FinAi Podcast

Heang Chan, co-founder and CEO of low-code solutions provider Prelim, knows firsthand how manual and cumbersome customer-facing processes can be. It’s one reason he left banking seven years ago to work in fintechs.  

“I spent a considerable amount of time as a banker and realized that there were a lot of, I would say, places where we can improve the customer experience,” Chan tells Bank Automation News. “You would have customers at the bank have a certain level of expectation, even back when I started in early 2000s, and that expectation has increased exponentially as they are users of new technology that are customer-facing, such as Uber, Lyft and even Amazon.” 

Chan wanted to be “on the right side of technology” and shape that future, he says in this episode of “The Buzz” podcast. He also discusses what Prelim does — creating low-code solutions — and what it’s like as a fintech to integrate with core solutions.  

In March, Prelim announced a $1.7 million funding round with EJF Capital, bringing its total amount raised to $3.8 million, according to Crunchbase. Chan explains what the company plans to do with that new money, as well as how it automates the customer journey in commercial banking and lending.  

This interview is part of a new podcast series featuring startups from Bank Automation News’ Emerging Fintech Directory.  

Skyrocketing scams and card-not-present (CNP) fraud losses can be blamed on bad actors leveraging automation, experts say.

Consumer scams reported by bank executives have risen by double-digit percentages since the start of the pandemic, while CNP fraud losses look poised to reach $9.2 billion in 2023, a 15% year-over-year increase, according to research firm Aite-Novarica.

While the scale of these attacks is unprecedented, automation plays a surprising role, David Mattei, strategic advisor of fraud and anti-money-laundering at the company, tells Bank Automation News in this episode of “The Buzz” podcast.

“Fraudsters are really good at automation, and what that allows them to do is commit fraud at scale,” Mattei tells BAN. “Bots are one of the significant ways that it’s happening today. The other way is via a combination of automation and human fraud farms.”

Fraud farms ensure humans step in for bots to complete manual inquiries that cybersecurity measures have made impossible to automate, like CAPTCHA requests and voice commands. This mix of automation and human input mirrors anti-fraud systems at the same financial institutions that fraudsters target, where process workflows and simple tasks are automated to ease workloads for employees.

Regulatory developments in Europe have “squeezed the balloon” of financial services fraud, Mattei says, forcing cybercriminals away from tougher targets but failing to reduce the problem quantitatively. U.S. banks should adopt machine learning and artificial intelligence technologies to increase stringency, he says.

“I am expecting things to get worse before they get better here in the United States,” Mattei says.

Migrating legacy apps to the cloud is as complex as ‘a heart transplant’ 

Banks undoubtedly face challenges when transitioning to the cloud, including monolithic applications, a lack of resources, and legacy processes and workflows. 

Many also lack a clearly defined strategy shaped by business objectives, says Chinmoy Banerjee, corporate vice president and global head of banking at consulting firm Hexaware Technologies, on this episode of “The Buzz” podcast. That can lead to problems like “cloud sprawl,” which happens when banks do not have a clear understanding of the scope of the cloud environment, as well as overspending in the cloud, he adds. 

“All of these are challenges that banks have to consider, technology and otherwise, from a change perspective when they're looking at moving to [the] cloud,” Banerjee says. “The good news is that none of these challenges are without solutions.” 

Banerjee offers advice to banks on avoiding these pitfalls: Realize that not all applications are fit for the cloud, start small and take simple steps. 

“If you fail to plan, you know, you're planning to fail,” Banerjee tells BAN. “Migrating legacy applications to cloud is in many ways at least as complex and difficult as a heart transplant so planning very well would be key to implementing some of these challenges.” 

Listen to this episode of “The Buzz” to hear Banerjee share tips on staffing for the cloud and learn why moving to the cloud can ultimately support automating processes. 

Tech and regulatory hurdles stand in the way of a fully interoperable payments environment in the U.S.  

Consumers increasingly expect an interoperable — seamless and friction-free — payments ecosystem, with several banks and fintechs leading the charge through embedded data sharing and real-time payments (RTP). However, the growth in payments digitization has left many financial institutions and their customers struggling to keep up, Ginger Schmeltzer, strategic advisor at research firm Aite-Novarica, tells Bank Automation News in today’s episode of “The Buzz” podcast.  

“Most of us who have worked at banks have lived this: legacy technology,” Schmeltzer says. “The payments spaghetti infrastructure that so many banks have — with 40- and 50-year-old core systems that have been added on to and added on to as new technologies and payments come along — make it difficult to introduce new payment technologies.” 

Technology is only one barrier, Schmeltzer adds. Reticence from both consumers and banks to support data sharing, regulatory concerns from government entities and the hypercompetitive nature of financial services in the U.S. make true interoperability an ongoing challenge for market players.  

Schmeltzer sees new technologies playing a part in increasing interoperability in the United States.  

“The growth of application programming interfaces (APIs) over the last five or six years has made a huge difference in the ability for various players to work together,” Schmeltzer tells BAN. “QR codes have really jumped up in visibility during the pandemic, as people are looking for contactless ways to interact. That is really helping to drive more interoperability in a lot of areas.” 

Listen as Schmeltzer explains what interoperability means for payments systems and explores how financial institutions can move towards facilitating the environment.  

Sixty-two percent of banks say the complexity and risks associated with handling personal data for artificial intelligence (AI) often outweigh the benefits to customer experience. 

