The Banker’s Tech Projects Awards 2018 recognise the most innovative, imaginative and successful projects in financial technology from around the world. This year’s submissions were impressive examples of how the industry is responding to changing customer needs, as well as empowering staff to better serve customers.
Congratulations to all the winners in The Banker’s Tech Projects Awards 2018. Now in its 16th year, these awards recognise the most innovative, imaginative and successful projects in financial technology from around the world. This year’s submissions were impressive examples of how the industry is responding to changing customer needs, as well as empowering staff to better serve customers.
The Banker added a new category – fintech partnerships – to the Tech Projects Awards in 2018, recognising the role start-ups are playing in encouraging innovation across the industry. And the inspiring entries submitted to the inaugural category were testament to the fact that value is being derived from deeper collaboration between incumbents and the start-up community. Take note: the days of free proofs of concept are well and truly in the past.
This year, digital transformation was by far the most coveted award category, as banks continue to modernise their IT architectures to compete in a fast-moving and agile environment. This award attracted almost double the number of entries compared with the year previous, emphasising how deep digitalisation is penetrating inside the banks. Most financial institutions have come to the realisation that a truly digital business goes well beyond a snazzy front end and are now focused on transforming the whole organisation from front to back.
But digital transformation is not just about the technology – people are a critical component. This year’s category winner, Société Générale, emphasised the culture shift that it had orchestrated in the bank to create a more agile and creative organisation.
Mobile is the second most popular category and many banks are incorporating artificial intelligence (AI)-driven chatbots, or virtual assistants, into their mobile app to improve customer experience and attract the millennial generation to their mobile platform. Additionally, banks are putting great effort into extending the functionality of their mobile offerings, yet always with an intuitive interface, simplicity and security top of mind. Many included their customers in the development, design and testing of new features, ensuring an offering suited to them.
Another category that saw the number of entries almost double year on year is distributed ledger technology (DLT), commonly known as blockchain. More importantly, the majority of submissions illustrated real-life applications, which has led many to designate 2018 as a breakthrough year for the technology. This is a significant shift in the maturity of projects in previous years, which were mainly in experimentation phase. Interestingly, DLT is being applied to a variety of areas in financial services, from payments and trade finance to corporate actions and securities lending.
The judges
- Simon Bailey Finarchy
- David Bannister Ovum
- Dr Louise Beaumont Publicis.Sapient
- Oliver Bussmann Bussmann Advisory
- Jost Hoppermann Forrester Research
- Carmina Lees Accenture
- Liz Lumley VC Innovations and FinTECHTalents
- Joy Macknight The Banker
- Virginie O’Shea Aite Group
- Catherine Sherwin AlixPartners
- Chris Skinner the Finanser.com
- David Williams EY
An overarching trend coming to the fore – whether in AI and robotics, application programming interfaces, delivery channels, payments, social media or trading platforms – is the industry’s aspiration to provide “hyper-personalised, predictive and pre-emptive services”, as described by one of our judges, a trend that will only grow stronger as technology evolves. The judging panel is looking forward with anticipation to next year’s submissions.
The Banker would like to thank the judges for their time and tremendous work in judging the vast array of impressive projects – it was not an easy job and their commitment is worthy of a round of applause.
Winner: JPM Asset Management
Project name: Single View of Client
JPMorgan Asset Management (JPMAM) has outshone its rivals this year, picking up the data category award for its ‘Single View of the Client’ (SvC) project, as well as the overall global award.
The team finished in the top percentile in several categories, including artificial intelligence and robotics, digital transformation, risk management and trading platforms, demonstrating the institution’s prowess in technology.
Its data project is a case in point. Launched in March 2018, SvC is a scalable platform that delivers all client data in one view for the asset management sales and marketing functions. The platform uses a unique approach to data modelling to provide simplicity and flexibility, accelerating solution development and insights delivery. According to JPMAM, its key strength is its ability to answer complex business question in minutes, instead of weeks or months.
