The Banker's Tech Projects Awards 2019

Each year The Banker’s Tech Projects Awards attract an increasing number and more varied entries from across the global financial services industry, cementing its position as one of the premier awards programmes in financial technology. And to ensure fairness and impartiality, we have gathered together the great and the good in the industry to form our independent judging panel – thanks to all the judges for their gallant efforts this year.

In 2019, industry players – banks, consultancies and technology providers – tendered entries from across the globe, showcasing the strategic innovation happening in banks ranging from Mongolia to Ecuador, Poland to Botswana; thus, the winners are similarly geographically dispersed. The awards judging process takes into consideration the local operating environment and applauds technology solutions that have made a significant impact in a domestic market. It is not always a case of biggest is best, as proven by the fintech disruptors in many markets.

However, the global players are not resting on their laurels and have been clearly mobilising investments, resources and people to drive forward their technology strategies. As such, it comes as no surprise that the digital transformation category once again received the highest number of entries. Banks across the world are working hard to modernise all aspects of their business, driving paper and manual intervention out of every process and improving customer experience through better use of data.

The digital transformation winner in 2019, Banco de Bogotá, started off with a pilot project to see how fast it could build a new website and uncovered the vast transformative potential that moving to cloud and application programming interfaces (APIs) could unleash for its retail business. The Colombian bank reports a significant growth in the digital channel’s activity rate, an increase in website transactions and an improvement in the website’s net promoter score.

Yet again the mobile category received the second highest number of submissions and double the number of entries in 2018. The projects show a maturation of the mobile channel, with many showcasing functionality well beyond simple account services. The focus is on enabling the customer’s lifestyle from their mobile device, whether that is providing a digital concierge or financial planning guidance, or enabling foreign exchange trading, mortgage applications and investment allocation. Most projects had elements of biometrics – facial and/or fingerprints – embedded in the mobile app to guarantee security as well as a frictionless customer experience.

Both APIs and distributed ledger technology (DLT) categories received double the number of entries than in 2018, which illustrates the growing importance of both in the technology stack of banks. While APIs have been given a boost by regulations such as the EU’s Payment Services Directive 2, in other jurisdictions the direction of travel towards open banking is clear – and banks are taking advantage of the innovation ecosystem that becomes possible with open APIs.

The DLT projects are also reaching a higher level of maturity and the solutions coming to market are making real gains in efficiency and capabilities. Twice the number of entries were submitted in 2018, which also saw a doubling of entries over 2017 – and this trend is likely to continue.

Unsurprisingly, the fintech partnership category – first added in 2018 – saw an increase in entries, illustrating the growing role start-ups are playing in helping banks along their digital transformation journey.

Congratulations to all the winners in 2019.

Global, Artificial intelligence and robotics
Winner: DBS Group Technology and Operations
Project: A Small Bot for Banking; a Giant Innovation for a Better World

DBS has long exhibited its prowess in The Banker’s Tech Projects Awards, however 2019 is a standout year by anyone’s standards. The Singapore banking group was among the top three contenders in almost half the awards categories, a feat that scooped it the global accolade for 2019.

While it gave other entrants a run for their money in several categories including cyber security, data and payments, it was in the highly coveted artificial intelligence (AI) and robotics category where DBS triumphed with its ‘A Small Bot for Banking; a Giant Innovation for a Better World’ project. Its winning entry includes two projects: a corporate banking virtual assistant called 'Joy' for the institutional banking group; and Quantum Image Recognition Application (QIRA) deployed in the consumer banking group to power its call centre.

DBS is using AI and intelligent process automation (IPA) to develop a hyper-personalised strategy, delivering differentiated customer experiences by applying data insights to decision making, and improving operational efficiency. In addition to robotic process automation (RPA), the bank reaps additional benefits from automation by leveraging AI to enhance IPA, through natural language processing and machine learning.

