editions

Giving customers greater control over their first names can build trust and loyalty for financial institutions, while presenting a relatively minor technical hurdle.  

A whopping 70% of transgender and nonbinary individuals say their legal identity doesn’t match their current chosen name and Citi will now make it easier to reflect people’s personal choices. On Monday, the bank announced that it will now allow customers to assign a preferred first name to their debit cards, in accordance with Mastercard’s True Name program.  

The policy affects a person’s name across their cards and in Citi communications, though the bank still needs to collect legal first names for “know-your-customer,” security purposes. While expanding this policy is not a huge technological challenge (it essentially adds an additional data field and requires training for staff, according to one expert), it is still not widespread practice among financial services institutions.  

“This is one more way for us to help our customers to be their most authentic selves when banking with Citi,” head of US retail banking Craig Vallorano said in a statement to Insights Distilled. 

Meanwhile, a spate of neobanks is using True Name capabilities and other features to set themselves apart by appealing to LGBTQ customers. 

AI-powered digital assistants can reduce call center volume and boost customer satisfaction by answering questions about routing numbers, balances, credit scores, bills, and more.  

Using chatbots to handle routine customer questions or guide users through new product sign-ups has become an increasingly common way for financial institutions to save resources and answer questions quickly or outside of business hours.   

In the past six months, BankSouth’s Kasisto-powered smart assistant, Rita, has spurred a 30% reduction in call center call volume and boasts a 96% containment rate (which means that customers are almost always getting their questions answered without needing to speak to a human). BankSouth director of marketing and digital banking, Neil Hediger, estimates that having Rita answer questions that would otherwise have been made via phone call during business hours have saved the bank more than $20,000 so far this year. 

Kasisto also counts JPMorgan Chase, Standard Chartered, and TD as customers. Meanwhile, US Bank, Ally, and Santander rely on Personetics while Bank of the West, BNP Paribas, and Deutsche Bank use Glia (an Insight Partner’s portfolio company).   

One of the biggest challenges to achieving AI and machine learning goals is securely storing and managing huge quantities of sensitive data, so tools to simplify the process are a must-have.

Truist has purchased key strategic assets from data technology firm Zaloni to accelerate its data governance, metadata management, advanced analytics, and its AI/ML programs. The $545 billion-asset bank will use Zaloni’s technology to launch new, personalized services more quickly.  

“In short, this acquisition of key strategic assets allows us to see more, know more, and do more,” Truist chief data officer Tracy Daniels told BankingDive. Without sophisticated management tools, data will remain an under-utilized goldmine asset for banks.  

A team of 20 Zaloni workers, including chief product officer Ben Sharma and CTO Ashwin Nayak, will join Truist as part of the acquisition; neither company disclosed financial terms of the deal.  

In the past week, five major Canadian banks gave their quarterly peek behind the curtain. Their Q3 reports and analyst calls highlight how tech improvements are helping them score new business or increase customer satisfaction, and how it’s crucial to divide tech spend between “running the bank” and “changing the bank”:

$1.4 trillion-asset TD Bank increased its tech and equipment spend 12% year-over-year to ~$360 million and highlighted a new AI-based phone system for its insurance business that matches clients with the right advisors to help it speed up and improve its customer service, as well as.  

$1.3 billion-asset Royal Bank of Canada reported 8.3 million active digital users during Q3, a 5% YoY increase, and reported that NOMI, its AI-backed digital assistant that analyzes customers’ spending habits, has delivered 2.8 billion insights to clients so far. 

$999 billion-asset Scotiabank added 150,000 new members to its rewards program, Scene+, which allows members to earn points by using its mobile app to make purchases. It also launched Scotia TranXact, a real-time payments service for business clients, in Q3.  

$693 billion-asset Canadian Imperial Bank of Commerce reported 6.2 million active digital banking users, a 41% year-over-year increase. It also highlighted how it will continue its investments in digitization, cloud-based technology, and increasing data connectivity across businesses.  

$387 billion-asset National Bank of Canada increased its technology spend to $103 million, including “projects to enhance client experience and acquisition,” as well as invest in “systems, processes, and cybersecurity.” 

Bank of Montreal reports later on Tuesday.  

As know-your-customer (KYC) and know-your-business (KYB) regulations tighten globally in response to a rise in financial crime, digital identity platforms can remove the pain and cost of compliance.

Standard Chartered just joined HSBC in investing in Chekk, a KYC, KYB, and data-management platform that boasts an exhaustive dataset and easy integration.