The scope of the project was ambitious, as it involved pulling together data from internal as well as external sources, in different formats, with various levels of granularity, into a client-centric view. It transforms how data is delivered and consumed within the business, allowing the replacement of thousands of lines of redundant code that required significant support and budget.
The key challenges JPMAM faced prior to SvC were: a lack of a single set of business rules and metrics; the existence of many redundant and duplicated data sources for client and transactional data; and high data maintenance costs due to numerous redundant processes. In addition, the lack of a single view of the client created a major challenge to building consistent reports, analytics and reconciliation.
“We wanted to provide our sales and marketing teams with an end-to-end consistent view of the client. We defined a single set of business rules and leveraged data science tools and techniques, such as machine learning and web scraping, to correct, supplement, organise and enrich the data we have across our organisation to create a scalable and repeatable customer relationship management data hygiene process,” says Mike Urciuoli, chief information officer at JPMorgan Asset & Wealth Management.
Today, JPMAM reports a 30% reduction in maintenance and support through consolidation and automation, an 80% improvement in data quality and reporting accuracy, as well as an 80% reduction in time spent on data validation and manual reconciliation. In addition, it has reduced manual data collection and integration by 50% and uncovered 40% more business opportunities from missing data sets.
Application programming interfaces
Winner: DBS
Project name: Making Banking Invisible via APIs
Partners: More than 80, including PropertyGuru, MSIG, AIG, SoCash, ActivPass, Homage and Circles.Life
DBS has picked up the highest honours in the application programming interfaces (APIs) category for its transformational ‘Making Banking Invisible via APIs’ project, further cementing its reputation as a digital leader. The Singapore bank launched its API developer platform in November 2017, and now has more than 200 APIs available to support business and customers’ needs, as well as over 80 live partners.
DBS collaborated with key ecosystem partners on this project, including established corporates such as PropertyGuru, Mitsui Sumitomo Insurance Group and AIG, and small fintechs such as SoCash, ActivPass, Homage and Circles.Life. The partners have integrated banking functionality into their web and mobile applications using DBS APIs to offer specific services to the bank’s customers, such redeeming DBS rewards points, making payments using PayLah! or funds transfers, and applying for home loans.
The whole project – from the discovery stage, which involved two hackathons for ecosystem partners’ developers to showcase solutions, through to partner go live and launch of the API developer platform – was completed in just one year. To date the bank has almost 1700 new registrations on its API portal and has compiled a list of the top 10 APIs within its developer sandbox.
DBS’s strategy was centred around customer journeys and which APIs would allow consumers to get their banking jobs done without having to leave the app or website they were on – what it calls an “invisible banking” approach. Its aim is to enable its customers to access banking services from anywhere within its ecosystems in a way that is intuitive and simple.
For example, a customer can perform a home affordability assessment while searching for a property on Property Guru. In addition, through the bank’s partnership with SoCash, a digital cash circulation company, DBS and POSB customers can instantly withdraw cash via a Singapore-wide network of participating retail shops without having to go to ATMs. This also saves retailers the hassle of depositing cash at a bank branch.
“Using these APIs, customers can instantly redeem DBS points for online purchases, withdraw money from selected shops such as 7-Eleven, apply for home loan approvals, and make seamless online payments through our partners’ apps. Each such use case not only provides convenience to our customers, but also increases their digital engagement and stickiness to our products,” says a DBS spokesperson.
Artificial intelligence and robotics
Winner: Nedbank
Project name: Extraordinary Life
Partners: WealthObjects, Enrian, Atura and DVT
Winning the accolade for best artificial intelligence and robotics project, Nedbank’s ‘Extraordinary Life’ is a robo-advice solution that instils clients with confidence about their future investment success. The bank has focused on a needs-based and customer-centred experience, combined with no administrative fees and low investment.
The thinking behind the project was to create the future of investment advice and saving in South Africa, offering the emerging middle and middle-to-upper class – which has historically been underserved – a much-improved investment user experience.