Joy is an AI-enabled chatbot equipped with features such as quick reply, dynamic frequently asked questions and guided conversation, which help improve accuracy, increase learning speed and consistency to build trust and reduce friction in communication with corporate customers. Leveraging AI, data-driven analytics and machine learning, the bank can provide more relevant content, as well as product and service information. Following the pilot’s success in Singapore, the servicing platform was rolled out in all six DBS core markets in 2018.

QIRA is a workforce command centre bot, developed in house by the workforce management (WM) team in the call centre. It uses RPA to transform the current command centre model by embedding digitalisation and automation, to improve real-time resource optimisation, thereby creating better employee and customer experience. The WM team is now focused on more value-added tasks, such as analysing real-time trends and providing insights to stakeholders.

The project originated from a few avid gamers in the WM team applying the use of bots in gaming (to automate character levelling up tasks) to manage real-time demands and distribute calls and workload efficiently. QIRA is a testament to the bank’s start-up culture where people are self-empowered to develop new solutions.

"As Joy transforms to become the chatbot of choice with soul and empathy for customers’ banking services and financial needs, with a focus on sustainability, QIRA is also leading the way to a future-ready digital workforce," says Kelly Lau, executive director, regional strategic planning and support, at DBS.

Application programming interfaces
Winner: Société Générale
Project: SG Markets Developer Portal

Application programming interfaces (APIs) continue to be at the heart of Société Générale’s (SG’s) digital transformation strategy. The French bank started early and in 2014 launched its 'API Manifesto' and developed a security interface called SG Connect, available across the wholesale division.

In 2017, the bank built a single repository – the API catalogue – to gather its APIs with the same representational state transfer standard. After being enriched by thousands of users’ feedback, in early 2019 it was relaunched as SG Markets Developer Portal, designed as a full developer ecosystem to “code the bank” and the reason SG took home the API award this year. It was a hotly contested category in 2019, with more than double the number of submissions in 2018.

“Thanks to SG Markets Developer, we have accelerated our API developments, visibility and re-use,” says Alain Fischer, chief digital officer, global banking and investor solutions, at SG. “APIs are more than ever the backbone of our digital transformation. They foster information system simplification and innovation. Each brick of our information system is now an asset – unique, reliable and performant – that can be endlessly re-used, creating more and more value. This project enables all our staff to browse, test and use SG business-to-business services in a single place through catalogues of APIs, widgets and data.”

SG Markets Developer Portal is publicly open for client-facing APIs. Internally, it gathers more than 3800 APIs (including more than 1800 already in production), multiple types of products (widgets, datasets), as well as the documentation and self-service features. Over the course of 2018, SG’s APIs received 30 million calls by external clients.

The portal is a one-stop shop for developers and is used by a wide range of partners, such as business sponsors, users, IT architects and so on. Unleashing access to the bank’s data, there are now 377 companies that have connected their systems and applications to SG Markets Analytics APIs.

SG believes that its API project has transformative potential in two ways. First, for external clients and businesses, it enables the integration of data directly into the client’s information ecosystem, as such the information can be directly treated/analysed to fulfil the client’s need. Second, it fosters innovation both externally and internally. It can also be applied to a wider market, not only the banking industry.

Compliance
Winner: HSBC Bank
Project: Global Social Network Analytics
Partner: Quantexa

HSBC has scooped the compliance award for the second year running, further underscoring the importance the UK bank places on regulatory compliance. In both years, the bank has teamed up with fintech start-ups to deliver innovative solutions for tackling financial crime.

For an international bank with HSBC’s scale, it is a huge task to find signs of potential financial crime. Each month the bank screens more than 658 million transactions across 207 million accounts for signs of money laundering and other financial crime. One of the key challenges in detecting financial crime is establishing where people or entities are acting together to move money around the globe.

Working with an enterprise intelligence fintech, Quantexa, HSBC has developed its Global Social Network Analytics (GSNA) technology platform, which combines bank data and external data, such as company ownership information, to identify links between customers or transactions and map out networks. The platform provides bank investigators with an enhanced ability to analyse customer activities and relationships to better identify potential financial crime.

