FinAi Podcast

In this Weekly Wrap episode of “The Buzz” podcast, the Bank Automation News team discusses the big trend this week in banking technology: the shift to cloud services.

The cloud-focused news started Monday, with news that Fiserv will acquire cloud-native digital banking solution Finxact. This is the first true cloud-native core banking solution running on Amazon Web Services (AWS) for Fiserv, said David Albertazzi, director of Aite-Novarica Group’s retail banking and payments practice. BAN shares his insights into the core market’s race to the cloud. 

Core provider Jack Henry and Associates also revealed this week that they’ve been pursuing a cloud strategy for two years. Associate Editor Alijah Poindexter provides the details about that plan, gleaned from this week’s Jack Henry earnings call. The team also notes the historical significance of NCR’s plan to shift the bulk of its revenue to services and software from hardware. 

Tune in for a discussion of more finance-related cloud news, as well as a peek at what’s ahead, in today’s episode of the Weekly Wrap with Poindexter and BAN Deputy Editor Loraine Lawson for the week ended Feb. 11, 2022. 

Truist Financial was formed through the 2019 merger of BB&T and SunTrust — the largest bank merger in the past 20 years — and is the first substantial merger with a full digital component.

The Charlotte, N.C.-based Truist faced the added challenge of merging just before the pandemic started, Ken Meyer, Truist’s chief information officer of consumer technology, says in this episode of “The Buzz” podcast.

“We were officially three or four months old when everybody went home,” Meyer tells Bank Automation News. “We were just getting to know each other and getting started on this journey, and then everybody got sent home.”

Conversational artificial intelligence (AI), such as chatbots and virtual assistants, should serve as a facilitator of enhanced communications between financial institutions and their customers rather than functioning as tech for tech’s sake.  

Key to a successful conversational AI framework is the ability to “orchestrate” a conversation between an agent and customer, providing context for both parties and increasing interaction value, Tony Lorentzen, senior vice president of intelligent engagement at AI software firm Nuance Communications, tells Bank Automation News in this episode of “The Buzz” podcast. An example of this is an interactive voice response application (IVR) determining the intent of the call for the agent. 

“You shouldn't structure conversational AI as a blocker to an agent. What you need to be thinking about is how do you how do you orchestrate a conversation?” Lorentzen says. “If you're a high-level consumer who's transferring funds, you dial into an IVR and say what your intent is. The IVR can determine who you are, then send you to an agent.” 

Lorentzen shares techniques for successful conversational AI implementation, including voice biometrics and customer sentiment analysis, along with the importance of automation for customer and employee experience.  

In this Weekly Wrap episode of “The Buzz” podcast, the Bank Automation News team looks at a new type of ransomware attack on a U.S. bank, along with an FBI warning cautioning consumers on quick response (QR) code payments.  

White Rabbit, a new family of ransomware, attacked a U.S. bank in December 2021. While details are lacking, the attack could have a connection to Fin8, a group of financially motivated cybercriminals which previously attacked the retail, hospitality and entertainment industries. The attack appears to be in the testing phase, according to cybersecurity firm Trend Micro.  

On the consumer side, the FBI released a warning in January on fraud threats in QR code payments. Fraudsters either manipulate existing QR codes or create new ones, tricking consumers into providing sensitive financial information through fraudulent payment terminals. Risks include malware, passcode and information theft, and consumers are warned to take heightened precautions.  

Listen in for a discussion of these topics, along with TD Bank Group’s Azure-leveraged partnership with software company Databricks, in today’s Weekly Wrap episode with BAN Deputy Editor Loraine Lawson and Associate Editor Alijah Poindexter.  

Banks must fully commit to the cloud in their digital banking strategies while also using cloud adoption as a rallying point for end-to-end automation, Paul Taylor, chief executive of cloud core provider Thought Machine, tells Bank Automation News in this episode of “The Buzz” podcast. 

In the wake of COVID-19, many banks shifted their internal and external processes to a cloud-enabled digital format, which could withstand the disruption of the pandemic and its ensuing fallout. However, there is a significant difference between simply adopting a cloud platform and becoming fully cloud native in all technical aspects.  

“If you don't play to the cloud strengths, what's the point? You're effectively just outsourcing the hardware maintenance of the system, but you haven't really changed much else,” Taylor tells BAN. “Fully embracing cloud-native means that you put applications in containers, run them in pods, and maintain elastic scalability. That really gives you a huge advantage.” 