The automated savings platform uses a chatbot to collect information from the customer in a convenient and conversational way, and then provide automated application programming interface (API)-driven advice. The chatbot provides access to investment expertise and a digitised purchasing experience.
Launched in May 2018 following nine months of development, the platform relieves four major customer pain points when it comes to investing. First, it reduces the traditionally five- to 10-day paper processing time down to just 10 minutes. Second, it is a completely digital process, without paperwork or telephone calls.
Third, it reduces complexity for the customer by recommending the best investment and combination of products to maximise savings and tax optimisation, for example. Last, it provides transparency by providing costs and details throughout the investment journey.
“By using a familiar chat-based conversation-styled interface, APIs for advice and tax optimisation, and allowing clients to speak to a financial adviser for validation, our platform makes our clients’ investing experience simple, low cost and stress free. No forms or paperwork means super-fast account opening – and less bother for our clients,” says Iolanda Ruggiero, managing executive at Nedbank Wealth.
Nedbank brought together teams from four countries and embedded new ways of working into the bank by adopting the agile, squad methodology for its team design and structure to deliver a release to market quickly.
The platform has reduced the associated investment account opening costs by almost 90%, increasing the potential profitability of the new channel. Additionally, the project successfully piloted fully automated testing, reducing testing time and resources by 70% and enabling quicker deployment cycles for continuous enhancements and fixes.
The algorithms and robotic process automation alerts are expected to improve customer retention and maintain the course of the investment by an additional 6%, thereby improving the profitability of the platform’s portfolio.
Winner: HSBC Commercial Banking Technology
Project name: Online Know Your Customer
Partner: Avoka
Having up-to-date information is a critical weapon for all banks in the fight against fraud and preventing criminals from accessing the financial system. In the UK alone, businesses lose an estimated £14bn ($18.4bn) to fraud every year. But many customers find the know your customer (KYC) process laborious and time consuming, which leads to a deep level of dissatisfaction.
To solve this issue, HSBC implemented an ongoing programme to update and validate the information the UK-based bank holds on its business customers. Having a deep understanding of each customer – what they do, where they do it, who they do it with and who benefits – is a key part of the bank’s ability to detect and deter attempts to defraud that customer, launder money, breach sanctions or evade taxes.
In three months, using Avoka software and working alongside its team, HSBC developed an integrated web-based platform, called Online KYC (OKYC), which enabled pre-populated forms to be sent to customers for validation and adding in missing information. These forms are then returned to the bank for checking and, once confirmed correct, are transferred to the bank’s in-house KYC tool via a straight-through processing mechanism.
“For our business customers, we wanted to provide a simple, intuitive and efficient solution to enable them to provide us with customer due diligence information,” says Harsha Goodlad, global head of regulatory technology at HSBC. “Customers can access the OKYC tool through their existing business internet banking system, or via an online portal. This has enabled our customers to securely and rapidly review and update their details, dramatically reducing the effort and time needed to complete the process, which can now be accomplished in less than 30 minutes.”
OKYC is fully integrated with HSBC’s KYC system of record to eliminate re-keying. It streamlines and digitalises the existing KYC review process, while minimising the need for human intervention. And it applies to relationship-managed as well as portfolio-managed customers across a significant portion of the risk spectrum, which is 70% of the bank’s customer base by volume.
In addition to improving the customer experience and reducing the time it took to complete a case to 20 minutes, HSBC reports that complaint levels were low, at 0.04% of cases completed. In addition, the cost per review is less than 30% of a comparable case completed outside of the platform.
Winner: Sumitomo Mitsui Financial Group
Project name: Polarify – Biometric Authentication Platform as a Service
Partners: Daon and NTT Data
Sumitomo Mitsui Financial Group (SMFG) took a unique approach to solving the digital identity dilemma by creating a shared authentication infrastructure for Japan’s digital ecosystem, earning it The Banker’s cyber security award for 2018.
