September 13

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.  

Instead of forming a designated innovation lab like many of its peers, Bank of America focuses on “citizen innovation,” which it credits with driving its patent supremacy: It says it has more US patents than any other financial services firm and has consistently broken its own quarterly records.

In total, Bank of America has 5,556 patents pending or granted from 6,500 inventors based in 43 states and 14 countries, across all eight lines of its business, it said.  

Bank of America’s patents aim to either solve for an immediate need or position the company to meet the future needs of its clients, a spokesperson told Insights Distilled. For example, a recently granted and currently in-use patent allows its clients to quickly provision a new card number to their digital wallet and identify transactions from the card during the authorization process. Its blockchain-related patents, meanwhile, largely aren’t engaged due to the regulatory uncertainty around banks and crypto. 

Historically, Bank of America’s patents have been cited more than 43,000 times (you can see a list of the its patent IDs here).  

Here’s the make-up of BofA’s patents in the first half of 2022 and overall: 

Data via Bank of America. Charts via Insights Distilled.

As financial regulators increase their scrutiny (and fines), regtech tools can help firms keep themselves compliant at a lower cost.

As US regulators hammer the likes of JPMorgan, Citigroup, and Bank of America with a combined $1 billion in fines for failing to properly monitor all employee messaging, comprehensive communications-surveillance tools are in high demand. That’s part of the reason that London-based SteelEye just raised $21 million, with participation from Fidelity International’s venture arm.  

Fidelity International currently uses SteelEye for communications and trade surveillance, while Fidelity Clearing Canada is working on a proof-of-concept to implement the tech for trade surveillance, FISV’s James Devlin told Insights Distilled. 

SteelEye’s surveillance platforms give Fidelity a holistic view that would previously have required several disparate systems and, according to FISV, “helps Fidelity connect the dots.” That single-lens approach means that users’ “data storage requirements are optimized and costs are kept as low as possible” while freeing up time otherwise spent managing multiple systems, vendors, and manual processes, according to SteelEye president of Americas, Brian Lynch.  

SteelEye says it has several other major financial services customers – and 50% of its inbound inquiries over the last six months have included a “secure messaging / WhatsApp component,” Lynch told Insights Distilled  – while JPMorgan, UBS, and Jefferies use Movius for communications monitoring. 

As bad actors use realistic-looking fake websites to dupe customers into giving up their login credentials, financial institutions can protect their users by monitoring the places where criminals hang out for threats.

“In our cybersecurity unit, there is a whole command center where, at all times, there are people monitoring, even activities in the dark web. And we actually take down a lot of false sites,” the Singapore head of Asian financial giant DBS, Shee Tse Koon, told American Banker in a wide-ranging interview. When DBS finds “dark players out there” it will “counterattack” to remove them, he added.  

DBS isn’t the only big firm contending with fakers: A recent report from IronNet found that criminals were buying “phishing-as-a-service” kits on the dark web for as little as $50 a month to imitate the likes of Wells Fargo, and Citi – and had stolen at least $500,000 from victims.  

There are a host of tools that promise to help customers scan the dark web for these kinds of threats (and more), including ZeroFox, CyberSixGill, and Insight Partners’ portfolio company Recorded Future.  

You can read the rest of Tse Koon’s interview on American Banker. 

While big banks that process card payments for businesses have greater market share and bigger budgets than fintech upstarts, they’re slower to roll out new features and capabilities than rivals like Stripe and Block – and JPMorgan’s betting that an acquisition can kick its payments roadmap into overdrive. 

JPMorgan’s payments unit is acquiring cloud-native Renovite to help modernize its infrastructure and expand its merchant acquiring capabilities, the firm announced Monday.  

The head of retail banking at financial advisory firm Celent describes the purchase as an “interesting deal” that should benefit JPMorgan’s business: “The rapid growth of firms like Stripe, Adyen, and Worldpay indicates that merchant services is a highly competitive business where technology capabilities can truly differentiate the providers,” Zil Bareisis, told Insights Distilled. 

While JPMorgan still controls the majority of merchant services by transaction volume, it admitted at a recent conference that its merchant services business has stalled and that it wasn’t currently offering the same caliber of features as upstarts: 

“We don’t have the same breadth of value-added services as some of our fintech competitors, and changing that picture is a big story behind our investments,” global payments chief Takis Georgakopoulos said at an investor conference in May.  

JPMorgan ran trials with Renovite last fall but was so impressed with the technology and talent that it decided to buy the firm outright, global head of payments Mike Blandina told CNBC. Neither JPMorgan nor Renovite disclosed the terms of the deal.  

Meanwhile, JPMorgan’s payments division also just gained a new leader: Former Microsoft exec Tahreem Kampton joined the unit to lead co-innovation with partners in blockchain and digital payments.