editions

Creating teachable moments in virtual reality can lead to immersive, focused, and memorable training programs for bank employees, which are ultimately more effective than the status quo.

Bank of America has ditched written guidelines and online videos for some of its most crucial employee trainings. 

Instead, the bank uses virtual reality technology to immerse employees in 3D environments where they can practice skills and build knowledge in real-time.  

For example, one of the bank’s training modules mimics a bank robbery, where employees must respond to having a gun pointed at them or being passed a threatening note demanding money. They’re coached and then given the opportunity to act out the scenario in VR.  

VR trainings offer an immersion, focus, and emotional resonance that’s rarely achieved through text or video-based curriculums. 

“When you’re in VR and you’ve got someone pointing a weapon at you or screaming at you, asking you to do something, it’s somewhat duplicating that feeling that you would have in real life, because of the level of immersion,” Bank of America SVP Mike Wynn told Insights Distilled. “I want someone to feel a little anxious or a little nervous in a fake environment, because I don’t want them to feel that way for the first time if it ever happens to them. That’s why VR is so powerful as a modality, because it gets you to feel as if you’re in that moment, so that you can develop some level of muscle memory.” 

As a measure of the success of the trainings, Bank of America has seen a significant drop in 911 calls by its bank tellers, because they’ve learned how to deescalate situations more effectively than before.   

BofA launched its first VR training course in 2020 and now has 19 types of VR modules, including executive trainings, interviewing courses, empathy-building exercises, and practical instructionals for processes like opening or closing a bank branch.  

The bank works with an ever-evolving group of hardware and software partners, Wynn said, as it vies to provide the most comfortable experience possible for its employees. (On the hardware side, Apple made a splash Monday when it announced its first VR headset.) 

Other banks have crafted their own experiments with the metaverse, too: Sociéte Générale and Deutsche Bank host client presentations in virtual reality, while BNP Paribas lets its users check their account activity and transaction records in VR.  

“I think we’re still just scratching the surface of how we can leverage VR to give people a very different experience, whether it’s exploring how we use it for mental health or collaborative team experiences,” Wynn said. “There’s so much more that can be done.” 

Travel remains a top-spending category for US consumers. By providing an exceptional in-house booking experience where customers can spend their credit card points, banks are building loyalty while also carving out additional travel spend for themselves.  

Capital One continues to ramp up its tech-driven and luxurious travel offerings.  

The bank just bought Velocity Black, an AI-powered digital concierge that provides experiences like Wimbledon tickets, ski safaris, or swimming with sperm whales. Its artificial intelligence-powered offering lets customers receive recommendations, book experiences, and snag travel upgrades through instant messaging.   

Velocity’s “deep service expertise and unique tech platform” complement Capital One’s existing services, according to the bank’s SVP of experiences, Matt Knise. The acquisition builds on Capital One’s recent investment in travel booking portal Hopper and its collaboration with dining-focused platform SevenRooms, and marks the bank’s further appeals to an affluent customer base historically dominated by rivals like Amex.  

Capturing the loyalty of wealthy clientele through top-of-the-line tech and exclusive experiences is in vogue, and other big FinServs have been beefing up their travel products through partnerships, acquisitions, and investments as well. 

Here’s a non-exhaustive rundown of recent moves: Amex invested in hotel booking company Selfbook, JPMorgan bought luxury travel agency Frosch, Citi is partnering with Booking.com and invested in car rental startup Kyte through its VC arm, and US Bancorp bought travel platform TravelBank.  

Citi’s latest technology improvement isn’t sexy, but it sure is effective: The bank invested in a system that scans 95 million monthly trades to catch human errors – and it’s already preventing what could be costly mistakes.

Citi’s SMART system is dramatically reducing human error in its trading division, CEO Jane Fraser revealed during a talk at the Bernstein Strategic Decisions conference on Friday.   

The technology aims to provide an antidote to the typing or execution errors that have led to tens of millions in losses for the bank in the past.  

“All of our trades that aren’t completely straight-through processing go into the SMART system to check for any fat-finger errors,” Fraser said. “As 95 million trades a month go through the system, the error rate, unsurprisingly, has fallen by 86%.” 

That anecdote exemplifies Citi’s larger focus on reshaping its digital processes to be more efficient and safer.  

The bank is investing “heavily in operations and in the technology teams,” Fraser said, “Because they’re the ones that are doing the heavy lifting of making sure that we get to single processes, and that we get to single technology architectures where we may have been fragmented before.” 

A tech firm aims to help women at financial services firms learn to play poker, because it helps them build the skills they need to succeed at the office.

Playing poker can make you more effective at work: That’s the thesis of a platform called Poker Power that provides instructions and strategy to women, who don’t learn the game growing up as frequently as men do.  

President Erin Lydon worked on Wall Street for years and realized the hard way that she didn’t have the same ingrained negotiating instincts as many of her male peers when she missed out on earning a higher bonus. 

Poker Power aims to change that status quo by educating women on the game while coaxing them to see how their newfound skills translate to the real-world. Playing poker can help people learn how to better negotiate, read their peers, spot patterns, know their value, take calculated risks, and gain confidence.  

“Through the repetitive gameplay of poker, you can learn to translate those skills and strategies to the workplace,” she told Insights Distilled.  

Poker Power has over 200 corporate and high-education partners in total, including Bank of America, Morgan Stanley, and other FinServs, Lydon said. The firm teaches sessions either in-person or through Zoom paired with its proprietary platform, and as one-off lessons or longer classes. 

“Part of our primary clientele is in the financial world,” Lydon said, including banks, private equity firms, and VCs. It’s critical that women in the industry “are gaining as much skill and strategy from the game of poker as possible that they can then bring back to their own businesses.” 

An automated tool that aggregates client data from internal and external sources can ensure that bankers are getting comprehensive information without a lot of legwork.  

Bank of America has an internal tool to help its employees prepare for client meetings more efficiently and effectively.  

Employees can use Banker Assist to collect information from internal and external databases, including government filings, to thoroughly prepare for meetings without spending hours on research. 

“You don’t want [employees] to spend three days preparing for the meeting, nor do you want them to spend only a couple hours preparing for the meeting and getting 10% of the information they need,” chief experience officer of business, Rob Pascal, told Insider. “That was the genesis of Banker Assist.” 

Beyond making employees more efficient, the tool also helps them forge deeper relationships, since they’re coming to client conversations with more context. They can also use Banker Assist’s desktop or mobile app to take notes following a meeting.  

BofA’s tool is just the latest example of FinServs using artificial intelligence to make datasets more accessible for employees: Morgan Stanley and investment firm EQT have both built similar internal products.  

While artificial intelligence has many uses within financial services, it’s not well-suited to predicting the stock market, because the data is too dynamic, unstable, and broad.  

Artificial intelligence is amazing, but don’t expect it to predict the stock market for you, according to Marty Chavez, Sixth Street vice chairman and former chief information officer at Goldman Sachs.  

At its core, AI is simply “statistical pattern matching,” Chavez said during Bloomberg’s recent Invest conference.  

“It’s extremely powerful and it’s interesting, but I do not see AI achieving what some would call the ‘Holy Grail,’” he said. “Everybody wants to know, ‘What’s the S&P going to be in six months?’ I can’t tell you, and neither can AI.” 

The strengths of AI don’t translate to such a broad and unstable use case, he said.  

“The successes that we’ve seen in AI — and they are amazing, they are brilliant — all come from one profound realization,” he said, which is that AI is great at dichotomizing data. It can identify cats based on gobs of labeled training data, because the concept of a cat is stable. The stock market, by contrast, doesn’t have the same consistency, so that kind of pattern matching doesn’t translate well to Wall Street, he said: “The stock market is notoriously not a stable distribution.” 

While broad, generalized stock market predictions may never come to pass, artificial intelligence can provide tradable signals about very specific outcomes based on specific signals – for example, analyzing the tenor of Fed statements to predict market moves. 

The US Consumer Financial Protection Bureau (CFPB) recently warned financial institutions that it’s on the lookout for “poorly deployed chatbots,” as the generative AI wave continues.  

The US government has its eye on how FinServs are using artificial intelligence for customer service after receiving numerous complaints about the technology.  

The CFPB recently released an advisory that raised concerns about effectiveness, privacy, and false information in AI-powered customer service.  

