editions

Because the promise of quantum computing is enormous but the reality is still a long way off, low-intensity programs – like Wells Fargo’s work with IBM – enable experimentation and skills-building without monopolizing resources.

Wells Fargo began diving into quantum computing in 2019 and is working with an MIT-IBM research group to test use cases like rapid re-calculation pricing for a large book of trades, CIO for digital technology and innovation, Chintan Mehta, told CIO Magazine. 

While quantum could dramatically increase the bank’s efficiency, Mehta is clear-eyed about how it could take years – if ever – for Wells Fargo’s research investment to pay off: “With quantum, the probability of failing is higher because you haven’t proven anything and there’s no common baseline against which to measure.” 

Quantum computing could be a game-changer for risk analysis, forecasting, and fraud detection, among other applications, and financial services firms are betting on the technology in different ways: JPMorgan Chase, Barclays, and Goldman Sachs are also working with IBM, while BBVA has partnered with startup Multiverse Computing, and Goldman and Citi have invested in QC Ware.   Read more about the challenges of quantum computing, and how startups and major tech firms are approaching it, here and the full interview with Mehta on CIO.com. 

BNP Paribas Securities Services wants to let its institutional clients issue, transfer, settle, and safekeep tokenized bonds and equities alongside their traditional assets – and partnering with fintechs will let it do so quickly and compliantly, at scale, as various regulations shake out and evolve.  

A race among the biggest banks and custodians to roll-out large-scale digital asset initiatives has been growing. Citi, BBVA, and DBS also work with Metaco, whose CEO, Adrien Treccani, cites a “momentum effect” as being in motion: “Now that some of the largest global custodians have gone public with their strategy, other banks in the market will feel the need to encroach on their turf and demonstrate their capabilities to the industry,” he told Insights Distilled.  BNP will integrate Metaco’s custody platform, Harmonize, into its current infrastructure to create a “multi-asset, multi-provider platform,” giving clients more transparency into all their assets – as well as operational efficiency and risk management – though it won’t deal with cryptocurrencies like Bitcoin.

BNP is also working with Fireblocks as its hot wallet, tokenization, and connectivity layer.

As banks face a rash of fines (or firings) for unauthorized employee communication, they are choosing to shell out for tech tools to monitor popular chat apps like WhatsApp instead of stopping workers from using them.   

Q2 earnings brought a spate of new probe disclosures from big banks: Regulators are likely to extract a combined $1 billion in fines from Morgan Stanley, JPMorgan, Citigroup, Goldman Sachs, and Bank of America for failing to monitor all employee messaging.  

As a result, tech firms that provide comprehensive, compliant communications coverage across all the channels employees flock to are in higher demand than ever: SteelEye has seen a 255% increase in visits to its communications monitoring pages in the last six months and a 30% uptick in inbound requests, it told Insights Distilled, while Movius made news for signing on Deutsche Bank as regulators increase their levels of security.   

“Employees want to communicate in ways they are most comfortable—voice, text, WhatsApp, and Microsoft Teams. It’s about choices,” Movius CEO Ananth Siva told Insights Distilled. “Now employees no longer need to carry two phones.” 

SteelEye said that “a number of global banks” use its platform, as does Fidelity International, while Movius counts JPMorgan, UBS, Jefferies, and Shanghai Pudong Bank as customers (and the latter went from realizing its need to deploying the tool in just 15 days).

Meanwhile, a firm called Txtsmarter claims to be the only communications surveillance firm that can seamlessly monitor Apple’s iMessage.

Monitoring and analyzing customers’ digital behavior can spur design tweaks and fresh strategies that drive new business: NatWest made a simple change based on Contentsquare insights that increased completions of its online mortgage agreement tool by 20%.  

Contentsquare’s monitoring and analysis tools can reveal how customers are engaging with digital products and highlight popular content, points of friction, and recommendations for change, like how it helped NatWest realize that it needed to emphasize the “Get an Agreement in Principle” button on its mortgage calculator.  

“Contentsquare is at the heart of our decision-making process,” a NatWest digital experience manager said in a case study. “It has more than paid its own way and I’m sure it will continue to do so.” The firm just raised a $600 million Series F round of funding. 

Sophisticated user analytics with AI-driven recommendations are a key way for FI’s to boost customer acquisition: BMO and Western Union both rely on Quantum Metric, an Insight Partner’s portfolio company, to understand their users and build better digital products, faster. 

Dealing with credit card disputes can be a time-consuming and expensive process for banks (especially as chargeback fraud is on the rise), but automation software promises to increase operational efficiency and reduce losses.  

$187 billion asset KeyBank has tapped fintech Quavo to unify and add automation to its fraud and dispute process, with the software replacing many of the manual tasks bank employees previously had to complete, from claim intake and investigation through resolution. 

“We anticipate our back-office hand-offs and processes will reduce in half while improving chargeback effectiveness,” a KeyBank spokesperson told Insights Distilled, adding that Quavo’s platform “takes out errors and manual processes, giving us capacity to provide more support to our clients and dispute investigations.” 