As Michael Shearer, global head of product management, financial crime threat mitigation, compliance, at HSBC, says: “Our goal was to develop a tool to help us tackle financial crime. GSNA has achieved this by enabling our investigators to analyse links between customers, transactions and external data. By revealing networks and adding context our investigations are deeper and, potentially, much faster.”

GSNA uses more than 40 billion data points to construct its diagrams of networks and references over 30 billion financial transactions. The platform uses several open source technologies such as Scala, Spark and Elastic Search and combines these technologies with Quantexa’s entity resolution and network generation to continually assess customer activities and provide a risk score.

In addition, the open architecture used in GSNA means that HSBC can integrate multiple technologies and data applications into the platform. This enables the bank to make use of the latest big data frameworks to reach new levels of performance and to manage large volumes of data.

“GSNA has given us unprecedented insight into global financial networks,” says Mr Shearer. “We are building on that foundation to further enhance our monitoring capabilities and focus our financial crime investigators on behaviour of greatest concern. We continue to expand the breadth and depth of data to improve the accuracy and coverage of this industry-leading capability.”

Cyber security
Winner: Yes Bank
Project: Corporate Net Banking – I-AM and I-AM FED

Having robust security procedures in corporate internet banking to minimise the possibilities of fraudulent transactions is of paramount importance to Yes Bank. The Indian bank believes that ensuring customer data security, trust and privacy will soon be the determining factor in every digital relationship, and aims to enable digital trust in a frictionless and seamless manner.

With this in mind, Yes Bank – in collaboration with global cyber security research firm 42 Labs – has developed an identity and access management solution called I-AM, which has the capability to provide real-time cryptographic digital transaction signing on a massive scale for its corporate clients. The bank’s pioneering approach clinched it the cyber security award in 2019.

I-AM aggregates three different factors to provide an identity trust score: the user’s identities, such as their mobile number; government-issued identities, such as Aadhaar and passport number; and bank-issued identities, such as their account number.

The bank’s I-AM platform helps individual entities (user and enterprise) to authenticate and prove identities in the digital world to securely communicate, access and share information and services. It has public key infrastructure-grade cryptographic strength, with a dynamic crypto generation capability each time, eliminating the need for one-time passwords and token-based authentication.

It makes use of crypto-identity technology, which tightly integrates and cryptographically links the customer’s digital identity attributes to every transaction. It not only ensures that the transaction is electronically signed, but also that it is end-to-end secure, and that only the intended recipient – the bank – will be able to process it. It protects the customers from sophisticated cyber attacks, such as phishing and man-in-the-middle, while ensuring that the corporate customer digital experience is seamless and frictionless.

Users can download the mobile app from Google Play Store and Apple App Store. The bank has been successful in rolling out its I-AM-based transaction signing method across more than 500 corporate clients and over 1200 users in these corporate entities.

Additionally, Yes Bank has extended I-AM-based authentication for file transfers and encryption which will further secure digital transactions of the bank’s customers. I-AM File Encryption Decryption (I-AM FED) is a new service by the bank, which is useful to encrypt the file at the corporate client’s end and decrypt the file at the bank’s end.

Data
Winner: Taishin International Bank
Project: Hybrid Data – the Artificial Intelligence Applications of Audio and Digital Footprint Data
Partners: Google, CloudMile, Grandsys

Picking up the accolade for best data project in 2019, Taishin International Bank (Taishin) has cleverly integrated traditional financial transaction data and customer activity data to establish an overall profile for its customers. Through its project 'Hybrid Data – the Artificial Intelligence Applications of Audio and Digital Footprint Data', the Taiwanese bank was also able to reform its corporate culture by introducing new technologies and redesigning procedures to achieve integration of multiform data.

“Traditional, static, structured customer data have reached limits on enhancing customer engagement,” says Christy Shyy, head of the segmentation division at Taishin. “By integrating data from devices, inbound calls, networks, applications and web portals and so on, we could more realistically understand the whole customer life experience and customer journey in financial services.

“We leveraged advanced big data analytic techniques, including text analytics, machine learning, data mining and natural language processing, to create the hybrid data, which glean important customer insights from previously untapped data sources and existing transactional data, and to support customers’ critical life transitions.”

The strategic key of this project was to look at how hybrid data establishes links between each step in the customer journey. Taishin introduced speech-to-text technology, as well as integrated customers’ footprints and design data models, which help in connecting heterogeneous data formats.

The bank used the data to build prediction models, then launched real-time marketing and retargeting campaigns. As a result, it saw a 60% increase in response rate, a 50% rise in online applications, and the success rate in opening a digital account increased from 40% to 80%.

From the bank’s perspective, a sound data integration framework saves on overhead during analysis. Customers’ preferences are captured based on more comprehensive data and suitable products or services are provided accordingly; they are no longer limited to a single product, a single channel or a single customer base.

“The customer interaction experience is becoming more scattered across a plethora of devices and channels, thus we need to adapt efficiently to the customer’s changing expectations at different contact points. Through hybrid data innovation, we seek to improve our understanding and empathising capabilities with our customers,” says Ms Shyy. Taishin also has several ongoing sub-projects to use call centre data to develop more data-driven marketing and services.

Delivery channels
Winner: CaixaBank
Project: Facial Recognition at CaixaBank ATMs
Partners: Fujitsu, FacePhi

CaixaBank Digital Business’s recent research into the pain points in the ATM customer journey found that the main frustration was the friction involved in using and memorising multiple passwords. Overall, customers were looking for security, simplicity and speed when interacting with an ATM.

In response to these findings, the Spanish bank saw an opportunity to use biometrics to improve the customer journey and in just eight months began rolling out the ability for clients to withdraw money with their face. Facial recognition proved to be a solution for a more secure, faster and frictionless interaction with the ATM, and more than 70% of CaixaBank clients from all ages were willing to swap the PIN for facial recognition at the ATM.

The registration process is done in CaixaBank 'store' branches, which are larger branches designed to offer higher value-added services. The process, which entails registering the client’s biometric coordinates, takes less than one minute. Once the registration is done, the client can immediately withdraw money from the ATM without the need of using their PIN.

The project was developed in six months, using agile and design-thinking methodologies. With a multidisciplinary CaixaBank team working with technology partners, Fujitsu and FacePhi, the bank designed and tested the solution with its customers to deploy the best and latest technology to satisfy their needs.

Three months after a limited roll out, more than 1300 clients have registered for the service, with an average of two withdrawals per month using facial recognition. The average withdrawal time was reduced by 5%, which also means a reduction in queues and an increase in customer satisfaction.

According to the bank, the project is a big step towards the future of customer identification and a key element in the security and digital customer experience of financial services. Additionally, the use of facial recognition in CaixaBank ATMs opens a new world of business opportunities, which will improve customer lives, optimise internal processes and increase revenues for the entity.

Benjamí Puigdevall, general manager at CaixaBank Digital Business, says: “This project has positioned CaixaBank as a pioneer to offer its customers the ability to use facial recognition to withdraw cash from ATMs, without having to enter their PIN, offering its customers a unique and frictionless experience.”

Digital transformation
Winner: Banco de Bogotá
Project: New Online Banking
Partners: Grupo Aval, ATH, McKinsey, Amazon, Mareigua, Transunion

Scooping the most sought-after award in 2019 is Banco de Bogotá’s New Online Banking project. It was born as a pilot initiative to measure its capacity to build a new website in a short time and with high cost-efficiency levels. It was implemented using cloud-native technologies that allow rapid integration with application programming interfaces (APIs) and connections with the bank’s core system.

Julio Rojas Sarmiento, chief financial officer at Banco de Bogotá, says: “Our New Online Banking project is changing the way in which Banco de Bogotá interacts with its customers. We have made digital transactions easier, leading them to carry out more advanced operations, thereby impacting their digital financial self-management.”

The bank developed a concept called 'shortcuts', which aims to gradually help clients increase their digital financial skills by highlighting popular transactions. It created a simple dashboard, with direct access buttons to the most relevant actions such as credit card, energy bill and mobile phone payments, or money transfers to family members or friends.

While working on the shortcut concept, the bank also looked to create natural experiences for mobile device users by leveraging the information of their social network’ interactions and the characteristics of the most popular apps. The objective is for users to feel that exploring an invoice is like exploring Instagram or Facebook stories, or that registering for a utility payment is the same as an online check-in, according to the bank.

The new website is built with standard technologies, which allows Banco de Bogotá to work at the time-to-market speed required to compete in the digital revolution that financial systems are experiencing. Effectively, the bank is building an open banking platform that allows it to quickly and easily integrate with other banks, new players and the entire financial ecosystem through APIs.

Open banking provides the bank with access to new relevant data, which provides the insight needed to develop new products and services, and also permits Banco de Bogotá to facilitate its bank-as-a-service platform, helping the rapid development of the financial ecosystem.

The bank reports a substantial increase in digital transactions, from 56.5% in 2017 to 73.5% in 2018, and an improvement in the website’s net promoter score to more than 80. “[It] is leading Banco de Bogotá to be perceived as a digital bank,” says Mr Rojas Sarmiento.

Distributed ledger technology
Winner: BBVA
Project: BBVA Blockchain Platform
Partners: Comunytek, Everis

The number of entries in the distributed ledger technology (DLT) category more than doubled this year, highlighting the increasing maturity of projects across the banking industry. BBVA’s blockchain platform, an innovative project that improves efficiency throughout the negotiation process between the Spanish bank and its customers to solve their financing needs, picks up the accolade in 2019.

The platform covers the whole origination process, including tracking the negotiations ahead of signing the contract. It uses a private DLT, Hyperledger, deployed between the bank and the customer, in which steps and data integral to the negotiation process are recorded, thereby guaranteeing traceability.

When the deal is digitally signed through the DLT platform, then it generates a hash for the contract and is recorded in the public blockchain Ethereum, effectively a time-stamped record in a public registry. The immutability of the agreement is ensured, as no amendment can be made to the hash.

The project has changed the way corporate clients interact with BBVA for their financing needs. With a transparent process implemented in a smart contract, the client is guaranteed that the process is fair and that all the information about the process is stored in an immutable ledger. Clients are encouraged to host their own blockchain nodes and are then given the complete source code to install their nodes. In addition, the bank is building a do-it-yourself portal with all communications flowing through the system.

Importantly – and what clinched the award – BBVA listed several financial instruments it closed using DLT, including bilateral loans, syndicated loans and structured bonds, with deals ranging from €35m to €1bn.

“Blockchain is a useful technology because its features of real time, traceability and transparency are instrumental to creating smart interactions and front-to-back automation. We believe blockchain technology is a long-term play, creating faster, easier and safer ways to share data and pieces of data modularly,” says Ricardo Laiseca, head of innovation and data analysis at BBVA Corporate and Investment Banking.

BBVA’s project has the potential to bring efficiency to the industry. For example, syndicated loans are characterised for having a group of banks arranging complex agreements with manual and inefficient processes that also incorporate external legal counsels. To transform this market, a blockchain platform would need to be adopted as the marketplace through which banks and clients get in contact and negotiate financing terms.

Fintech partnership
Winner: Ezbob
Project: Smarter Onboarding in Unsecured SME Lending
Partners: RBS/Esme Loans

Small and medium-sized enterprises (SMEs), hailed as the engine of economic growth, have long been underserved by the banking industry, particularly in areas such as financing. But now digital challengers are stepping in to give the sector the attention it warrants.

