May 31

Financial firms have begun testing how they can use generative AI for wealth management, engineering, document analysis, and personalized advice.  

Generative artificial intelligence – AI trained on enormous datasets that can create new content resembling human output – is set to disrupt financial services as we know it.  

“There’s a mad scramble right now to figure this out,” the CEO of Evident AI, Alexandra Mousavizadeh, told Insights Distilled, including pressure from board members and top executives.  

As part of this process, FinServs are crafting experiments to help build out their strategies and roadmaps. Our latest Insights Distilled report explores these uses cases and how they’re being deployed by your peers and competitors, including for wealth management advice and document analysis. 

For our analysis and expert advice, download the exclusive report here.  

AI is helping banks supercharge their ability to detect financial crime, adding context to sanctions lists, cutting down on false flags, and speeding up investigations.

Artificial intelligence is bringing more context to compliance, according to Ryan Schmiedl, chief data officer and head of trust and safety for JPMorgan’s payments division.  

“With the innovation going on with large language models, there’s a lot of opportunity in the financial crime space,” he said on stage during the Finovate conference in San Francisco. He gave an example of how LLMs could help algorithms better understand the context of a sanctions list:  

“With sanctions, most of the time you get a list with very little context to what you’re looking for other than a name, or vessel number, or particular company. And so you’re searching through a bunch of unstructured text,” he said. “In the old systems, if vessel number 138 was flagged, guess what? Every time you had ‘138 Main Street’ in the data, it’s a hit, right?” The latest algorithms can use context to parse out what’s actually meaningful and cut away “a lot of unnecessary friction” and false flags, Schmiedl said.  

Ultimately, the goal is to use AI to catch more fraud, faster: “There’s value in offloading very manual, repetitive tasks that don’t require a lot of human IQ, that have a basically consistent pattern,” he said. “We’re laser-focused on capture rate and precision: We want to capture a larger percentage of these malicious events, with better accuracy and fewer false positives.” 

Insights Distilled has previously covered the various ways that FinServs are using artificial intelligence to fight fraud, including through better know-your-customer checks and more comprehensive investigation reporting.   

Incumbent banks and fintechs alike want to understand how their features and experiences stack up against those of their competitors; this platform gives them a real-world look at all the digital tools on the market.  

Fintech Insights is winning customers by letting them compare every single one of their digital features to those of their competitors – and see what experiences they’re missing.  

The idea is simple: The company’s platform includes details about (and videos of) over 500,000 different “user journeys” – from onboarding to fund transfers – from hundreds of digital banks and incumbents. Customers can search the site by company or product to see all the features and functionality that their competitors offer. 

Traditionally, banks have only conducted benchmarking or gap analysis a few times a year, Fintech Insights executive Nickolas Belesis told Insights Distilled during the Finovate conference. But the platform allows them to conduct competitive analysis on the fly, leading to better product road-mapping and testing. 

By giving banks a clear-eyed, comparative view of their user experiences, the platform is helping them up their game and deliver better products. The firm’s clients include UBS, Bank of America, Fifth Third Bank, Zelle, ING, and US Bank, whose exec called the platform “an invaluable resource for our product teams in prioritizing our product roadmap.” 

“The teams have more confidence that the design of new or improved features will be best-in-class,” VP William Calice told Insights Distilled, adding that users at the bank have described it as “a digi-superpower” and “the coolest tool” they’d deployed at work.  

Fintech Insights updates its feature logs and videos every week and is always adding new banks and fintechs to its libraries, Belesis said.  

“We’re the gold standard of digital banking,” he added. “Everything is up to date.” 

Nymbus just raised fresh funding for its mission to help banks replace their legacy tech stacks, as smaller institutions and credit unions fight to stay competitive. 

A technology provider for banks just raised a $70 million Series D in a funding round led by Insight Partners.  

Nymbus aims to help financial institutions seize the benefits of digital transformation, without needing vast in-house tech resources. Its cloud tools ultimately help banks and credit unions evolve their operations and stay competitive. 

“It’s not just about surviving in the current industry; it’s about thriving and transforming it for the better,” chief financial officer Frank McAnally told Insights Distilled. “This urgency is what makes Nymbus’ mission more vital now than ever before.” 

Before beginning their relationships, banks and fintechs should establish quantifiable success metrics and make sure they’re aligned for the long haul, according to BNY Mellon and JPMorgan execs. 

There’s no magic formula or one-size-fits-all approach to crafting successful relationships, but BNY Mellon and JPMorgan execs shared their perspectives on working with fintechs during a panel at the Finovate conference. 

Every partnership begins after the bank has defined a clear need and concluded that it makes sense to buy a solution versus build one in-house, both execs said. From there, the banks do extensive research to select the right potential partners.  

JPMorgan’s outreach to fintechs has been very focused lately: “We’re doing fewer, but more targeted proof-of-concepts,” said Dora Matheidesz, executive director of fintech strategy at JPMorgan. “We don’t want to do POCs just for the sake of POCs, or just testing ideas. It takes a lot of work and effort for both the banks and the startups to get a POC off the ground.”  

As a POC begins, “it’s really important to set a quantifiable metric of success upfront,” according to Zakie Twainy, head of digital partnerships and enterprise innovation at BNY Mellon. That way, both sides have a clear understanding of impact and whether goals are being met.  

It’s always a green flag when firms come prepared for the bank’s significant due diligence, she added: “By coming to that process prepared, a startup shows a maturity level that indicates that they’re ready to work with a bank. And that’s really important.” 

Figuring out whether a firm is poised for growth is crucial, Matheidesz agreed: ““We want partners that will be able to support us for years to come and that will be able to scale more broadly,” she said. “They need to have the resources, the right people, and a product roadmap that we can be a part of. It’s really important for a partner to present that long-term view.”