The bank, together with partners Daon, a biometrics authentication company, and NTT Data, an IT integration company, has received top marks for launching a joint venture called Polarify, a personal authentication platform business using multiple biometric elements, such as fingerprint, face and voice recognition, with palm pattern recognition to be added in the future.
Launched in May 2017, the joint venture will provide authentication not only for services provided by SMFG and NTT Data, but also for customers of other financial institutions and e-commerce companies, and internal user authentication for companies.
With Polarify, biometric data is transposed into irreversible sequences and stored/managed securely on smartphones. Users will no longer need to enter identities and passwords, nor go through the hassle of having forgotten passwords reissued. Via a personal authentication application, the biometric method can be freely selected as needed to seamlessly connect users with numerous service providers.
Service providers can use the platform as a means of accessing digital channels, reducing the number of customers abandoning their services after forgetting their passwords, cutting down the cost of reissuing passwords, and preventing impersonation and fraudulent access. The platform-style authentication service is more economical than for each service provider to roll out biometric authentication and has the potential to transform the digital ecosystem in Japan.
In July 2017, Polarify launched a biometric authentication service, built on Daon’s IdentityX platform, and in February 2018 the joint venture began providing a password management service. By the end of April 2018, three service providers were offering their services through the platform and more than 10 had applied to use Polarify as their authentication platform. In addition to the existing authentication service, the service providers are planning to develop new services, including online identity verification linking with the Japanese ‘My Number’ card and system.
In addition to developing and enhancing existing authentication and verification services, Polarify seeks to expand use cases beyond the e-commerce space and into physical store shopping, with links to smartphone payments. There are also plans in the pipeline to expand the service globally, following the roll out in Japan.
Winner: Citibanamex
Project name: Account Opening
Partners: Globant, IBM, Avoka, Kofax, BeSign and Morpho
The Mexican banking industry is undergoing a radical transformation, as incumbent institutions face greater competition from new fintech players entering the market. As such, improving customer experience is top of mind for domestic lenders. Citibanamex, for one, is rising to the challenge and has picked up this year’s delivery channels award for its ‘Account Opening’ project.
The project aims to provide a full omni-channel banking experience that allows clients and prospective clients to acquire financial products starting on any channel they choose and finishing where and when they prefer.
Whereas previously the sales process was branch-centric, now clients or prospects can simply take a photo of their identity and a ‘selfie’, followed by a short video conference. The bank identifies the customer and goes through know your customer (KYC) checks, using optical character recognition to extract the data.
Citibanamex has created a paperless process that validates in real time the completeness and accuracy of the information on the customer file. This ensures that no additional requests for information are made, nor will a product be suspended or cancelled when missing data or documents are detected.
In addition, all customers will leave the process being fully digital, having their certified mobile phone number configured to make use of all the bank’s digital solutions.
The project has enabled Citibanamex to change the way it sells products by obtaining and evaluating clients’ public data before offering specific products through its marketplace. As such, the bank has been able to shift from its current sales-focused process to a digital-enabled advisory flow that it expects will exponentially increase its customer satisfaction.
The Mexican lender is convinced that this improved onboarding experience will ensure that it provides what clients need and that it can change as those needs evolve. Moreover, the marketplace will be a critical tool to ensure that clients only acquire the right and best products for them. The bank expects to radically change the way customers perceive its sales process, making it not only customer friendly but also more trustworthy.
In future, the platform’s application programming interface-based architecture will allow easy integration with other technologies to continue improving the customer experience. The bank is already able to carry out proof of concepts for new solutions in a matter of hours, whereas it took weeks or even months on its legacy platforms.
Winner: Société Générale
Project name: Digital transformation
Digital transformation is the most coveted category of The Banker’s Tech Projects Awards. This year saw the number of submissions almost double 2017’s and it garnered double that of the next most popular award. This indicates just how serious banks are taking the re-invention of banking – and of themselves.
