Since 2010 new companies and entrepreneurs in the financial services technology space have been competing to join to the FinTech Innovation Lab, a New York City-based startup incubator. The winning companies move to New York City for 12 weeks to accelerate their growth and product delivery at the lab, which is a joint program of the Partnership Fund for New York City, Accenture and a number of financial institutions operating in New York.
The program grants the startups access to meetings with senior financial services executives and fintech entrepreneurs, who help with mentoring, product feedback and networking.
“There is so much potential for today’s explosion in digital technology, and our program offers ways to build deeper customer relationships and find ways to grow. This way we can turn great ideas into viable innovations at a low cost,” Robert Gach, a global managing director at Accenture, said yesterday at a presentation introducing this year’s winners for the FinTech Innovation Lab.
[For More on Innovation in Banking: How to Self-Assess Your Bank's Innovation Capabilities]
The program had its first acquisition of one of its startups this year when InkTank, a 2013 winner, was acquired by open-source giant Red Hat for $175 million. This year the program received applications from 84 different companies. Six winners were selected from the applicants, including LMRKTS LLC, a portfolio compression tool for reducing counter-party risk. Here’s a look at the five other winners.
All photos are courtesy of Accenture.
Revolution Credit aims to bring gamification and predictive behavioral analytics into the credit decisioning process. If a bank looked at 1000 different customers with similar credit scores, Revolution Credit would be able to predict which ones will be more likely to repay, Zaydoon Munir, the company’s founder and CEO, said during yesterday’s presentation.
Traditional credit scoring can’t really predict future customer behavior. It just gives insight into a customer’s past, Munir pointed out. And credit scoring methods are useless when it comes to the millions of potential customers who don’t have any credit history. Often these customers get caught in a cycle of rejection because they don’t have the history to prove credit-worthiness, Munir added.
Revolution Credit solves this issue by “engaging the customer in [gamified] activities and extracting behavioral signals that indicate willingness to pay back,” Munir explained. This helps mitigate loan losses, while improving customer experience and acquisition, he said. Working with one lender, Revolution Credit helped reduce customer delinquency rates by 30%.
Standard Treasury calls itself the API banking company, its CEO and co-founder, Daniel Kimerling, said yesterday at the presentation. The company provides a white-label API platform that will help deliver better technology for banks as they continue to move towards a more digital environment, Kimerling explained.
“Banks need better technology to evolve their business models, which is what customers want,” he remarked.
A bank can take the APIs that Standard Treasury creates, and then offer to them to customers. This turns the bank into a core infrastructure provider for its most important corporate clients, creating deeper relationships and reducing the risk of churn, while also cutting the cost to service that customer, according to Kimerling.
Automated personal assistants are becoming more ubiquitous in mobile devices with the rise of Apple’s Siri. Kasisto offers a similar voice-command personal assistant for mobile banking apps.
“Innovation is slow right now in new products and services for mobile banking apps. Anything you can do in banking, you can do online today. But on average banks only support 17 features in their mobile apps… there’s a usability gap,” Zor Gorelov, CEO and co-founder of Kasisto, said yesterday.
This usability gap is the result of some basic challenges that banks face in mobile, like small screen size and multiple operating systems, that limit navigation and functionality. To circumvent those challenges, Kasisto, a spinoff from SRI, which created Siri, ditched a graphical interface in favor of voice commands for mobile banking services and transactions. Their solution leverages a speech engine and aritificial intelligence reasoning to understand user commands. Right now their solution can recognize 75 different commands, Gorelov said, such as paying a credit card bill or searching for past transactions in an account.
Pymetrics aims to help match the right hiring company with the right candidate through neuroscience evaluations. “Think of us as LinkedIn meets OKCupid,” Frida Polli, Pymetrics’ CEO joked.
Finding the right candidate for an open position is difficult for HR organizations because there is often too much available data on candidates, and little of it is very useful in predicting job performance, Polli remarked. Research shows that between 30-50% of new hires don’t work out in the first year of a job, leading to high churn and cost of turnover for many companies.
Pymetrics uses neuroscience games for assessment of candidates and leverages data science to create individual profiles for those candidates. It also creates profiles of companies looking to hire, and then matches them with the best candidates. It currently has 25,000 users, and at one company helped reduce turnover by 20% while doubling the yield of its interview process, saving the company $440,000.
Public data remains one of the most difficult sources of data for companies to make use of because it is stored and siloed in so many different places, Craig Denton, the head of business development at Enigma said yesterday. Enigma has created an ingestion platform that uploads public data to the cloud, where it is sorted and documented, and offers APIs that allows customers to go online and easily search public records.
The company has developed three APIs specifically for financial services companies. The first allows users to verify information for underwriting purposes. For example, when looking at underwriting a shipment, an underwriter could search through Enigma’s data sets to find public data about the shipping company to verify simple things like the company’s address so it can be more confident about underwriting that shipment.
The second API allows financial services companies to prospect for potential clients. For instance, Enigma can pull up all of a company’s government contracts or information about its benefits plans.
The last one helps companies research real estate holdings for insurance purposes. The API allows users to measure building occupancy, by, say, looking up past water usage.
Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio