How Google Keeps Changing Financial Marketing

STEVE COCHEO | January 22, 2020

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20 years ago Google began taking advertising, and what started as a search engine became a marketing behemoth. Google now wields outsize influence over the marketing profession, not all for the good, many feel. The company has massive influence over how consumers connect with financial brands. As privacy issues keep arising, how much further can the company go?

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Summit Trail Advisors

Our investment process has two parallel processes that come together when constructing your portfolio. Our centralized advice team is constantly researching economies, capital markets, and strategies for the best investment outcomes. Your advisor team builds the relationship by listening to gain a clear understanding of your financial attributes and personality. The attention our advisors can spend on investments, combined with the time our research team can also spend directly with you, brings portfolios to life. This interaction is unique, and the foundation of our boutique investment process.

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DEMYSTIFYING AI IN BANKING: THE CASE FOR A UNIFIED STRATEGY

Article | June 4, 2021

Digital transformation can mean different things to each financial institution (FI). For some, it’s a push to modernise legacy systems and acquire fresh talent. For others, a journey to adopt an organisational strategy that unites departments and teams. No matter the motive, nearly all FIs want the same result—to drive efficiency, revenue and cost savings. For many forward-thinking FIs, artificial intelligence (AI) is a key part of this process. At first, implementing AI can feel like an arbitrary effort that requires too many stakeholders, too much technology, and too big a transformation. Yet, as AI in banking matures, it brings the potential for higher-complexity solutions that generate positive ROI across business segments. A recent financial services study showed that 85 percent of respondents had successfully implemented AI within their organisation. [i]An additional 64 percent plan to use AI across a wide variety of use cases including process automation, risk management, and new revenue generation. These studies prove that AI is not only becoming more mainstream, but is necessary to help FIs achieve their business goals, strengthen customer relationships, and remain competitive. To demystifying AI and reap its benefits, FIs must embrace a multi-functional strategy that sparks innovation and encourages collaboration. The three use cases below show how AI can be implemented to most immediately impact a financial services organisation. Elevating employees, not replacing them AI has historically created fears of job loss and obsolescence. However, within financial services, AI is well equipped to automate manual and repetitive tasks - such as rekeying data - rather than autonomously make critical financial decisions on behalf the organisation. Due to the complexity of the decisions, degree of regulation, and importance of qualitative factors these tasks are – and for the foreseeable future will be – better managed by employees. A key use case of AI for automation is the utilisation of optical character recognition to streamline the process of spreading financials when underwriting commercial loans. Previously, credit analysts would have to invest hours painstakingly transferring borrower financial data into various systems, reducing time for holistic credit analysis and increasing loan underwriting times. However, by employing AI-driven solutions in combination with powerful workflow automation, banks have been able to significantly increase efficiency in lending processes, reducing processing and cycle times by more than 50 percent and seeing a 10 percent increase in front-office capacity to focus on true value-add analysis and customer relationships. [ii] Additionally, AI has the ability to empower bankers, not only by eliminating manual tasks, but also by being able to equip them with powerful insights around relationship profitability and credit risk. By refining sophisticated, machine-learning based models, banks can more accurately predict and leverage metrics such as probability of default and loss given default within risk-based pricing models to provide competitive lending rates to borrowers, while still maintaining healthy profitability at the relationship and portfolio level. Reshaping customer engagement The acceleration of digital banking due to the COVID-19 pandemic and the rise of customer-centric titans have put significant pressure on financial institutions to modernise and reshape their approach to digital banking to appease rising customer expectations. Customers not only expect a frictionless and seamless onboarding process, but for their bank to act as an ever-present financial advisor, offering personalised insights on spending habits, money management and financial decisions. AI-powered virtual assistants and chatbots offer new levels of accessibility to common questions by utilising natural language processing to find past transactions, access credit scores, and view balances. However, institutions can take a further step of both anticipating customer needs and offering targeted product suggestions based on propensity scoring models. Proactively offering recommendations can be helpful to customers due to the complexity of different financial products and enables banks to simultaneously satisfy customers while unlocking new revenue opportunities. FIs can leverage AI to operate as a dedicated advisor, offer a differentiated customer experience, and reduce customer churn. However, equally important to the underlying predictive models is having a single, end-to-end platform to drive direct actionability by delivering insights to the right banker at the right time. Boosting back-end efficiency In addition to empowering employees to focus on true value-added activities, AI offers enhanced methods to improve operational efficiency and risk management. Analysis of IDC data shows that AI technologies can improve the cost efficiency of financial institutions by over 25 percent across IT operations[iii]. As a part of fraud detection, institutions can leverage AI to oversee thousands of transactions and efficiently flag anomalies that are indicative of fraud. Historically, transaction monitoring has struggled with false positives, through which genuine transactions are incorrectly flagged. However, through machine learning, actual, fraudulent transactions can be compared to false positives, which can then be fed into the model, improving accuracy over time as the system incorporates learned, differentiating factors. Finally, the COVID-19 pandemic has caused institutions to revaluate how they assess credit risk and problem loan management. Lenders have had to segment their portfolio by geography and industry to differentiate sectors which were more severely affected by the pandemic versus those that were less challenged. Additionally, there is now a greater emphasis on utilising real-time and transactional data in addition to other data sources to truly understand business performance and borrower resilience. As the uncertain pandemic recovery continues, leveraging AI-powered predictive models in combination with delinquency tracking, credit migration modelling, and other tools will continue to be critical to align actual portfolio risk with the risk appetite of the institution. As AI adoption continues to mature, FIs should avoid sporadically focusing on isolated use cases. Instead, organisations should strive to align strategy, organisational culture, and digital infrastructure under a united AI strategy. This will help enable them to capitalise on revenue growth, operating efficiency and cost savings, from the front to the back office, and across all lines of business.