The accolade in 2018 goes to Société Générale (SG). The judges were impressed by the sheer depth and breadth of the French bank’s digital initiatives. For example, it has created a new data lake architecture, developed and exposed more than 1000 application programming interfaces (APIs) to clients, and is investing Ä650m over the next three years in security and data protection in the face of rising cybercrime. It is also focused on artificial intelligence and machine learning, virtual reality and blockchain applications.
For Alain Fischer, chief digital officer, global banking and investor solutions, at SG, the biggest achievement to date has been the creation of SG Markets, a single electronic platform of business-to-business services covering pre-trade, execution and post-trade services.
“We have brought all our tools together in a unique platform, which allows us to innovate quicker. SG Markets provides digital solutions for all markets, including financing, cash management and securities, which are personalised to meet client- and staff-specific needs and allow both sides to have control over trading and financing decisions,” he says.
SG’s strategy is as much about the people aspect of digital transformation as technology and the group implemented a new organisational structure in September 2017. “Led from the top management, the organisation is more agile and collaborative, and staff are encouraged to be creative and, at the same time, stay connected across all business and support units,” says Albert Loo, SG’s deputy head of sales for global markets.
Christophe Leblanc, group head of corporate resources and innovation at SG, agrees that the culture shift has been among the bank’s greatest achievements. “People are beginning to think differently and open up to new methodologies. We created an internal start-up challenge and also work with external start-ups,” he says. The bank’s open innovation platform connects a network of incubators spanning the globe, including Dakar, Bangalore and Bucharest, as well as Paris, London and New York.
SG continues to advance its open banking strategy and plans to share all the APIs in the group by 2020. It also plans to have 80% of its infrastructure in the cloud by 2020.
Winner: Credit Suisse
Project name: HQ DCR using DLT
Parties involved: HQLAx, ING, R3
Many hail the past 12 months as a crucial breakthrough period for blockchain, or distributed ledger technology (DLT), moving from hype to real-world applications. Credit Suisse’s HQ DCR using DLT project, delivered in partnership with fintech HQLAx, ING and DLT consortium R3, is a case in point and, unsurprisingly, has taken home the DLT award this year.
The Swiss bank looked to address the issue of high-quality liquid assets (HQLA), which are in strong demand due to increased regulatory liquidity requirements. To minimise the impact of sourcing and holding HQLA, the banking industry transforms the non-HQLA inventories on their books into HQLA through collateral swaps.
Therefore, this project’s main goal was to increase HQLA fluidity and mobility in the marketplace, as well as eliminate physical settlements and intraday credit through the simultaneous exchange of securities. “The platform provides market participants with an instantaneous view of immutable transactions, simplifies the end-to-end architecture, and eliminates the need for multiple point-to-point reconciliations in a secure way, all while enhancing regulatory transparency,” says Radhika Venkatraman, Credit Suisse’s head of technology, data and infrastructure for global markets and Credit Suisse Holdings (US).
In March 2018, Credit Suisse, HQLAx and ING completed the first live securities lending transaction using R3’s Corda DLT platform to record, execute and manage transactions. The banks swapped baskets of securities valued at Ä25m using the HQLAx Corda-based collateral lending application.
The counterparties had agreed to transfer legal ownership of Dutch and German government securities on the platform using Digital Collateral Record (DCR), while the underlying securities remained static within unique DCR-linked custody accounts, eliminating the inter-account transfer of the individual underlying securities.
The applications of this solution are promising, as market participants will be able to redistribute liquidity more effectively by eliminating settlement delay. From a regulatory standpoint, collateral chain transparency will improve visibility into the securities lending market. Overall, this creates a more efficient, cost effective and transparent way to transfer liquidities.
Winner: Nedbank
Project name: Satellite and Drone Imagery Analytics Experimentation
Partner: Aerobotics
After a fitful and fearful start, most banks are riding the fintech revolution wave and reaping the benefits of working with agile and innovative start-ups, such as improved customer experience and the ability to deliver highly personalised services to customers.