Ezbob, a UK fintech founded in 2011 as an online lending platform, is one such new entrant and has picked up the award for best fintech partnership for its work with Royal Bank of Scotland’s (RBS's) SME lending arm, Esme Loans. The fintech provides an open platform that enables Esme to build, launch and operate financial products for its customers, drawing on the data available in the UK's Open Banking environment.

In April 2019, Ezbob’s Smart Onboarding Engine went live at Esme. “The Smart Onboarding Engine simplifies SME loan applications. It cuts loan servicing costs accrued by Esme and Ezbob’s other clients, such as American Express and CYBG, by up to 80% while allowing their SME customers to receive a lending decision in just seven minutes. It has enabled Esme and our other clients to lend to SMEs faster, more cost effectively and with improved credit data insights,” says Tomer Guriel, founder and CEO of Ezbob.

The platform allows for the speedy development of new products and services, but also includes innovative solutions for simple deployment, operation and maintenance in dedicated or shared (multi-tenant) systems.

Ezbob has a suite of modular lending applications, including Catalyst+, a risk engine, activation engine and servicing engine. It aggregates information from more than 40 different service providers and presents better data that leads to better risk management. This includes the ability to provide loans based on non-traditional online data, such as Amazon, eBay or PayPal activity. It also features smart, real-time monitoring analytics that uncover customer journey optimisation opportunities to increase acquisition conversion metrics.

The fintech’s solution also supports multiple products, including business loans, mortgages, and asset finance, which can be offered to different types of customer. This widens the scope from SMEs, allowing banks and financial institutions to transform their entire lending infrastructure, enabling improved customer experience, faster lending, automation, reduced cost per loan and increased profitability for all types of consumer product.

Ezbob’s ambition is to move into adjacent sectors. It is also exploring further partnerships with ‘big tech’ companies, for example, as they move into the financial services space.

Mobile
Winner: VTB Bank
Project: My Smart City Mobile App
Partners: Government of Moscow, Intervale, Ampersand

VTB Bank has taken the mobile app concept to the next level. The Russian bank’s My Smart City mobile app combines informational and financial services that are needed for everyday city life, which had not been brought together in a single application until now.

“We have designed this app with the interests and needs of modern urbanites in mind,” says Vadim Izotov, head of special electronic products division, global transaction banking, at VTB Bank. Through their smartphone, the customer can access necessary information and easily get on with their daily business – in just one click.

The free app changes in accordance with the user’s current location and habits. It was initially launched for Moscow, in association with the municipal government, and supports an ongoing programme to develop Moscow as an innovative, modern, highly technological city of the future.

The My Smart City app collects data on urbanites’ needs, habits, interests, spending and location (in strict accordance with the current Russian legislation on personal data and confidential information). It then transfers the data to the municipal government, state departments and service providers, which analyse the data to help drive changes in organisational functions, making services more convenient and efficient.

VTB Bank wants to help urbanites to complete smoothly their daily tasks easily with the minimum amount of effort and time – and at a minimum cost. The app provides users with a comprehensive payment solution by involving local government departments and service providers in one app. For example, users can purchase tickets for cultural events, top up their Troyka transport card, pay for parking, utility bills and school meals, as well as access the best offers and deals in the district.

State departments and service providers benefit from new sales channels, having a new platform for publishing information for better targeting audiences, and a trustworthy and fast payment system. VTB benefits from the socially oriented large-scale project in association with the Moscow government through increasing the number and volume of transactions and new customers. Both benefit from the big data aspect of the project.

An Android version will be released in September 2019 and a second release for St Petersburg is currently under development. “We will continue to expand the capabilities of the app and plan to launch My Smart City across other big cities in Russia,” says Mr Izotov.

Payments
Winner: Standard Bank
Project: Standard Bank Virtual Card
Partners: Tutuka, Mastercard, Uber, Takealot, Zando, Admyt, Travelstart

Globally e-commerce is exploding, but South African online spend is lagging despite the best efforts of prominent retailers and a modern card infrastructure. Lack of trust, convenience and flexibility are still hindering e-commerce spend, with just 2% of total South African retail spend done online.

