3 Takeaways From Finovate – Day 1

What’s new and next at the country’s premier financial innovation event.

Amid the presentations and live demonstrations there was, of course, bingo.

At Finovate, banks, credit unions, and financial technology companies come together to view the best and brightest in financial innovation. The set up? Companies are given seven minutes on stage to live demo their products (no slideshows allowed) in front of the assembled masses. The event itself is a barometer illustrating what’s next, or at least what’s coming, and Finovate Fall 2016 was no different.

In fact, a day before the event Sam Maule, financial technology speaker and podcaster, tweeted a bingo card to set expectations for the event Thursday and Friday in the New York Hilton Midtown.


Sadly, after the first day the PokemonGOspace remains empty.

The card was remarkably prescient. Presenters hit on many of these topics during the course of the conference’s first day (we even hit a few bingos). But products and ideas weren’t just limited to these topics. Here are three additional takeaways from the first day of Finovate at its 10th anniversary.

No. 1: Predictive Analytics Is The New Big Data

Big data is so five years ago.

Yes, this volume of data can provide large amounts of information that financial services professionals can use to make informed decisions. Essentially basing future performance on past performance. But what if powerful algorithms could reliably predict future outcomes, saving institutions time, money, and resources?

QEData, a Toronto-based startup, specializes in predictive analytics and machine learning solutions. Using as little as two years of historical data, the company believes it can predict the cash flow behavior of a small business with, reliably, 80% accuracy though it aims to hit 90% or greater.

The platform works by drilling down into incomes and outflows of cash; seeing the business’s obligations, to whom, and on what payment schedule, as well as who owes the business money, how much, and on what repayment schedule. Anomalies in income and outflow are compared against otherwise dominant patterns in behavior to create these predictions.

But just because predictive analytics are in doesn’t mean that big data is dead. Several companies presented products leveraging huge databases to provide users greater insight.

MapD showed how the power of graphic processing units (GPUs) could deliver fast SQL and data analytics by sifting through 1.2 billion rows of New York City taxi pick up and drop off locations, the price of the rides, and at what times these rides took place.

Later, TransUnion pitched a product called Prama, a platform that leveraged the credit bureau’s 350 billion-row database to benchmark credit score and delinquency data from customers across major products such as mortgages, auto loans, and credit cards, and allowing users to drill down as deep as the state-level.

No. 2: Biometrics Are All About Choice

Daon is the Gaelic word for human being, but it’s also the name of the company that USAA has partnered with to offer its biometric authentication.

During his seven-minute presentation, Conor White, the company’s president of the Americas, live demoed his company’s several biometric logins into his actual USAA checking account.

So you can see how poor I am, White said.

He said that 2 million USAA mobile banking users have signed up for its facial recognition login option. But that’s not all Daon offers. USAA mobile app users also have the ability to log in through fingerprint scan or voice authentication a triumvirate of options. That’s a customer-friendly solution.

Happy customers get to make their own choices, White said.

No. 3: The Customer Experience Remains Front And Center

What does innovation mean? It’s perhaps the most important and misused word in America, according to Wired. But although it may be a difficult term to apply in business, the word provides strategic thinkers a familiar concept to which to aspire.

During the first day of Finovate, innovation applied most frequently to simplifying and improving the customer experience, something intimately related to the quality of product and service offerings.

Two companies that focused on financial institution product offerings were Sindeo and LendingFront. The former operates a mortgage marketplace with fully automated digital pre-qualification and more than 1,000 mortgage products from 45 lenders, while the latter offers a small business lending marketplace that automates underwriting and analyzes the health of the business using social, credit bureau, fraud, and cash flow data.

On the service side, presenting company Backbase provides a checking account that can be opened in less than 60 seconds, TokBox enables developers to embed video, voice, and shared content into financial institution mobile apps and online banking products, and the Personetics platform presents users with an automated analytical chat bot that learns user financial habit and preference and is able to provide financial insight and guidance.

After his presentation, Personetics CEO David Sonsa caught up with CreditUnions.com. According to Sonsa, the company is more focused on customer needs than a bank’s. His bot, called MoneyCube, sends, on average, two messages to users per week and he claims an open rate of approximately 50%. And like any effective relationship-building tool, this one looks to establish a relationship before providing advice.

We start by telling the user what they need to know in small bits of information to build trust, Sonsa says. When the bot recognizes higher levels of engagement we take that relationship to the next level.

More Finovate?

Check out our coverage of Finovate Day 2.

Read more

September 8, 2016

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