster and easier.

Sandbox Banking just raised seed funding for its low-code integration platform, Glyue, which helps banks connect fintech products into their existing systems.    

Making legacy core banking systems compatible with new technology can require a tremendous amount of work, but Sandbox says it can reduce development times of common integrations by 80%.

Customers are using APIs built with Glyue to integrate chatbots, balance sheet optimization tools, or banking-as-a-service solutions, which can contribute to top-line revenue growth for them via the interchange revenue from fintech end-users, CEO Ravi Balasubramanian told Insights Distilled.  

Sandbox counts United Bank, Bank Newport, and Silicon Valley Bank – which uses the Glyue platform to move data in real-time between its commercial lending systems and its core servicing platforms – among its customers. 

Just as Stripe has made it dead-simple for apps to accept payments, Sandbox makes working with fintechs a breeze, according to Tuesday Capital investor Patrick Gallagher.  

“What Stripe did for accessibility, Sandbox is poised to do with fintech integrations,” he said. “They are the ‘Glyue’ (pun intended) required to connect the banking sector to the fintech innovations required to compete over the next decade.” 

A combination of factors has decreased the threat that banks face from fintechs: Tighter conditions have squeezed digital upstarts while incumbents have been rigorous in making their own investments. 

Big banks can sleep a little easier, according to a new report from Moody’s.  

Sluggish funding and a slower growth environment have kneecapped many startups while big banks are seeing the fruits of their digital transformation efforts start to pay off. 

“The fintech threat has faded amid reduced funding and tighter regulations, while incumbent banks have stepped up to the challenge,” the ratings agency said. After all, incumbents have “been aggressively defending against [fintech] risks, either through increasing their spending in technology or through partnerships.” 

The current climate presents refreshed opportunities for partnership instead of competition, and the report points to the possibilities of acquisitions, too, as experts predict that 2023 will likely be a big year for bank M&A.  

Remember, however, that careful due diligence and a specialized approach to retaining talent are crucial to making a purchase successful instead of a flop, according to Bain analysts.   

ChatGPT – the AI-powered tool that can respond to prompts and queries in a human-like way – puts data privacy, security, and control at risk for big FinServs, experts tell us. While banning employees from using the tool may provide protection in the short term, banks need to progress their overall AI strategies to integrate its potential, too, they add.

JPMorgan, Citi, Goldman Sachs, and other big financial institutions have restricted employees from using ChatGPT at work, and two experts at tech consultancy Capco tell Insights Distilled that the move provides both benefits and risks.  

ChatGPT threatens data privacy and security, according to R&D lead Ryan Favro, and its algorithmic decision-making also “raises questions about accountability and control.”  

Plus, there are copyright concerns, adds technology delivery principal Luke Penca, and employers may be worried that workers will use the tool to cut corners and become disengaged from their responsibilities.  

Still, banning ChatGPT outright could lead to missed opportunities and frustration among employees (which could lead to riskier workarounds). 

“An immediate drawback to the ‘burn it with fire’ mentality about a technology we barely understand is that our risk adverseness will impede that understanding and stall the arrival of potential benefits to utility and productivity that these tools may hold,” Penca said.  

Similarly, Favro cautions that banks should avoid “unintended consequences” of a ban by considering how ChatGPT could fit into their larger AI strategy and ideating on approaches that “balance risk management with innovation” by protecting data privacy and security.  

For example, Swedish investment firm EQT is using ChatGPT internally to help its deal makers query a giant, proprietary data platform without relying on data scientists.