“To reduce costs, many financial institutions are integrating artificial intelligence technologies to steer people toward chatbots,” CFPB Director Rohit Chopra said in a statement. “A poorly deployed chatbot can lead to customer frustration, reduced trust and even violations of the law.” 

Here’s what to keep in mind to protect consumers (and your own institution):  

Keep humans accessible. Even if a chatbot is the first line of customer service, consumers should be able to easily talk to a real person if they want to. The best chatbots make it simple and intuitive to switch to a human agent: They don’t force customers to get stuck in repetitive loops.  

Safeguard data. Protecting customer data is key. Chatlogs should be secure and private. This risk is especially noteworthy for FinServs working with third-party providers (the government also recently released guidance on how banks need to conduct due diligence on fintechs or other vendors). 

Know which problems to tackle. Chatbots are well-suited for simple tasks like retrieving account balances, looking up recent transactions, and paying bills. Be wary of assigning complex problems to chatbots, like explaining the nuances of new products or services, for inaccurate information could lead to fees or other penalties.  

Nearly 6 million US households are “unbanked,” making it crucial for governments and corporations to pay people in innovative ways.  

BNY Mellon is teaming up with fintech MoCaFi to help serve people without bank accounts or who have limited access to financial services. These communities are often low-income, under-educated, Black, or Hispanic, and blame minimum balance requirements, or trust and privacy issues, as the main reasons for not having accounts.  

The bank’s Treasury Services arm will integrate MoCaFi’s technology to allow its clients to pay people through the fintech’s digital disbursement platform, which includes prepaid, no-fee debit cards, FDIC-insured bank accounts, a money management app, and more.  

“The inability to provide digital payments to a significant portion of the US economy has been a major hurdle for both public and private sectors,” Treasury Services CEO Jennifer Barker said. “Through our commitment to innovation, we met this challenge head on and are thrilled to join forces with a fintech doing outstanding, tangible work in our communities.   

For example, a large grocery store chain may have a significant percentage of workers without bank accounts who can be paid through MoCaFi, while a government may want to better distribute disaster relief funds.    

“MoCaFi first connected with BNY through an introduction to Robin Vince, BNY Mellon’s CEO,” founder Wole Coaxum told Insights Distilled. “The collaboration was borne out of an opportunity that BNY saw to reflect its broader commitment to financial inclusion, helping to connect unbanked and underbanked individuals and communities to high-quality financial services.” 

The MoCaFi integration is part of BNY Mellon’s Vaia payments platform, which it launched last fall, and which can also help its clients ditch paper checks in favor of real-time payments options. 

Nasdaq wants to better weave itself into the financial technology ecosystem, which provides steadier revenue than its marketplace.

Nasdaq’s evolution from stock exchange to comprehensive tech provider continues, as the firm announces plans to buy financial software firm Adenza.  

Adenza’s platform helps banks and brokerages manage trading, risk management, and data reporting, and would add to Nasdaq’s compliance-focused software services.  

“This is an incredibly exciting deal for us as we continue to transform the company into a leading technology company that serves the industry,” Nasdaq CEO Adena Friedman told The Wall Street Journal.  

The acquisition, if completed, would help Nasdaq grow its software-related revenues, which are steadier than those dependent on trading volumes, and would be the firm’s largest-ever acquisition. 

JPMorgan’s data platform for institutional investors is using a slew of partnerships to make ESG investing more cost effective for its clients, as environmental, social, and governance concerns continue to be a hot topic for regulators, board members, and customers alike. 

JPMorgan is making sustainability-focused investing easier and more efficient for its clients.  

The firm’s Fusion unit just announced partnerships with nine providers to bring sustainable investment data onto its platform. Fusion ultimately aims to give institutional investors faster access to timely analysis, compliance monitoring, and reporting, at a lower cost. 

“Data for sustainable investing is particularly challenging given its scale, inconsistency, and incompleteness,” head of data solutions Gerard Francis said. “Fusion combines data, technology, and service at scale, to enable investors to extract value in minutes instead of months.” 

Large financial institutions like JPMorgan ultimately want to help their clients achieve their ESG goals, which requires robust technology and reliable data. To that end, Bank of American and Goldman Sachs invested in an environmental markets platform earlier this year.