To address this challenge, Standard Bank launched its virtual card project to bring innovation to the way all South Africans can join and participate in the local and global online shopping experience. It allows customers to create, load and use prepaid virtual cards online, in real-time, and with unparalleled safety and control.

The goals of the project were to create a product that was customer-led, had no eligibility criteria, no credit-worthiness requirement, was free to customers and allowed customers to transact in real time. The South African bank has worked closely with e-commerce partners including Takealot, Uber, Travelstart and Zando, to develop the virtual card ecosystem, and it is starting to attract early adopters from across its customer base.

Standard Bank virtual cards are prepaid reloadable cards, issued in real time in the bank’s mobile banking app, that can be instantly loaded from any account and utilised anywhere on the internet and mobile apps. Customers can create multiple cards, generic for unlimited shopping or cards co-branded with leading South African online retailers for unique incentives and flexibility.

It is an innovative implementation of the virtual card concept, allowing real-time creation, real-time load from multiple account types, and co-branding with the biggest names in South African e-commerce. It offers online retailers a 'secure virtual mall' inside one of the biggest African banks’ mobile app, to showcase their brand and incentives without any technical interfacing work.

Gwenaël Trotel, head of consumer solutions at Standard Bank, says: “With virtual cards, all our [retail] customers can now shop online with unrivalled safety and convenience, particularly those who used to be concerned about using their physical cards detail on the internet. We will continuously expand functionality and include more partnerships to make virtual cards even more practical and safe for our customers to enjoy online shopping and new digital experiences.”

A total of 30,000 cards are now in use. Currently, the virtual card is targeted at consumers, with offerings focused on commercial clients in the pipeline, as well as expansion into the rest of Standard Bank’s African markets.

Risk management
Winner: Sumitomo Mitsui Banking Corporation
Project: Enterprise Financial Status Prediction
Partner: JSOL Corporation

Sumitomo Mitsui Banking Corporation (SMBC) no longer has to wait until year-end results to assess if a corporate client is running into financial difficulty. With its new credit management system, called Enterprise Financial Status Prediction (EFSP), it can do it in real time, which clinched it the risk management award for 2019.

The EFSP system, developed jointly with JSOL Corporation, can detect changes in the business conditions of a transacting corporate client at an earlier stage based on dynamic data relating to the corporate client’s account and by leveraging artificial intelligence and machine learning to capture complex interactions of multiple factors that a person was unable to perceive previously.

Detection of such changes can now happen up to 15 months before the settled financial statements are released, which means that SMBC can provide business support proposals to its corporate clients in a timely manner. Additionally, the bank is able to avoid additional credit costs associated with a client facing future deterioration of business conditions. This could potentially reduce the bank’s provisioning for loan losses.

The Japanese bank and JSOL began developing the EFSP system in 2016 and continually tweaked it until it was ready to be used in the bank’s credit management operations. In February 2019, the partners started providing the system as a cloud service to external companies, mainly financial institutions, on OpenCanvas, which is a cloud platform for financial institutions run by NTT Data.

In terms of its transformative impact, SMBC believes that banks ranging from large to small regional banks or financial institutions, such as credit co-operatives, will be the main beneficiaries, as they will be able to generate a credit risk score from the analysis of account-related information concerning their own corporate clients.

In addition, SMBC is receiving requests from some large business enterprises that would like to use the system. Global enterprises cannot capture business conditions of their overseas subsidiaries in a timely way, which is a serious problem for them. With the EFSP system, global enterprises can use the judgement scores and gain visibility over movements in the accounts of their overseas subsidiaries.

SMBC is considering further improving the accuracy of the system through using macroeconomic news and information in the supply chain in addition to account information. It is also considering developing a growth forecast model or a credit assessment model for start-ups.