South-African lender Nedbank scoops The Banker’s inaugural fintech partnership award with its ‘Satellite and drone imagery analytics experimentation’ project, which in many ways illustrates the possibilities opening up through such partnerships. Using an experimental methodology also drove internal change in the bank’s approach to fintechs.
Working with Aerobotics, Nedbank developed a product that combines technologies, such as unmanned aerial vehicles and machine learning algorithms, to present and transmit data to farmers using an easy-to-engage-with platform. The product was targeted at tree farmers, whose needs were not met by available satellite analysis technologies.
The bank took the opportunity to prove the product’s value to its agricultural clients, laying the groundwork to integrate financial services with alternative client channels. The experiment was based on the correct hypothesis that clients could use this technology to improve precision farming capabilities.
“This initiative enables our clients to use technology to improve precision farming capabilities and yields over time,” says Brian Kennedy, managing executive at Nedbank corporate and investment bank. “Clients now use the tree crop analytics platform to track health, height, volume and canopy size on a per tree basis, which has significantly impacted management reach and efficacy.”
The product has been well received by the bank’s clients. Nedbank and Aerobotics co-presented the results of the experiment to the client and commercial agreements were signed shortly thereafter.
Nedbank has benefited because it has provided client value and satisfaction, as well as positioned the bank for future opportunities. The Nedbank-Aerobotics partnership will allow the bank to understand how it can meet the financial needs of clients in new ways through enhanced risk measurements. Nedbank believes that farmers are moving to a more data-driven world and software platforms such as Aerobotics can disintermediate many traditional stakeholders in the agriculture value chain.
In addition, the bank developed a new methodology for working with fintech start-ups and technology collaborators, where client value hypotheses are proven in incremental experiments. The experimentation methodology allows Nedbank to match the speed of a fintech while testing the value and suitability of the technology in the banking environment.
Winner: CaixaBank
Project name: CaixaBank App
Partner: CaixaBank DigitalBusiness, Silk
The mobile channel continues to grow in importance, as evidenced by the number of entries submitted for the category in this year’s Tech Projects Awards, second only to digital transformation. The competition was stiff, but the accolade goes to CaixaBank for its mobile app.
The Spanish bank’s customers are increasingly mobile and now the number of mobile users at the bank has recently overtaken web users. “Thus, we wanted to ensure that we continue to improve our offering, service and experience,” says Benjamí Puigdevall, corporate director of CaixaBank and executive president of CaixaBank Digital Business.
The app was designed with the user experience in mind and its primary aim is to make it easier for CaixaBank’s customers to execute day-to-day banking operations in one place and with one click.
“We tried to simplify the content and navigation, in order to make the sales processes more intuitive. We have adapted the language, making it more user friendly, and added innovative features through advanced functionalities such as a ChatBot with AI and biometric access. To deliver all of these elements we have used design thinking to conceptualise and agile methodology to develop the app,” says Mr Puigdevall.
It is the first online and multi-device service for personal finances in the Spanish banking market that integrates 24 months of transactions automatically categorised. As a native mobile app, it takes advantage of the device’s full functionalities, usability and design. Plus, it offers the possibility of viewing the financial information of other banks’ accounts and cards.
The bank launched the mobile app in February 2018, following a year of market analysis, workshops and focus groups, collaborating with more than 1300 clients in different phases of the project. One hundred clients tested the final version of the app before it was released.
Mr Puigdevall reports that the bank attracted an additional 300,000 mobile customers within six months of the app’s launch. Sales have also increased by 30%-150%, depending on the product, and the sales pipelines have improved, with a 20% improvement in conversions.
“The CaixaBank app boasts some of the best ratings among financial apps, with ratings of 4.7 [out of five] for iOS and 4.3 (4.7 since the latest release) for Android. This means that our reviews are 95% positive,” adds Mr Puigdevall. “In the future, we will continue to improve the app and incorporate new features, always focusing on meeting the needs of our customers and improving their user experience.”
Winner: Yes Bank
Project name: Digital Payments Initiatives
Yes Bank’s belief that “banks are now technology companies in the business of banking” plays out in real life through its digital payments, which is the reason the Indian bank has picked up the award for payments in 2018.
