When is BigTech too Big? Ant Group may have the answer to that.

After anticipating its IPO and setting share prices in late October, the China-based tech giant’s plans were put on hold when Chinese regulators suspended the IPO.

At $34.5 billion, Ant’s IPO would have been the largest public offering to-date, surpassing the previous highest IPO set when oil company Saudi Aramco went public at $29.4 billion earlier this year.

So what is China’s qualm with a successful tech giant going public? The answer may lie in fintech’s favorite four-letter word: data. That’s because big fintechs such as Ant rely on data traditionally held by the Chinese government such as salary and debt levels to provide lending or credit services. Overall, the communist party is worried about losing centralized control by giving a large tech company control over valuable data.

Some also speculate that the suspended IPO was directed at Jack Ma, Ant Group’s controlling shareholder and founder of tech giant Alibaba, as a way to humble him. Just before the IPO was suspended, Ma had given a speech at a conference in which he criticized regulators and Chinese banks.

“What happened to Ant reinforces that sense that it’s really essential to show respect for party-state authority,” said Kellee S. Tsai, the dean of the School of Humanities and Social Science at the Hong Kong University of Science and Technology told the New York Times. “Capitalists have to play by the political rules of the game.”

It’s a stark contrast to the scene in the U.S., where the economy relies so heavily on large companies in key industries that the government is willing to shell out millions to bail them out. In either situation, however, Ant Group’s recent predicament has taught us that it’s important to remember who’s boss.

Photo by Kai Pilger on Unsplash

I’ve been busy catching up on all of the discussions that took place at FinovateFall last week (if you are on our attendee list, you can do the same), and a panel conversation on AI and bots stood out to me.

Leading the panel was Emmett Higdon, Director of Digital Banking at Javelin Strategy & Research, who shared the following graph:

Higdon explained that because branches were closed and call centers were overwhelmed, banks were pushing consumers to solve their issue or receive an answer to their question via digital channels. While this worked for some consumers, it frustrated others who were less digitally native or needed a more customized answer. To mitigate frustration, some banks turned to chatbots to create a hybridized approach that offered a high-tech, low-touch customer service experience.

Given the data from Higdon’s graph, it is apparent that some firms’ bots failed– they were ill equipped to handle the influx into their digital channels. Others, however, leveraged data, as well as their prior experience with their digital channels, to create a digital banking experience tailored to each customer.

Mallika Daswani VP of Digital Channels-Online and Mobile Banking at TD Bank said her firm leveraged the bank’s virtual assistant in the company’s mobile app. This tool could answer simple queries and alleviate burden from the call center, which was then able to focus on high-value activity such as conducting video calls with customers. This combination of assisted service and full service helped meet customer needs at scale.

Alexandra Mack, Solutions & Customer Marketing at Zendesk, noted that sending proactive messages to consumers can be crucial during this time. However, she noted it is important to avoid blasting a customer base with intrusive, ubiquitous messaging. Financial services companies can leverage AI to analyze customer information and direct them to self-service solutions.

The group also discussed improvements, specifically, meeting customer expectations and implementing sentiment analysis. The customer expects that the bank not only knows information about the customer, but also has details about the customer’s previous interactions, even if it occurred with a bot or in a different channel. Additionally, implementing sentiment analysis, which uses AI to sense consumer frustration and route them to the appropriate person to mitigate frustration, can vastly improve the customer experience.

When discussing customer communications and personal information, it’s impossible to leave data security out of the conversation. It can be difficult to protect consumer information (and remain compliant) when consumers switch channels or move from website-to-website. However, frustration can arise when consumers are required to authenticate multiple times. To eliminate this, banks can use voice biometrics in the background to create more efficient re-authentication and reduce wait times.

Automation can solve problems, but it takes effort to get to that point. It not requires applying new technologies but also implementing consumer data. In the end, a hybridized digital offering requires a multi-pronged approach with the entire bank on board.

Photo by Ashkan Forouzani on Unsplash

For better or for worse, modern society has adapted to expect things instantly. We want a quick lunch delivery, a fast Uber pick-up, and we expect Netflix to buffer our movies in microseconds. Even Amazon’s two-day shipping takes too long.

Recognizing the value of the real-time economy, Orum launched its flagship product, Foresight, last week. The new tool helps banks move money in real time for instant account funding, overdraft protection, and consumer-focused pre-delinquency tools.

Instead of leveraging the blockchain for real-time transfers like Ripple does, however, Orum takes a different route. The startup uses AI to predict the availability of funds within an account and pre-authorizes transactions, incurring limited risk.

“At Orum, we are creating a paradigm shift for the way money moves,” said Orum founder and CEO Stephany Kirkpatrick. “We are leaving behind siloed accounts and manual transactions and building toward fully automated and point-to-point money movement. Technology has created an on-demand economy, but our money has yet to catch up.”

In addition to Kirkpatrick, Orum’s team includes former N26 employee Ryan Cooke and former Stash VP Christine Hurtubise.

Along with Orum’s new product announcement, the New York-based company landed $5.2 million in Seed funding led by Homebrew with contributions from Inspired Capital, Acrew, Bain, Clocktower, Box Group, and angel investors. Impressively, the round was both opened and closed during a pandemic.

“Today’s tools for immediate money movement leave enterprises decades behind what customers demand. Orum is tackling this challenge head on,” said Homebrew Partner Satya Patel. “We’re excited about Orum’s vision. The early demand they’ve seen—both from cutting-edge fintechs and incumbent financial institutions—speaks for itself. It’s clear the market understands the value of moving money in a new, more efficient way.”

