February 28

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. 

Writing your will isn’t typically an easy, cheap, or uplifting exercise, which could be why more than two-thirds of Americans have no estate plan. A handful of big FinServs are strategically funding a startup that wants to change that by making estate planning a more accessible aspect of financial management.

With the “great wealth transfer” upon us, there’s an increased need for simple, affordable estate planning.  

Accordingly, startup Trust & Will has wooed a whole host of financial services firms in its latest funding round. All told, the startup has raised $48 million from investors including Amex Ventures, Fifth Third Capital Holdings, Northwestern Mutual Future Ventures, AARP, UBS Next, and USAA. 

“Estate planning is an essential pillar of sound consumer financial wellness,” according to Amex Venture’s Margaret Lim. “Yet today, the process is complex, antiquated, and expensive.” 

That’s where Trust & Will comes in: It provides an easy and fast way to build and settle estate plans online.  

In addition to connecting with people directly, the firm has partnered with a handful of banks and credit unions to offer its services to their customers and Lim told TechCrunch that Amex is exploring ways to deepen its relationship with Trust & Will beyond its funding.   

Wells Fargo wants to boost engagement between its financial advisors and clients, in more convenient ways, to foster connection and loyalty.

Wells Fargo wants its wealth management clients and their advisors to stay more closely connected. 

The bank is rolling out LifeSync, a digital platform that lets users create and track financial goals while notifying advisors of changes and making it easy to interact or schedule conversations.  

“It gives clients a real-time platform to share information about what’s on their mind and send that to their advisor in-between more traditional monthly, quarterly or annual review meetings,” Michael Liersch, head of advice and planning for Wells Fargo wealth management, told Insights Distilled. 

For example, the app aggregates information so that people can track their portfolios, net worth, credit card reward balances, relevant news and content, and specific savings goals in a “hyper-personalized” way (including uploading personal photos tied to their aspirations). Advisors get pinged on updates and this additional “listening post” allows them to weigh in or update plans more dynamically.  

Ultimately, Wells Fargo wants LifeSync to increase client satisfaction, trust, and loyalty. Deposit growth would be helpful, too: It has 12,027 financial advisors assisting 2.6 million wealth management clients with $1.9 billion in assets, as of its last earnings report, but its total pot of clients assets has been stagnant since the end of 2019.  

LifeSync’s launch aligns with a similar trend around the shift away from robo-advising to a “true hybrid advice model” from likes of Truist, JPMorgan, and Ally Financial, where automated portfolio management is paired with phone or video consultations with advisors.

Open source software can bring a variety of benefits to financial institutions, including increased engineering speed and improved code quality, while helping attract tech workers. Discover expects its new site and partnerships to help it stand out in the space.

Discover just launched a new website dedicated to open source software development and building community in tech.  

“Like all organizations, we use a huge amount of open source in our products,” Discover’s VP of technology capabilities and innovation, Angel Diaz, told Insights Distilled. “It allows our technology folks to express themselves, to build on their skills, to partner with others, and to improve the technology that we use.” 

The public-facing Discover Technology Experience website is meant for knowledge sharing and inspiration and coincides with the firm joining the Linux Foundation and the Fintech Open Source Foundation (FINOS), and committing to sending its engineers to more than 50 events and meetups around the world this year.  

All these actions play into Discover’s plan to recruit and retain tech workers, who view open source contributions as a way to make an industry-wide impact, build community, and earn cachet. 

“You cannot hire a great engineer who doesn’t want to be learning and collaborating: If you’re not giving them an outlet to do that, you’re not going to be able to retain talent,” Diaz said. The site provides the “connective tissue” for “creating better conversations across the workforce,” he added, and will also help attract people to the firm.  

Generally, open source software continues to gain steam among big FinServs: A survey from FINOS late last year found that 20 financial institutions rolled out Open Source Program Offices in 2022 and that 56% of respondents said they got more value from open source last year than in the year before. 

Artificial intelligence can inject efficiency and increased success into outdated and shockingly ineffective know-your-customer and anti-money laundering processes. 

Mizuho International just picked a new partner to help it fight back against financial crime.  

The investment bank aims to improve its anti-money laundering efforts by working with SymphonyAI’s Sensa platform, which tracks changes in customer behavior, identifies risk hotspots, and flags fishy activity.  

Mizuho believes the platform will allow its financial crime team to “be empowered and more effective,” according to chief compliance officer for EMEA, Dinesh Joshi. For example, analysts can complete its risk review process in minutes, even for highly complex cases. 

SymphonyAI says its tools improve risk discovery and decrease false positives by more than 60%, which can save clients time and money. For example, it cites its platform as generating a 200% rise in risk discovery and a 500% increase in operational productivity, with $6 million in annual savings from recovered fraud dollars.  

Thanks to AI’s specialty in pattern matching and anomaly detection, a swathe of startups has emerged that use machine learning to fight fraud – including Chekk and Insight Partner’s portfolio company FeatureSpace. SymphonyAI’s Sensa also counts Citi among its customers.