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Artificial Intelligence With Mobile Banking Is Reshaping the Future of Banking and Finance

Article | April 10, 2020

This is the flourishing time for financial services. The concept of interrelated technologies is developing and is brought forward due to the disruption in the industry such as that of cloud computing, data science, biometrics, and blockchain. However, most of the change has been brought about in the banking sector due to the introduction of artificial intelligence (AI). It is being expected that AI will bring a significant change in the industry in the near future and all of it will be significant.

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How Lending-as-a-Service Can Impact Small Businesses in Need

Article | March 31, 2020

One of the brutal facts of the COVID-19 outbreak is that it will be difficult for small businesses to survive. The self-distancing and shelter-in-place orders, while temporary, are taxing for already cash-strapped merchants. Adding to the hardship, small businesses may find it especially difficult to get a much-needed loan from their local bank or credit union since many have closed physical branches to encourage social distancing. And while banks offer many services online, only 1% are capable of extending a loan digitally.

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Fintech in 2021: 5 Fintech Trends Shaping the Banking Industry for Good

Article | March 12, 2021

The Fintech industry is consistently regulating itself since its inception. The industry has become a game-changer since the pandemic caused every consumer to look for convenience in daily transactions. Recent situations have created a necessity for Fintech companies to empower financial institutions as digital transactions soar to an all-time high, with the Indian Fintech sector at the forefront, contributing the highest in CAGR (Combined Annual Growth Report) globally. According to the market research report of March 2020, Indian and Chinese markets contributed the highest in Fintech adoption rate (87 percent) out of all emerging markets worldwide. These numbers are a green signal for the industry to roll up its sleeves as market researchers expect the Fintech market to reach INR 6207.41 billion by 2025 in India. As the Fintech world sees an all-time high upsurge, this article covers the list of 5 Fintech trends to look out for that will shape the banking industry. But before that, let's take a look at what Fintech is, and what value it can provide. What is Fintech Fintech is an abbreviation of Financial Technology and refers to the emerging technologies in finance that provide improved business solutions to clients, and a convenient way to transact. Fintech helps customers to interact and exchange value with businesses more efficiently. Fintech is neither a software, nor a brand name. You can describe Fintech as a collection of technological advancements in the financial sector to ease up transactions. Fintech trends help customers do banking in a faster, smarter, and efficient way. Fintech is on a bull run with the ongoing pandemic covering the finance industry and making users pay without wasting any time or physically being present. With Fintech, financial institutions use technologies like blockchain, artificial Intelligence, biometrics, electronic and mobile payments, etc., to make their business more efficient, helping them interact with their customers effortlessly. New upgrades and innovations in Fintech allow businesses to integrate their financial accounts with secure mobile applications. Receiving and making payments, alerts, and tracking invoices have become swift due to this integration and allow users to undertake time-intensive activities within seconds. With the help of Fintech, you can sell or buy products and pay for them from anywhere around the world—that is how Fintech is changing the world. 