According to Crunchbase, Orum is already working with 50 customers and has a waiting list.

The incumbents in the real-time payment (RTP) space in the U.S. have seen some traction, however none have seen widespread adoption. Aside from Ripple, other players working on RTP solutions include The Clearing House, which launched its RTP scheme in 2017 and now counts 32 banks and 19 technology providers as clients. According to Forbes, however, fewer than half of these members are operational on the RTP platform.

The U.S. Federal Reserve is also in on the game, having announced its own RTP scheme, FedNow, last year. Since its announcement, there has been much debate within the fintech industry over whether or not the government can effectively compete with the private sector with real time payments. However, given the lack of traction in the area, the Federal Reserve ultimately decided to pursue FedNow. In true government fashion, however, the offering is not slated to launch until 2023 or 2024.

Remember how society expects everything to happen instantly? The slow traction of incumbent players in the RTP space isn’t meeting expectations. That said, there is a lot of room for Orum in the RTP space and I think we’ll be hearing about a lot more traction from them in the second half of this year.

Photo by Volodymyr Hryshchenko on Unsplash

In some parts of the globe, cities are slowly relaxing their social distancing guidelines. Businesses are beginning to open up and residents are once again venturing out to offices and into storefronts.

Some tech companies have made the move to become remote-first, keeping employees out of physical offices for the foreseeable future. Banks, however, face regulatory scrutiny over communication and documentation, and can’t allow their employees to work from home as easily.

So as many begin to let their guard down, where do a bank’s responsibilities lie in regard to maintaining a safe, virus-free work environment and branch location?

As with everything, the buck stops with the banks’ leadership. They are responsible for not only heeding guidelines from their local and federal governments, but also for understanding concerns of their customers and employees. To answer the question in the title, no, banks don’t necessarily need a chief medical officer. They do, however, need to appoint a person or a group responsible for creating safety measures around their branch and workplace.

The first step in doing this (aside from abiding by governmental guidelines) is to listen to the concerns of customers and of employees. While some may be ready to show up to the office or branch with minimum precaution, others may request increased social distancing in the office and curbside services at the branch.

Listening to these concerns will offer a clearer picture of next steps and a timeline. Options include offering individual cubicles separated by plexiglass, monitoring employee temperatures, increasing cleaning frequency to once-a-day, limiting the number of employees in the office and rotating work-from-home schedules, limiting customer numbers in the branch, requiring face masks, increasing sick leave for employees, etc.

If a requirement such as taking temperatures at the door arises that no one on the team feels comfortable with, hire an outside medical specialist. And if all of the new protocols seem completely overwhelming, banks should consider bringing on a consultant to help with things like deep cleaning protocols, updated health and safety plans, and emergency response plans.

Would it hurt to hire a Chief Medical Officer? Certainly not. But by listening to employees and clients and applying some creativity, banks can come up with a workable solution that helps both employees and customers feel safe.

COVID-19 has brought many new challenges to daily life– from working from home requirements to new budgetary restraints and stock market volatility. Fortunately, it is in times of crisis when fintech solutions shine the brightest. In a pandemic-burdened world, companies across the fintech sector offer answers (and to some, a sense of peace) to those wrestling with today’s new set of problems.

Personal connection

Even though many financial services offices are still closed to outside visitors, fintech tools can help maintain personal connections without requiring face-to-face interaction. Some roboadvisor platforms, for example, connect users with a dedicated certified financial planner to make sure their accounts are on track and to help them plan for the future.

And when it comes to replicating in-branch conversations, some banks– including Bank of America– have introduced video ATMs to offer customers a way to meet with a teller while social distancing. As an extra bonus, the video technology is making tellers available for longer hours, from 7am to 10pm.

Increased visibility

Fintechs provide users access to their account information 24/7 via web and mobile interfaces. More importantly, however, are the integrated analytics and tools that many platforms offer to help users make decisions, answer questions, and offer scenario-planning to help them reach goals.

Keeping users well-informed about their current financial situation as well as their options can help empower them to plan for their future. This is crucial when many are struggling with the uncertainty of job security and stay-at-home orders.

Digital communication

Chatbots have gained popularity over the past couple of years, fueled by advances in AI technology. In the past few months, however, the need for chatbot and automated response technologies have accelerated. That’s because bank call centers have been overloaded with a spike in mortgage refinance request and calls from consumers who need help sorting out financial hardships. Banks are seeing increased value in chatbots, which help relieve pressure on call centers by offering a different channel for consumers to go to for answers.

Circumvention

Looking back, many fintech companies originated to help users work around a process or a service that just didn’t suit them. For example, there are a multitude of players that cater to unbanked and underbanked consumers, helping them work around requirements imposed by traditional financial institutions. Additionally, mortgagetech companies help banks process loan applications more efficiently by moving the entire process into the digital realm.

In a post-pandemic society we will see many new needs arise that aren’t well-served by traditional processes. Take the traditional, brick-and-mortar bank branch model, for example. Because branches have been forced to temporarily close their doors to customers, many have accelerated digital transformation efforts that make the majority of their services available online.

Digital identity

In a pre-pandemic world, digital identity verification was already a hot topic. Now that banks and fintechs are working with consumers almost exclusively online, there is an increased need for services that remotely authenticate users’ identities. Fortunately, there are a wide variety of instant identity verification offerings– from KYC and AML tools to blockchain-based identity networks– available to help banks and fintechs better serve their remote clients.