November 8

Banks are realizing that by pairing automated rebalancing and algorithmic advice with phone advisor consults, they can win over younger, digital-savvy investors without a high price tag.

The likes of JPMorgan, Ally Financial, Truist, and Bank of America have all expanded from offering standard automated robo-advising to providing supplemental personal consultations with financial advisors. Clients can speak to an advisor via either phone or video, allowing banks to serve lower-net-worth clients than their advisory services typically reach. 

The shift gives banks a way to offer clients a more personal touch, at a lower price, which helps strengthen relationships and build trust.  

“This is a milestone for us and a way for us to serve a whole new set of clients,” JPMorgan’s CEO of US wealth management, Kristin Lemkau, said in the recent announcement of the bank’s personal advisors service.  

Each bank offers its own combination of investment minimums and fees to access its human advisory services, though all still clock in at lower prices than traditional financial advisors.  

“Robo advice is yesterday’s term,” said Javelin Strategy director William Trout told American Banker. “You need a human element.” 

Giving people access to digital tools that broaden access to investment strategies once reserved for the ultra-wealthy is a focus for both fintechs and legacy institutions. (Though that shifting emphasis between high-touch, prestige relationships and purely algorithmic ones recently sparked tension at UBS.) 

Banks have a golden opportunity to provide more personalized advice to small businesses that currently feel underserved.  

Banks have an opportunity to step up their services for small business customers, according to a new report from JD Power.   

“Small business owners are staring down an increasingly ominous set of challenges” and are “looking to their banks for guidance on things like available credit, tips to reduce fees, and technology that can benefit their businesses,” according to JD Power director Paul McAdam.  

“SMBs want technology partners that help their business grow or reduce expenses,” he told Insights Distilled. Banks should offer both digital tools and priority numbers that give clients the ability to speak with a real human on the phone.  

While banks have recently launched a slew of new products aimed at small businesses – for example, US Bank just added a new tool to help SMBs predict their future cash flow, while Barclays is hastening its cash advances – there’s still more to be done, McAdam said.  

Clients want “to receive tips to help improve their business’ financial situation,” he added, as well as “practical advice on ways to avoid and reduce banking fees.” 

Using artificial intelligence for underwriting and risk mitigation helps insurance providers be more efficient and proactive – which is especially important for cyber-related policies, as ransomware payouts top $1.2 billion. 

Leading insurance firm Travelers is partnering with artificial intelligence-driven provider Corvus Insurance, an Insight Partners’ portfolio company, to bring cyber-related products and services to Europe, the two companies just announced.   

Corvus uses machine learning to gather and analyze a proprietary dataset that helps it quantify cyber risks and deliver optimal pricing and coverage quotes within minutes. Its scanning tool also provides ongoing threat monitoring and alerts, which is particularly important as attacks – including ransomware threats – are on the rise.  

“Travelers will find that Corvus’s alerting leads to faster responses and remediation against zero-day vulnerabilities,” Corvus’ chief insurance officer, Lori Bailey, told Insights Distilled. “In fact, the Corvus team often hears from its policyholders that responses are significantly faster than their dedicated cybersecurity vendors.” 

Travelers will also have access to a Corvus platform that aggregates risk data and mitigation best practices. 

“Commercial insurance is in the early stages of embracing data science and AI to better distribute and underwrite policies,” according to Insight Partners’ managing director Deven Parekh, and Corvus’ technology allows it to improve underwriting, the broker and client experience, and loss prevention. 

While checks may seem archaic, they’re still widely used for payments like class action settlements, refunds, or investment disbursements (at least in America). It’s more efficient and environmentally friendly to use other modern payments methods, but the behind-the-scenes orchestration presents challenges for incumbents. 

BNY Mellon just launched a new payment platform called Vaia – in partnership with fintech Verituity – to help its clients move away from paper checks in favor of real-time payments options. Offering a range of payment choices has “historically been time and cost prohibitive” for businesses, but Vaia “is doing the heavy lifting,” a spokesperson told Insights Distilled. 

Verituity helps verify the identities of the payer and payee, as well as the chosen payments method (including Zelle, same-day ACH, and, eventually, PayPal or Venmo), so that BNY Mellon can help clients execute more flexible payments.

Verituity first started working with BNY Mellon through its accelerator program earlier this year and it lets BNY Mellon “take a zero-trust approach to payment verification, establishing that validation step quickly enough so that it merges seamlessly with the transaction,” the spokesperson said.  

BNY Mellon currently processes more than 300 million check payments per year and it’s not the only large bank working to cut down on that old-school modality: JPMorgan is piloting a new platform to help eliminate the need for rental checks. 

Data governance platforms help financial institutions wrangle and understand their vast swathes of data while maintaining regulatory compliance, ultimately allowing them to compete with digital upstarts by delivering enhanced customer experiences more quickly.  

Data scientists, analysts, and engineers at $207 billion-asset Fifth Third use collaborative data platform Alation to understand and take advantage of all the bank’s data, ensuring that the right people have access to the right information at the right time.  

Alation’s technology – which combines machine learning and human input to label, organize, govern, and share data – helps massive organizations like Fifth Third save time and money (Forrester estimates that the platform can save customers 211 workdays by auto-classifying data and $2.7 million in productivity improvements). 

To compete with “digitally born, direct-to-consumer” neobanks, legacy financial institutions need to optimize their data use “to gain efficiency and better understand their customers,” Alation CTO John Willis told Insights Distilled. The platform can help incumbents launch new features, faster, he said.  

Alation just raised a $123 million Series E round, which included minority investments from HPE, Salesforce, Dell, and Insight portfolio company Databricks. Its competitors include Collibra (used by DNB Bank and Credit Suisse) and Ataccama (used by Aviva and Société Générale).