Sibos Day 4: The future of finance and using machine intelligence to provide better services

By Nicole Miskelly | 15 October 2015

The exponential growth of technology within the financial services industry and continuing efforts to improve services, has meant that the use of robots and artificial intelligence is becoming more of a reality. On the final day of Sibos 2015, IBM held a session demonstrating their cognitive technology IBM Watson, which processes information more like a human than a machine. The demonstration focused on the customer’s ability to order a new card by talking to Watson via mobile, then arranging a branch visit with the robot. Delegates seemed to enjoy the humorous touches added to the robot's responses and Jonathon Young, Program Director, Watson Group IBM highlighted that said the idea of robots working alongside humans is not so farfetched after all.

During the same session, Sridhar Lyengar, Engineer, Cognitive Applications Research Leader, TJ Watson IBM said that it’s all about cognitive learning and “the idea of having people and machines working together.” However, Lyengar believes that technology should only be implemented if it is solving a problem. “It’s great to have technology but if you aren’t solving a business problem then it’s not as useful.”

According to many industry experts, the future of finance is all about the customer and the ability to provide better services in real-time, which was a big talking point at Sibos this year. Financial service technology providers such as SunTec are already thinking about using machine learning to help their customers provide real-time processes and predictive analytics. “Predictive analytics can help firms to suggest what the customer would want and we are currently thinking about incorporating machine learning into capabilities,” said Nandar Kumar, President and CEO, SunTec.

Earlier in the week, SunTec held a session around ‘Offer Services Innovation in Banks – What’s the need of the hour?’ where a panel of industry experts including Reinhard Furthmayr, Senior VP at Commerzbank and Brett King, CEO and Founder of Moven, discussed the need for customer-centricity and how customer requirements have evolved. “We talked about the revolution of technology and how customers today are behaving completely different. Banks must consider three generations of customers; those that have been born into the virtual world and believe in it completely, those that were born in between and the ones born completely before it,” said Kumar.

There are huge opportunities to use analytics to create real-time experiences and machine learning to build accurate profiles using customer data, according to Suresh Ramamurthi, Chairman, CBW Bank and Luc Burgelman, CEO, NG Data who both use analytics and machine learning to provide services to customers, which they showcased at Innotribe session ‘Analytics for a real-time world’. According to Burgelman, the role of the bank is evolving towards a different kind of ecosystem and computers can be used to compare customers with similar characteristics, and make automated decisions on risks and opportunities.

During Innotribe session ‘Voice of the customer 3.0’ Matthias Kroner, Co-founder and CEO, Fidor Bank said that customers now want permanent connectivity and the main issue is culture within companies. Kroner highlighted that 53 per cent of people do not think their bank offers anything different to other banks and said that better banking needs to be customer-centric, integrative, open (both culturally and technically) and efficient. Kroner said that “Fidor was built to solve the problems of our customers” and he believes that what makes Fidor Bank unique is their customer-centric approach and advanced technological understanding. German-based Fidor bank recently launched in the UK and Kroner says that they decided to launch there because it is an interesting market which is dominated by very few players, and he also belives that people in the UK are far more open to innovation. According to Kroner, the German market is extremely competitive and German banks are extremely regional because they are trapped in their infrastructures.

Steve Jennings, CIO and founding partner at Better Ventures, said that banks need to get customers involved in new ideas and mentioned an initiative that Lego have developed called Lego Ideas, which enables customers to submit new product ideas. The initiative has had over 1 million participants so far, and the company have generated a number of customer ideas, even more, Lego give idea generators a share in revenue once the idea goes live. Jennings calls this kind of engagement participation-commerce and said that banks currently have two assets to focus on – employees and customers.

Companies in China are already listening to what customers want and according to Zennon Kapron, Founder, Kapronasia Chinese tech companies are utilising big data to their advantage. “I really think that the perfect storm that we are seeing in China right now is down to the tech companies’ ability to leverage consumer data in a way that couldn’t necessarily be done in other markets, to bring new products to market.”

Kapron also sees consumer insights being the next big trend in China. “Consumer insights will be the next big thing in China and the ability to be able to really bring data such as shopping preferences and food preferences etc together on one platform.”

So what will the industry be focusing on moving forward? According to Kumar, banks are realising that they need to create systems from the customer’s perspective. “The reality is that banks are realising that systems need to be designed from the outside in, from the customer’s perspective.” However, they also need to remember that every customer is unique.

Max Speur, COO, SunTec said the company have been talking to clients about segmentation.“On the retail side we are seeing a strong segmented approach, and we are helping clients with lifestyle segmentation processes and on the corporate side they are looking at segmentations in SMEs to large corporates across specific  sectors in areas such as healthcare, transportation and energy etc.”

Fidor Bank has a European license and they are planning to expand into other countries in Europe, however, their tech company has contacts globally and Kroner said that he sees the biggest opportunities in the Asian Market. Kroner, also said that what stood out to him at Sibos this year, is the positive development in delegate attitude towards industry issues and culture.

Although attitudes may be changing, one area that still needs improvement is diversity and in the closing plenary session it was hihglighted that out of 8,000 industry attendees only 25 per cent were women and only 17 per cent of speakers were female. The closing speakers said that awareness in diversity is improving but the industry needs to impove upon these figures.

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