That’s according to The Economist Intelligence Unit survey sponsored by core provider Temenos. While data can be a challenge, there are three steps organizations can take to better manage that data, Sue Laws, executive vice president of Business Solutions for the Americas at Temenos, tells Bank Automation News in this episode of “The Buzz.” 

“There is complexity, and there is risk associated with AI,” Laws says. “But once you take care of that, and then have the right resources to know how to best access and then leverage that data — that very much helps manage the associated risks.” 

Computer vision is a form of artificial intelligence that can help manage data, explains Tackle AI co-founder and Chief Technology Officer Sergio Suarez Jr., in this episode of “The Buzz” Podcast. 

Currently, the financial services industry’s use case for the technology is in mortgages, where banks are utilizing it to assess risk. Computer vision can sort through pages of documentation to pull out key information, Suarez explains. 

“[Bank have] got to look for a bunch of data points that will help them make the determination whether it's good or bad,” Suarez tells Bank Automation News. “We're very good at looking through them and pulling out all the things we are looking for, such as … what's the interest rate? What's the amount of this loan? [Has the consumer] been late paying? How many times were they late?”  

TD Bank’s U.S. strategy for commercial payments leans on back-office process automation.  

While the $450 billion U.S. arm of the Toronto-based bank has been digitizing its payments capabilities for several years, the pandemic accelerated the process for TD customers who may have been reticent to invest in automation. 

The bank’s commercial customers realized that existing “paper-pushing,” manual processes were not sustainable, Jo Jagadish, executive vice president and head of corporate products, services and innovation at TD, tells Bank Automation News in today’s episode of “The Buzz.” 

“We put in place, even pre-pandemic, products that enabled clients to really lean into the digitization of that back-end processing,” Jagadish says. “I think what was helpful, though, was that the pandemic helped accelerate the implementation of many of those conversations that were still on the cusp.”  

Invoicing, documentation and payment workflows were automated for success across TD’s client base, and she adds that a pre-pandemic “integrated payable solution” saw high rates of adoption. Moving forward, accounts payable automation for TD’s commercial customers will be a key innovation point.  

“We are looking over the next few months to enhance that capability to provide end-to-end accounts payable automation for the upper end of our community bank segment,” Jagadish says. “We really looked at the client base and tried to adopt the pricing, the packaging and the solution for the lower end of the spectrum while also solving for our middle market customer base.” 

Listen as TD’s Jagadish talks automation hurdles for commercial payments and best practices for banks embarking on an automation journey.  

Banks must shift their talent strategy from retention to productivity as the financial services industry struggles to keep up with demand for technology-focused employees.  

Training and retaining tech talent will be key for banks in 2022, with 54% of respondents of one survey listing staffing and retention as pressing needs, according to customer engagement firm Engageware. Banks should look to increase productivity and efficiency for remaining talent, CEO Bill Clark tells Bank Automation News in this episode of “The Buzz” podcast.  

“What can banks and credit unions do to attract and retain the talent?,” Clark asks. “I do not think people can plan to win that. They should try to attract and retain as many people as they can. But to plan to be fully staffed with the capabilities that you want, I think is difficult.” 

“Emphasis needs to shift from thinking you're going to be fully staffed all the time with the best people to getting the most productivity out of the people you have,” Clark adds.  

Clark also outlines the need to eliminate “silver bullet” approaches to digitization and automation at financial institutions, telling BAN that “you have to think about the sum total of interactions that your customers want to have with you, and how to optimize your operations to serve them well in the most efficient way possible.” 

Listen as Clark discusses tech talent, digital transformation and more in this podcast. 

In this Weekly Wrap episode of “The Buzz” podcast, the Bank Automation News team discusses the recent Bank Automation Summit 2022 with recorded conversations from the panel “Modernizing Commercial Lending Through Automation.” 

Listen to find out how technology experts are deploying automation for commercial lending success in the wake of disruption and digitization. This episode features: 

Atul Verma, CIO of personal and business banking at BMO; 

Daniel Seay, senior vice president and director of wholesale transformation at Fifth Third Bank; 

Chris Gufford, general manager of commercial product at nCino; and 

Karen Oakland, vice president of industry marketing at Smart Communications. 

Automating data capturing streamlines underwriting and decisioning processes for banks, Seay tells attendees. 

“It takes longer to do a renewal than it does a new money deal. And intuitively, that makes no sense,” Seay says. “Once you start to capture the data, where you can then use it, snapshot it and say only four data elements changed from the last time we did this. That really starts to change the game.” 

To poorly automate a process, use technology as the starting point rather than the ideation process, Pepe Porrata, chief operating officer at $731.7 million bank Varo Bank, tells Bank Automation News in this episode of "The Buzz.” 

This is because banks can “automate poorly designed experiences that are built to manage unnecessary complexity,” Porrata said. “So you got to really shift the way people think about this thing. You got to start with complexity first.” 

In this excerpt from the Bank Automation Summit, which took place recently in Charlotte, N.C., industry leaders discuss the role technology — particularly cores — plays in ideation. Joining this conversation are: 

• Ganesh Krishnan, enterprise chief information officer at PNC Financial Services Group; 
• Abhijit Chaudhary, chief product officer at Green Dot Corp.; and 
• Alex Sion, managing director and head of market growth at Citi Ventures.