With bad actors offering professionalized phishing-as-a-service software to dupe customers into giving up their credentials, the need for comprehensive customer education is more dire than ever. 

Criminals can pay as little as $50 a month to run a realistic-looking Wells Fargo website that includes 24/7 support, according to a report from IronNet, which recently uncovered a large-scale phishing-as-a-service scheme by a platform called Robin Banks. Robin Banks sells access to “phishing kits” that let bad actors easily imitate the likes of Wells Fargo, Citi, and Bank of America, in order to steal customers’ credentials. Bad actors using the kits have stolen at least $500,000 from victims, according to the researchers. 

While it stands out for its slick, professionalized toolkits, Robin Banks is just one example of a much larger problem: A record 1,025,968 phishing attacks occurred globally in Q1, surpassing 1 million incidents in a single quarter for the first time, according to the Anti-Phishing Working Group.  

“Customer education is the most important way of mitigating these types of attacks,” IronNet threat intelligence analyst Morgan Demboski told Insights Distilled. Banks need to “properly warn customers of the possibility of being targeted” and educate them on how to spot fraudulent emails, texts, phone calls, and websites. 

Software that tracks governance risk in real-time can both improve executive decision making and reduce audit failures, which in turn cuts down on reputational damage and fines. 

A Fortune 500 financial institution recently refreshed its governance process: In a matter of weeks, it went from manually managing its compliance program in Word Docs and Excel spreadsheets, which were instantly out of date, to adopting RegScale’s API-powered automation platform. RegScale serves as a compliance system of record, integrates with the firm’s security tooling (in this case, Wiz, an Insight Partners portfolio company), maps information to compliance requirements, automatically creates necessary tickets, and spits out audit-ready documentation. 

“[The firm] now visualize their compliance and risk posture in real-time, for their board and decision makers,” RegScale CEO Anil Karmel told Insights Distilled. “The first reaction is, ‘It’s too good to be true.’” 

The new system saves time and reduces human error, while also providing a more accurate understanding of current risk.  

“It’s transforming the culture of compliance to be real-time, continuous, and complete,” Karmel said. 

RegScale just announced $20 million in fresh funding. 

Trade finance has traditionally been a highly manual, paper-based process with multiple checkpoints – making it ripe for digitization, automated classification, data extraction, and machine-learning powered accuracy checks.  

Deutsche Bank just announced that it’s further integrating with Traydstream, a platform that digitizes and extracts data from trade finance documents to automatically check for errors and validate them against global trade and compliance rules.  

Deutsche Bank first started working with Traydstream in 2021 and the deepened partnership is “a further endorsement for automated document checks as a key enabler for the digitization of documentary trade products,” according to Deutsche Bank trade finance lead Claudia Hussy.  

Traydstream says it can slash document checking time from hours to minutes, leading to a potential cost reduction of ~60% over human processing. 

As swamped compliance teams struggle to keep up with the rapid influx of regulatory documents and enforcement actions, AI-powered software that scans, synthesizes, and provides recommendations can improve productivity and reduce errors. 

Compliance.ai monitors sources of new regulation, uses machine learning to highlight the changes that are relevant to a given financial institution, and automatically routes documents to the right internal experts. 

“It’s about simplifying the workflow,” CEO Asif Alam told Insights Distilled. “We can be the ‘network orchestrator’ within these large organizations, allowing the office of the Chief Compliance Officer to easily connect the dots in their organization.” 

A study the firm conducted with 10 compliance teams showed that its software reduced the volume of documents that needed manual processing from an average of 25,537 down to 585, which it estimates would save compliance teams an average of 87 days of work every 6 months.

Compliance.ai targets mid-size banks, large asset-management firms, and insurance companies, and just raised $6 million. 

Low-code platforms like Genesis (an Insight Partners’ portfolio company) provide ready-made, reusable code components that can simplify and speed up the development process.

A consortium of global banks recently launched Octaura, which has built an electronic trading platform with baked-in analytics that will replace the traditionally phone-call-driven process of trading syndicated loans and collateralized loan obligations (CLOs). The platform progressed from proof-of-concept to launch-ready in record time because of Genesis Global. Genesis’ platform has reusable “building blocks” that financial institutions can use to either launch services like Octaura or integrate new apps into their existing legacy systems.

“It enables agile, fast development,” Citi exec and Octaura cofounder Vitaliy Kozak told Insights Distilled, estimating that Genesis allowed Octaura’s platform to launch about five times faster, and at a fraction of the cost, than it could have otherwise.

Citi, Bank of America, and BNY Mellon recently invested $20 million into Genesis, though Citi first made an investment in 2020.

“This is going to be a game-changer for the whole industry,” said Citi director and Octaura cofounder Katya Chupryna, who works in a unit that invests in and incubates tech companies. There are currently several active Genesis deployments across the firm.

“The world is changing, the pace of development is changing, and we’re trying to change with it,” Kozak said, “And Genesis is one of our partners to help us get there.”