The bank has created its digital payment initiatives with three specific objectives in mind. The first is to increase the efficiency for its customers and provide value-added services for its partners through innovating with new technologies such as application programming interfaces (APIs) and blockchain. The bank believes that by enabling APIs it gives customers better payment experiences and helps develop the fintech ecosystem in India. In the blockchain space, Yes Bank is one of only two banks in India to partner with distributed ledger technology-based payments firm Ripple for remittances.
The second objective is to experiment with new developments, including India’s Unified Payments Interface (UPI), Bharat Bill Payment System and Aadhaar Enabled Payment System (AEPS). For example, Yes Bank partnered with Nearby Technologies to offer AEPS solutions and innovative ATM services to customers across India. Using the PayNearby mobile application on a smartphone, a retailer can become an Aadhaar ATM/bank branch for cash withdrawals and deposits.
In another example, Yes Bank partnered with clients across various industries, such as e-commerce, mutual funds, broking, non-bank institutions, travel and so on, to provide a seamless mobile payments experience by leveraging UPI. The solution is expected to reduce transaction processing time, make transactions cheaper and provide mobile-optimised experience. And it can be integrated with clients’ various internal systems through APIs.
The third objective is to enhance customer service. For example, the bank has deployed chatbots to give customers a ‘banker-at-beck-and-call’ experience and make instant payments. Rana Kapoor, managing director and CEO at Yes Bank, says: “Yes Bank has championed frugal innovations on the ‘India Stack’ and emerged as a dominant digital payments bank in India, taking significant steps to enhance customer service.”
The bank has also integrated the capabilities of India’s Immediate Payment Service (IMPS) engine into its Remittance Knowledge Bridge programme. This facilitates 24/7 fund transfers in four seconds to any IMPS-connected bank account. All banks in India are now replicating this model.
Winner: E.Sun BANK
Project name: Automatic Detection and Tracking of Fraudulent Accounts Model
The number of fraudulent accounts has risen sharply in Taiwan in recent years, resulting in losses for clients and increased operational risk for banks. The total number of such accounts exceeded 30,000 and reached a five-year high in 2017.
In the past, account verification was done manually, which was time consuming, labour intensive and ineffective. The traditional report relied on human expertise and appraisal, it lacked an overall assessment and, if an audit was needed, then a hardcopy file was required.
In order to monitor abnormal transactions more effectively and to reduce the manual monitoring cost, E.Sun Bank developed a regulatory technology – regtech – solution that uses artificial intelligence (AI) to decrease the number of fraudulent accounts, winning this year’s award for risk management.
The solution, which was developed in six months, uses a variety of machine learning algorithms to detect fraudulent accounts accurately and improve the precision rate of reporting suspicious fraud cases to the regulator, which is mandatory for all financial institutions in Taiwan. The bank implemented an automated monitoring system to reduce labour costs and to enable auto-control based on accurate detection results. Based on account transactions at different risk levels, E.Sun set different monitoring management measures and, therefore, manual reviews were no longer required.
E.Sun also created a centralised database for managing related information and implemented automated updates to monitor accounts on the watch list more accurately and to facilitate a faster decision-making process. The system automatically records the procedures and status of every irregular account and removes certain procedures, such as manual reviews and archived reports in hardcopy, to achieve centralised management and improve the efficiency of operations. All the information is displayed in an interactive dashboard to monitor and filter out attributes of irregular account holders.
And the results are impressive. For example, the precision rate improved by 40%, which in turn reduced the number of cases reported by 90%.
“The implementation of the project significantly enhanced account risk management and lowered labour cost of fraud monitoring. It can also safeguard our clients and keep bank accounts secure. In the future, we will continue to develop AI and will apply the technology into other operations of the bank,” says an E.Sun spokesperson. Other operational areas that the bank is looking at include client credit information, prevention of credit fraud and cheque deposit risk management.