Social media
Winner: Alfa-Bank Belarus
Project: InSync Now

In the past year, Alfa-Bank Belarus has doubled its number of mobile banking clients, its number of online transactions and its share of online deposits and loans portfolio. Achieving such results would require much more effort were it not for the trust the Belarusian bank has built upon regular positive interaction through InSync Now, an innovative communication tool within the bank’s social media strategy.

InSync Now, a micro-media outlet inside Alfa-Bank Belarus’s mobile banking app, InSync, creates a new way of interacting with mobile banking users, who are the most active customers of the bank. It is also a new way of managing social media content, and is an example of social banking.

Launched in September 2018, the initial stage of InSync Now included a newsfeed and ‘like’ buttons. The next update included hashtags that helped users find related articles. A more recent innovation is a 'red dot' indicating that a section has been updated with new publications worth reading.

The Alfa-Bank Belarus team was inspired by the Today section in Apple’s App Store and by big tech’s understanding of customer experience related to various apps, such as Instagram and Facebook. Clients are now used to scrolling through interesting and well-designed brief posts, so the team realised that the bank could harness this form of communication to appeal more directly to its users. The solution is unique in the Belarusian market, as no other bank uses such an approach in mobile banking.

Olga Filipenko, head of mobile business at Alfa-Bank Belarus, says: “The decision to launch InSync Now relates to the philosophy of Alfa-Bank Belarus: appeal to the clients, be closer to them and trigger positive emotions. This project aimed at ‘humanising’ the bank, making it helpful, easy to understand, and near and dear to the customers. The main reason why InSync Now is so greatly valued by customers is that it serves as a bridge to the bank’s team and a source of inspiration, interesting insights and useful tips.”

Over the course of five months, InSync Now reached the top three of Alfa-Bank Belarus’s communication channels, only trailing behind Twitter and Instagram accounts. The bank publishes five posts each week in the special section, each of them getting between 5000 and 8000 views on average, and 100 to 1000 ‘likes’. The InSync mobile banking audience consists of 230,000 clients, with daily in-app traffic of up to 80,000 visitors.

Trading systems
Winner: Credit Suisse
Project: EMEA Advanced Execution Services Enhanced Adaptive Framework

Competition between brokers in the algorithmic trading space has never been greater and innovation is key to stay ahead of the pack. The implementation of the Markets in Financial Instruments Directive (MiFID) II further highlighted the link between better trading performance and broker selection and, ultimately, the success of a trading platform.

To differentiate itself in such a competitive space – and scoop the award for best trading system project – Credit Suisse has incorporated machine learning technology in Europe, the Middle East and Africa (EMEA) equities trading through its suite of agency algorithmic trading strategies, called advanced execution services (AES). The machine learning project delivers best execution to clients by more optimally selecting between different strategy variants and parameters compared with traditional approaches.

The AES platform provides performance improvements against various execution quality benchmarks by helping define these selections in a more data-driven and dynamic fashion – for example, resulting in a more than 30% improvement versus volume weighted average price benchmark. Continually learning from new data and outcomes to improve these selections generates outperformance compared with the standard approach of relying on pre-defined rule sets, periodic or ad-hoc reviews, and/or manual selections.

Live since mid-2018, the machine learning platform is the result of collaboration between the bank’s AES quant and technology teams. The combined partnership enabled the bank to harness the necessary technology infrastructure with quantitative analysis to move beyond theoretical concepts to deliver a live set-up for clients within a strong and compliant framework.

The machine learning framework transforms how Credit Suisse selects more optimal trading strategies. It makes quicker and more intelligent analysis and informed decision making much more feasible across a wide set of data, clients and types of flow. It provides a much stronger data-driven framework to support and automatically update these decisions on an ongoing basis, and allows for more tailored selection of strategies and strategy variants for specific types of flow.

“This platform was designed with one goal in mind: to deliver better results to our clients,” says Jonathan Tse, head of EMEA advanced execution services product at Credit Suisse. “We have taken the time to build the right teams and technology infrastructure to be able to truly leverage quantitative research and machine learning from theory into reality; driving better and more targeted strategies for our clients on an order-by-order basis.”