FinAi Podcast

Cybersecurity measures are a priority at Royal Bank of Canada (RBC), from monitoring and mitigation to solution investment.

Banks rarely consider cybersecurity a finished process; the nimbleness of fraudsters and quick development of new hacking technology spur perpetually evolving security measures for risk and anti-money laundering (AML) divisions at most large financial institutions. But keeping cybersecurity agile goes far beyond yearly tweaks and minor investments, Shekher Puri, vice president of digital components and platforms at $1.4 trillion RBC, tells Bank Automation News in this episode of “The Buzz” podcast.

Cybersecurity is “an investment in perpetuity,” Puri says. “This is millions of dollars every single year that we're putting in and investing into these various technologies. Some of them are proprietary, and some of them we're going out to the marketplace, and we're looking at the best vendor solutions and the best supplier solutions.”

Adding nuance to this “full-court press” approach, Puri tells BAN that tackling cybersecurity at the solution architecture stage of development is key to a top-quality technology and strategy stack.

“Make sure that cybersecurity is built up a lot higher in the process,” Puri says. “They should be at the table as you're designing your product, as you're designing your experience, as you're designing your flow. They should not be an afterthought.”

Listen as Puri details RBC’s cybersecurity and risk management approach for BAN, and discusses best practices for smaller banks embarking on the cybersecurity journey.

Synthetic identities are increasingly used to attack buy now, pay later (BNPL) offerings, says Mike Cook, vice president of fraud solutions commercialization at identity verification firm Socure.  

“Synthetic identities take a different bunch of different forms, but basically, they're just identities that don't really exist,” Cook tells Bank Automation News in this episode of “The Buzz” podcast. “Fraudsters will always attack a new vertical.” 

Socure works with five of the six biggest banks in the U.S., including Wells Fargo and Capital One, as well as digital banks Chime and SoFi.  

BNPL is an attractive target for cybercriminals since the loans are submitted with little information for quick approval, making it challenging for companies to filter out fraudulent applications, Cook says on the podcast. 

There are two main ways to launch a synthetic fraud attack, he says, including “credit washing” one’s own credit report to artificially inflate the person’s credit rating and fabricating an account to open credit lines the fraudster has no intention of paying back.

Customer service systems often automate call recording and processing analysis, but you can tell a lot by detecting just the tone of a conversation. 

Los Angeles-based Behavioral Signals says its technology is more effective than humans at determining empathy and intention. Rather than attempting to detect the actual words being said and how they’re used, there is the “acoustic” content of a conversation, Chief Executive Rana Gujral tells Bank Automation News in this episode of “The Buzz” podcast, which provides a brief intro to the technology. 

Behavioral Signals was founded in 2016 and with its tone determination technology, the company seeks to match each customer with the right service employee. 

“In a conversation, there are two big elements,” Gujral says. “One is the spoken word, and then everything else that’s behind the spoken word or beyond the spoken word.” 

Behavioral Signals’ technology measures conversational elements in real time, he tells BAN, and can place information in “buckets” of emotions, behaviors and propensities. From those elements and indicators, the company’s systems can determine tone and empathy 15% more accurately than a human. 

Bank Automation Summit Fall 2022, taking place Sept. 19-20 in Seattle, is a crucial event on automation and automation technology in banking. Learn more and register for Bank Automation Summit Fall 2022. 

Use cases for intelligent document processing (IDP) include automating the know your customer (KYC) process. 

The KYC process previously was performed by humans, which led to plenty of effort and errors, says Sateesh Seetharamiah, director at artificial intelligence and automation company EdgeVerve. Using IDP, one “very large U.S. financial bank” is now able to process 20 million documents through automation, he tells Bank Automation News, without naming the bank. 

The bank “during COVID times faced tremendous challenge, and now this has become the way of the business where we are helping them in the KYC process,” Seetharamiah told BAN. “There was a lot of human effort on this and historically, they felt there were errors, and all of that has been eliminated significantly.” 

IDP leverages a multitude of technologies to automate document processing, including machine learning, natural language processing and, on the back end, robotic process automation for integration.  

Here, Seetharamiah shares how the technology can automate and add value for financial institutions with: 

• Customer onboarding; 
• Loan processing; 
• Loan dispersal; 
• Customer profile changes;  
• Regulatory compliance, including KYC; and 
• Risk mitigation. 

Listen as Seetharamiah also offers advice for how financial institutions can get started and successfully implement IDP solutions. 

Two trends emerging as opportunities for banking-as-a-service (BaaS) are the growth of the gig economy and small businesses, and Green Dot, the fintech and holding company that powers services for Uber, Walmart, Amazon Flex and Intuit, is getting in on the action.  

Green Dot is currently focusing on those BaaS opportunities, Amit Parikh, executive vice president of BaaS at Green Dot, tells Bank Automation News in this episode of “The Buzz” podcast.   

“It's projected that 50% of the U.S. workforce will earn a 1099 income by 2028,” says Parikh. “That's 90 million workers.” 

There are also opportunities for BaaS in the small- and mid-size business space, which includes close to 50% of the gross domestic product in the U.S., he notes. 

“This space where a small business owner spends more than five hours a week worrying about money, there's so much opportunity to make it easier for everybody to be able to move money,” he tells BAN. “There's a long way, in my opinion, of continuing to make the experience easier and easier for our consumer.” 

Parikh also discusses Green Dot’s core shift to Temenos Banking Cloud, where the company is providing BaaS products, and the role microservices play in its business strategy. 

Daylight Automation co-founder explains the challenges 

Commercial banks are focusing on a human-centric approach to relationships that may be holding them back when it comes to digitizing such basic functions as account opening. 

This more human approach is a challenge, Art Harrison, co-founder and chief growth officer for workflow automation vendor Daylight Automation, tells Bank Automation News in this episode of “The Buzz” podcast.  

“A lot of the trust and the relationships at banks, particularly on the commercial side, is still human-centric,” Harrison says. “The differentiation and the value that a lot of these organizations still bring is the expertise and the guidance that they provide to these busy stakeholders.” 

Fifty-six percent of commercial banking executives say digital account opening is the No. 1 technology issue for business customers over the next five years, according to a recent study by Phoenix-based Catalyst Consulting Group. 

That report also noted that the difficulties with onboarding commercial clients come down to complex relationships and workflows. This, in turn, has led to barriers in automating key functions like verifying business entities, according to the report. 

Harrison tells BAN that regulatory requirements like knowing the beneficial ownership structure also bog down efforts to digitize commercial processes.  

The Canadian-based company, founded in 2015, works with financial institutions such as BMO, BMO Harris and Manulife Financial, which owns John Hancock Financial in the U.S., to tackle this issue through its low-code solution, he explains.  

Daylight Automation has raised $15.9 million over four funding rounds, according to Crunchbase.