5 Fintech Trends That Are Shaping the Future of Banking Financial firms are aggressively taking on Fintech Financial firms and banks are adding new features in their cashless transactions to fit this pandemic-hit economy. Fintech offers convenience to customers as it has multiple options to choose for cashless transactions like mobile wallets, QR codes, contactless payments, etc. It provides a speedy process for payments and digital loans and can create dynamic growth in financial services. This acceleration will continue to groom the investments until banks and Fintech become interwoven. Now, it is just a matter of time for Fintech to emerge as one of the most booming industries. Blockchain and Big data Although blockchain and big data are on a bull run, there are miles to go before it enjoys a major slice of the market. This full swing of blockchain and big data may disrupt if challenges like cyber-attacks and fraudulent activities don't get addressed. To help overcome these obstacles, financial services adopting blockchain technologies can utilize Fintech. This implementation will help reduce fraudulent activities, phishing, and cybercrimes while generating trust with the customers. Looking at all the advantages that Fintech offers, banks adopting blockchain technologies will benefit the most out of it. Artificial Intelligence & Machine Learning Additional fields where the Fintech industry has to shift its attention are AI (Artificial Intelligence) and ML (Machine Learning), where there is a lot of room for growth. Progressively, Fintech brands rely heavily on AI technologies to reduce costs and monitor transactions closely. Experts predict AI will lower the cost of financial services up to 22 percent in the next five years. Through Machine Learning, banks can offer ease of use to their customer with speedy transactions, automated trading processes, and secure payment processing. Providing multiple services on a Single Platform Instead of downloading a separate app for each financial service, any customer would prefer to have a single platform that can do everything. Many banks have already taken a step to offer multiple services across one app. It may increase the cost of building such apps with powerful API integration, but soon enough, it pays off as most financial services will turn to those banks that offer 'single platform, many features' apps. Some financial institutions may not deliver this kind of app, but the Fintech industry is sufficient to meet their demands. Fintech becoming 'the new normal.' The Fintech industry is slowly taking a step towards the general community of consumers. As the need for secure payment processes and easy accessibility of transactions keeps increasing, so does the value of Fintech serving these demands. Adoption of data analytics will garner a massive Fintech market in the upcoming days. According to market research experts, banks have already started providing financial services with a customized and local offering to their customers by closely watching market movements and data analytics. What should we expect from here? As the need to balance the demand and supply of financial transactions keeps increasing, payments and the banking sector need to keep up the speed. It is only a 'wait and watch' game to see to what extent the Fintech market grows. Frequently Asked Questions What is the next big thing in the Fintech industry? AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms. What's new and trending in the Fintech industry? Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics. What are the benefits of Fintech for banking? Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech: • State-of-the-art security and compliance • Better speed in transactions • Enhanced transparency • Reduced costs { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "WHAT IS THE NEXT BIG THING IN THE FINTECH INDUSTRY?", "acceptedAnswer": { "@type": "Answer", "text": "AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms." } },{ "@type": "Question", "name": "WHAT'S NEW AND TRENDING IN THE FINTECH INDUSTRY?", "acceptedAnswer": { "@type": "Answer", "text": "Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics." } },{ "@type": "Question", "name": "WHAT ARE THE BENEFITS OF FINTECH FOR BANKING?", "acceptedAnswer": { "@type": "Answer", "text": "Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech: State-of-the-art security and compliance Better speed in transactions Enhanced transparency Reduced costs" } }] }

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Spotlight

Summit Trail Advisors

Our investment process has two parallel processes that come together when constructing your portfolio. Our centralized advice team is constantly researching economies, capital markets, and strategies for the best investment outcomes. Your advisor team builds the relationship by listening to gain a clear understanding of your financial attributes and personality. The attention our advisors can spend on investments, combined with the time our research team can also spend directly with you, brings portfolios to life. This interaction is unique, and the foundation of our boutique investment process.

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