Standard Chartered is using Chekk for, among other things, real-time risk assessment and anti-money laundering and identity verification for individuals and businesses’ related parties (like directors or ultimate beneficiary owners), a spokesperson told Insights Distilled. It has led to a 30-to-50% reduction in compliance costs for its venture unit, she said. “While several companies claim to optimize customer onboarding in banking, none comes close to them,” the head of Standard Chartered Ventures, Alex Manson, said of Chekk.

Discover joins a handful of banks that have launched designated office spaces meant to juice creativity, agility, and ambitious projects as competition for technologists remains fierce. Notably, Discover said it will support hybrid work for employees in the new center.

“Recruiting top data analysts and technologists is especially competitive these days,” said Discover emerging talent director Simon Kho, as the $114.6 billion-asset bank announced a new Advanced Analytics Resource Center.

The first cohort in the new space and rotation program will include 75 employees, and Discover hopes to add another 75 to 100 in 2023. Discover’s not alone in its strategy to lure talent:

Royal Bank of Canada opened its own innovation hub in Calgary last September (and is currently looking to more than triple its workforce there to 300 by the end of next year), TD Bank just launched a new tech research center in Philadelphia, called Workshop, and Truist credits the innovation center it opened in June with spurring the optimizing the launch of its new automated investment tools.

SWIFT mines its vast data flows to detect and flag the most common cause of cross-border payment delays: Errors in payee information. This capability is made possible thanks to SWIFT’s near-ubiquity as a bank-to-bank messaging platform, underscoring the benefits of analyzing massive datasets.

In its quest to enable real-time international payments, SWIFT has launched a new predictive data intelligence tool that checks impending payments against historical records and prompts customers to fix potential errors or typos before processing begins. The centralized verification system will draw on aggregated and anonymized data from the 9 billion transaction messages between 4 billion accounts that it processes each year.

“Friction in the payments system costs the industry more than $2 billion every year, affecting over 700 million transactions,” a SWIFT spokesperson told Insights Distilled, blaming the kind of typos and formatting errors that would now be flagged.

Representatives from HSBC, Standard Chartered, Commonwealth Bank of Australia, Mexico’s Banca Mifel, and Turkey’s Yapi Kredi Bank have already praised the new capability: It will bring “real cost-savings and efficiency gains,” according to Banca Mifel’s Arturo Rivera Fermoso, while HSBC’s Vijay Lulla said it was “an important step in removing friction from cross-border payments.”

As investment in blockchain, Web3, and crypto startups is surging, banks have one key advantage over smaller, more nimble firms, according to JPMorgan’s top crypto exec: Trust.

JPMorgan is investing heavily in a wide range of blockchain projects – including tokenized stocks and bonds, a payment-information network, and its digital JPM Coin, which is currently handling about $1 billion in transfers a day.

While that’s a tiny amount compared to its total volume, it still complies with regulations like sanctions screening, anti-money laundering, and know-your-customer: “When we are doing that $1 billion, we are complying with all the rules that the $10 trillion complies with, and so all of our regulators across the world are satisfied with the approach,” Umar Farooq said during a panel hosted by the Monetary Authority of Singapore in the last week of August, adding that big banks ultimately have much more customer trust than their startup competitors.

While Farooq is obviously biased, his comments do come at a time of weakened consumer trust in crypto, as token prices have tanked, multiple bankruptcies have screwed small-scale investors, and hackers have stolen billions of dollars.

Separately, two JPMorgan execs with backgrounds outside traditional finance, recently appeared in a company YouTube video espousing the benefits of working there instead of a fintech: “ You get to work in kind of the inner guts of how the financial system works versus kind of scratching the surface and focusing only on the user experience.”

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 recently raised a $600 million Series F round of funding.

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

Younger consumers crave charitable giving – but are often light on funds – so offering easy ways to donate can be a competitive differentiator for financial services firms.

American Express just launched a new pilot to let its users round up their purchases to the nearest $1, $5, or $10 and contribute the extra funds to charities of their choice. Millennials and GenZ are the fastest-growing cohort of Amex customers, the firm said, and its recent market research found that a majority wanted to increase their charitable giving.  

The new features are possible through a partnership with Philanthropi, which Amex invested in through its corporate venture arm. While tech firms like RoundUp and GiveTide offer similar services for tagging donations onto purchases, Amex’s partnership with Philanthropi also allows users to sign up for donor-advised funds (DAFs), which typically have costs or minimums that are prohibitive to small donors.  

By offering DAFs, the “platform lets anyone be a philanthropist,” an Amex spokesperson told Insights Distilled, and makes giving “an activity that is part of our daily lives, rather than a series of infrequent occurrences.” 

Other platforms trying to rethink charitable giving have won the attention of big financial firms, too: Wells Fargo invested in Amicus (which was acquired by fintech TIFIN) while Mastercard has partnered with Benevity.