3 Takeaways From Day 1 Of Finovate Fall 2019

What’s new and notable at one of the country’s premier financial innovation event.

Since 2007, more than 2,300 fintechs have taken to the Finovate stage to showcase their innovations, live. Companies are given seven minutes on stage to demo their products no slideshows allowed and impress an audience of bankers, venture capitalists, and writers, among other influencers. To wit, Shark Tank‘s Kevin O’Leary made an unannounced guest appearance on the stage.

This year, 75 companies are expected to present at the four-day event at the New York Marriott Marquis. Some presenters are returning to the Finovate stage to introduce new functionalities; others, like the CEO of Zogo Finance, a mobile-first financial literacy solution (more on him below), were still in high school just a few years ago.

Here are three takeaways from Monday, the first day of the event:

No. 1: Is Financial Literacy A Pay-To-Play Field?

As credit unions increasingly build their business models around improving member financial health and wellness, some third parties are rethinking the effectiveness of these teachings.

Bolun Li, the CEO and founder of Zogo Finance, was a senior in high school three years ago. That year, he and his classmates attended a financial literacy class sponsored and run by a bank and given, in Li’s estimation, by an engaging speaker. None of the kids paid him any attention, of course, and it got Li to thinking about financial literacy.

Banks and credit unions spend millions of dollars each year on financial literacy initiatives across the country. But is that money well spent? If Li’s story is any indication, the answer may be no. If the answer is no, what’s the best way to spend that money? Well, why not pay the kids?

Zogo is a financial literacy app that looks and functions like the language learning app, Duolingo. It’s white labeled to its partner financial institution and comes complete with some 300 bite-sized learning modules on a variety of different topics, starting with budgeting but growing more complex as teenagers advance through the app. Modules are all created by Duke University professors and students.

Users start each module by learning five concepts before taking a five-question quiz. Completing each module earns users points (which, because this is aimed at teenagers, are pineapples). Accumulate enough points and users win a $5 gift card to the store of their choice.

Zogo was not the only presenting company to showcase a financial literacy solution that pays users, however. Later Monday, a company called Plinqit demonstrated its content platform.

Integrating with a bank or credit union’s mobile app, Plinqit’s build-skills platform analyzes user activity within the app and presents relevant financial education in the form of tips, videos, or articles. After the user views the content, he or she rates its relevance before taking a two-question quiz to grade knowledge retention. Once the quiz is complete, the user receives up to $1 deposited into their checking account.

No. 2: Data Security Is Top Of Mind

Today’s presentations were full of possibility: white-labeled solutions, open API opportunities, data aggregators promising increased engagement through better connections. Considering, for a moment, the amount of financial data and other personal information speeding across payments rails or state-of-the-art interfaces, one can’t help but wonder: But what if it goes wrong?

Two companies demonstrated solutions to this question, though from different angles.

ALTR, a data security company, presented its programmable security and governance tools. These tools can be integrated into third-party applications. In fact, the CIO of online banking provider Q2 joined ALTR onstage to discuss its partnership with the security platform.

ALTR believes that data is as valuable as money, and therefore the same controls are needed to secure it. In practice, this means having a view, a valve, and a vault.

  • View: The ability to audit what data employees and members are viewing, as well as the ability to control what can be edited or deleted.
  • Valve: An institution should have real-time data governance that can limit who has the ability to access what information. As the number of individuals who can access a given data set increases, so, too, does the risk.
  • Vault: Data should move securely between applications. In ALTR’s case, this involves tokenization.

While ALTR represents proactive data security, breaches do happen often despite an organization’s best efforts. When that happens, you’ll wish you had airbags.

At BreachRx, operating a financial institution without a crisis response plan is like driving a car without airbags. When the time comes, you’ll be glad it’s there to deploy instantly.

In the event of a cyber breach, timing is everything. As part of its demo, BreachRx showed the three ways its tool can help an institution in the event of a breach starting with speed.

Users simply input relevant information and the platform uses an algorithm to quickly generate a unique response plan, keying in on effects to regulations, controls, policies, and contracts. The platform also includes the ability to assign individual users tasks to complete, across teams, lessening the potential for communication siloes. In addition, the plan and assigned tasks are all stored in the platform; in the event of a future breach or compliance audit, a record exists that the affected institution can quickly pull from.

No. 3: Putting User Data To Work

Data is everywhere. And while security must remain at the center of new technologies that leverage user data to create experiences, it must create new experiences. If companies actively collect publicly available data, can’t they do something with it that benefits consumers?

One such company is Moengage, an intelligent consumer engagement platform. By analyzing user financial data, the company aims to send more relevant and targeted push, SMS, and email messages to consumers. For example, a credit union member who has visited a branch five times in a month and doesn’t have the mobile app is served a prompt to download or learn more; as another example, a credit union can send a push notification to a member who has just arrived at a major international airport to remind them to turn on foreign transactions.

Two companies, Wealth Conductor and Kindur, are applying data to benefit a specific segment of the population: baby boomers. By syncing retirement accounts, like IRAs, 401ks, and Social Security, among other accounts, these companies aim to smartly provide a retirement income based on age, pre-retirement income, and quality of life.

Later, Datanomers presented a solution to reduce attrition. Typically, banks and credit unions conduct surveys to understand consumer sentiment. But by the time those results are collected, the problem can’t be fixed. By acting proactively, financial institutions can identify at-risk customers early and save the relationship. To do that, Datanomers runs sentiment analysis on recorded chat calls and scores consumers based on their risk profile.

One of Monday’s last sessions was also one of its most interesting. Japanese company NTT Data has introduced its Guardian feature to pair with its AI application, Mirror. Mirror connects with a user’s social media accounts and financial accounts to learn more about preferences and long-term wants and needs of an individual. In addition, Mirror includes a conversational chat feature that’s designed to ask more specific, personal questions of users; the more information a user provides to Mirror, the more it knows. That’s where Guardian comes in. If a user should become unable to make decisions on his or her own behalf, the AI if it’s been well trained can step in.

While credit unions may not find that last example relevant today, or into the future, the larger point still holds: data is a powerful tool, and it should be used to make the lives of its owners better.


September 24, 2019

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