“Embrace and commit to it rather than just getting your own software to run on it,” he adds. 

Listen as Taylor discusses best practices in banking cloud adoption, along with the potential risk factors of over-automation.  

The buy now, pay later industry (BNPL) provides an innovation rail for alternative lending processes and real-time fund access, but it is also opening doors for advanced fraud techniques.  

Synthetic fraud poses an especially dangerous risk, Featurespace founder Dave Excell tells Bank Automation News in this episode of “The Buzz” podcast. Featurespace uses machine learning and behavioral analysis to facilitate anti-fraud measures for financial service companies. 

BNPL providers see most fraud occur at the onboarding, where identity and documentation must be provided in a process similar to opening a bank or credit card account. Cybercriminals create fake accounts using falsified information, which is then used to access products and services, Excell explains. 

“We've seen significant growth, especially in the U.S. market, around synthetic fraud,” Excell tells BAN. “So, where you're using stolen identity information mixed with fake information, almost like a synthetic person, which will clear certain validation checks.” 

Listen to glean insights on regulatory compliance and how BNPL providers can manage and mitigate fraud. 

The $653.6 billion Canadian Imperial Bank of Commerce on Jan. 13 became the latest of the Bix Six Canadian banks to select the nCino Bank Operating System for its business clients. 

Half of Canada's largest banks now use the cloud banking and loan automation firm, Cameron Sterrett, managing director of nCino's Canadian business, tells Bank Automation News in this episode of "The Buzz" podcast.

Key to nCino's expansion in Canada is that its banking solution is built on the Salesforce platform, features an open application programming interface (API) and offers a range of functionality out of the box, Sterrett noted. CIBC chose the company because it wants to modernize its small business banking platform and grow its portfolio while improving both the internal banker experience and commercial client experience, Sterrett said. 

Tune in to learn more about the technologies these banks can expect to leverage in the coming year.

nCino shares [NASDAQ: NCNO] closed at $44.61 today, up 7.03% from market open. 

Bank Automation Summit, taking place March 1-2 in Charlotte, is the first and only event to focus solely on automation in banking. The event will feature the brightest minds from across financial services on intelligent automation strategies and deployment. Learn more and register here for Bank Automation Summit 2022.

The BAN team covers JP Morgan Chase's report that revealed the $3.7 trillion bank is increasing its 2022 technology spend by 20% to $14.4 billion to improve cloud capabilities, data centers, data and analytics, and digital consumer experience.

Meanwhile, Wells Fargo has seen a nearly 50% year-over-year increase in digital payments through Zelle, and the $1.95 trillion bank plans to build out its mobile banking offerings for both consumers and businesses, the BAN team notes. 

The editors also run down news from the $3.1 trillion Bank of America and $187.5 billion Citizens Financial Group, which both saw significant net income gains last year compared with 2020, largely due to digital channels, services and sales. The two banks are leaning heavily on digital banking and products for future growth. 

Tune in for a discussion of these topics and what's ahead in today's episode of the Weekly Wrap with BAN Deputy Editor Loraine Lawson and Associate Editors Aaron Marsh and Alijah Poindexter for the week ended Jan. 21, 2022.

Bank Automation Summit, taking place March 1-2 in Charlotte, N.C., is the first and only event to focus solely on automation in banking. The event will feature the brightest minds from across financial services on intelligent automation strategies and deployment. Learn more and register for Bank Automation Summit 2022.

The most common mistake that companies make with the data when de-biasing artificial intelligence models is to remove obvious indicators such as race, gender and age, and then assume they’ve eliminated bias, David Van Bruwaene tells Bank Automation News in this episode of “The Buzz” podcast. 

Van Bruwaene is the founder and CEO of Canada-based Fairly.AI, which provides an artificial intelligence (AI) governance, risk and compliance solution for automating model risk management in financial services and other industries.  

Removing indicators can make bias more difficult to detect, Van Bruwaene says, but without identifiers to help detect bias, there is no opportunity to make algorithm adjustments to correct for it. 

Van Bruwaene breaks down for BAN listeners what banks can do to prepare data ahead of building models and explains the standards available to guide the creation of AI models. He also shares his advice for how banks and credit unions can stay ahead of potential regulations related to AI bias.