Winner: ING Bank Slaski
Project name: Helen’s Doll
ING Bank Slaski has picked up the social media award in 2018 for its innovative ‘Helen’s doll’ project, demonstrating in real life the bank’s motto: “It’s people that count.”
While the bank has been monitoring social media since 2012, it started using Brand24 as a monitoring tool and Lithium Social Response to manage social conversations in 2017. The bank collects social messages from different platforms into a single stream and its agents can then take specific action in response to each message. Its goal is to be available for customers in social media 24/7 to provide them with excellent customer service.
Barbara Pasterczyk, chief marketing officer at ING Bank Slaski, says: “The use of advanced social media monitoring and listening tools serves the bank’s guiding principle, which is to build the best brand experience in social media. With [these tools] we can react in real time, quickly and efficiently, to customers’ expectations, problems and needs. It affects the perception of ING, as the bank is customer experience oriented, and has helped us to become us be the most recommended bank in Poland.”
When the monitoring tool revealed a notice placed at a Warsaw branch, written by a girl who had lost her doll, the bank reacted by posting on Facebook that it was sorry for her loss but wanted to help and offered to present a new doll to her at the branch.
Its empathic response gained ING Bank Slaski considerable social media attention. ING appeared on the main pages of the largest Polish portals, the bank’s Facebook post was viewed by more than 100,000 internet users and total reach in social media was 276,311. The advertising value equivalent was estimated at Ä47,000, versus Ä32 to replace the doll.
The bank says that the use of a social media monitoring tool, which monitors not only its own channels but also other sites, was crucial to the success of the project. Such a tool allows the bank to better understand its customers’ needs and offers more opportunity to interact.
“The proper use of technology allows us to differentiate marketing clutter and reach internet users with emotional content. It generates a huge buzz and positive opinions. Such direct interactions with clients via social media help us improve customer experience and strengthen relationships with our clients,” says Ms Pasterczyk.
Winner: DenizBank
Project name: AlgoLab
Partners: Ekon Technology and Software
Retail trading has seen some interesting innovations over the past few years, many coming from the fintech start-up community. However, banks are now bringing creative trading platforms to market, as shown by this year’s award winner – DenizBank.
The Turkish bank’s AlgoLab project uses artificial intelligence to automate investment processes, which helps ordinary citizens invest their savings – an activity the government is promoting. Without needing to know how to code, users can create their own strategies and algorithms, or use ‘drag and drop’ components of the user-friendly platform. The platform helps customers overcome common investor problems, such as emotional decision-making, limited time for investing and the complexity of investment platforms.
The project came about following the bank’s observations that many customers were losing money mainly because they were not applying stop-loss rules that would ensure maximum profit realisation. Others were too wedded to their trading decisions, obstinate to a fault, and would not take quick action to compensate for mistakes, while others developed correct investing strategies but were unable to execute them.
DenizBank and Ankara-based Ekon Technology and Software built AlgoLab to help customers create a strategy based on their risk appetite and then execute it with the ‘algo robot’. “We believe that brain beats the heart when you invest and AlgoLab’s strategies will be there when it comes to make that decision,” says Cem Önenç, executive vice-president at DenizBank.
According to the bank, customers will no longer need a human broker because they can monitor or change parameters at any time, and the algo robot will then make decisions to buy and sell on behalf of users within the stated parameters.
The ‘drag and drop’ feature allows customers to use DenizBank’s indicator and trend codes, which are displayed as buttons such as ‘Relative Strength Index indicator’ or ‘Parabolic Stop and Reverse Trend’. Users can drag a button and drop it on the stock they would like to monitor and execute on.
In addition, Ekon has developed a unique coding platform (Complier), which gives the opportunity for more advanced traders to code in three different languages: Java, Python and C++. With these three features, the platform is able to accommodate different trader maturity levels.
Since March 2018, DenizBank has 50 customers actively using algorithms trading via AlgoLab, and already these customers are creating 5% of all transactions made by the bank on the Turkish stock market.
