SEC Probing Hedge Fund Role in Mortgage-Bond Deals

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U.S. securities regulators are investigating hedge-fund firm Magnetar Capital LLC, which bet on several mortgage--bond deals that wound up imploding during the financial crisis, according to people familiar with the matter. While Magnetar has faced scrutiny over its role in various collateralized debt obligations, or CDOs, the Illinois firm itself now is a target of an investigation by the Securities and Exchange Commission, these people said...

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Lake Street Advisors

We are an established advisor of high-wealth family clients, dedicated to your specific wealth management goals. Recently, we began an exciting partnership with Focus Financial Partners that will allow us to continue growing while better serving our clients’ needs. Lake Street Advisors has always been an independent wealth management firm, meaning we are not tied to any products or managers and accept no commissions. As a new partner of Focus Financial, we join an international consortium of other independent, fiduciary wealth management firms that share the individualized focus and dedicated service model we are committed to delivering to our clients every day.

OTHER ARTICLES

How Mentorship Makes all the Difference for Next-Gen Advisors

Article | July 1, 2020

According to a recent CNBC study, only half of American workers report having a mentor, and those who do enjoy greater job satisfaction than their peers who are doing it alone. In fact, 91% of U.S. employees who have mentors say they are satisfied with their jobs. Mentorship is especially important for young financial advisors who are just starting out, trying to get a foothold into the world of wealth management. There’s a lot to learn, and not a lot of room for trial and error. As a result, many would-be advisors give up when things get tough. That’s where mentorship can really make a difference.

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Five Application Scenarios of AI in Banking

Article | July 1, 2020

Over the past decades, banks have been improving their ways of interacting with customers. They have tailored modern technology to the specific character of their work. For example, in the 1960s, the first ATMs appeared, and ten years later, there were already cards for payment. At the beginning of our century, users learned about round-the-clock online banking, and in 2010, they heard about mobile banking. But the development of the financial system didn’t stop there, as the digital age is opening up new opportunities — the use of Artificial Intelligence. By 2023, banks are projected to save $447 billion by applying AI apps. We will tell you how financial institutions are making use of this technology in their operations today. AI-powered chatbots Chatbots are AI-enabled conversational interfaces. This is one of the most popular cases of applying AI in banking. Bots communicate with thousands of customers on behalf of the bank without requiring large expenses. Researchers have estimated that financial institutions save four minutes for each communication that the chatbot handles. Since customers use mobile apps to carry out monetary transactions, banks embed chatbot services in them. This makes it possible to attract users’ attention and create a brand that is recognizable in the market. For example, Bank of America launched a chatbot that sends users notifications, informs them about their balances, makes recommendations for saving money, provides updates to credit reports, and so on. This is the way the bank helps its clients to make informed decisions. Another example is the launch of the Ceba chatbot, which brought great success to the Australian Commonwealth Bank. With its help, about half a million customers were able to solve more than two hundred banking issues: activate their cards, check account balances, withdraw cash, etc. Mobile banking AI functionality in mobile apps is becoming more proactive, personalized, and advanced. For example, Royal Bank of Canada has included Siri in its iOS app. Now, to send money to another card, it’s enough to say something like: "Hey, Siri, send $30 to Lisa!" - and confirm the transaction using Touch ID. Thanks to AI, banks generate 66% more revenue from mobile banking users than when customers visit branches. Banking organizations are paying close attention to this technology to improve their quality of services and remain competitive in the market. Data collection and analysis Banking institutions record millions of business transactions every day. The volume of information generated by banks is enormous, so its collection and registration turn into an overwhelming task for employees. Structuring and recording this data is impossible until there is a plan for its use. Therefore, determining the relationship between the collected data is challenging, especially when a bank has thousands of clients. There used to be the following approach: a client came to a meeting with a bank employee who knew their name and financial history and understood what options were better to offer. But that's history now. With the wealth of data coming from countless transactions, banks are trying to implement innovative business ideas and risk management solutions. AI-based apps collect and analyze data. This improves the user experience. The information can be used for granting loans or detecting fraud. Companies that estimated their profit from Big Data analysis have reported an average increase in revenue by 8% and a reduction in costs by 10%. Risk management Extension of credit is quite a challenging task for bankers. If a bank gives money to insolvent customers, it can get into difficulties. If a borrower loses a stable income, this leads to default. According to statistics, in 2020, credit card delinquencies in the U.S. rose by 1.4% within six months. AI-powered systems can appraise customer credit histories more accurately to avoid this level of default. Mobile banking apps track financial transactions and analyze user data. This helps banks anticipate the risks associated with issuing loans, such as customer insolvency or the threat of fraud. Data security According to the Federal Trade Commission report for 2020, credit card fraud is the most common type of personal data theft. AI-based systems are effective against malefactors. The programs analyze customer behavior, location, and financial habits and trigger a security mechanism if they detect any unusual activity. ABI Research estimates that spending on AI and cybersecurity analytics will amount to $96 billion by the end of 2021. Amazon has already acquired harvest.AI - an AI cyber security startup - and launched Macie - a service that applies Machine Learning to detect, sort, and structure data in S3 cloud storage.

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How to grow your customer base

Article | July 1, 2020

Need more repeat customers? You’re not alone. Businesses of all sizes struggle to win over new shoppers and to inspire brand loyalty in the ones they already have. Pulling off both at the same time is even harder. The key to growing this group is acquiring and retaining new customers. While marketing plays a role in the process, sales and support teams are typically responsible for winning and keeping new users.

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Tracking the Future of Cross-Border Payments with AI ML and Blockchain

Article | July 1, 2020

The global payments landscape is undergoing a massive reorganization. Industry researchers and analyst groups attribute this seismic change to many factors. Technological advancements and competitive forces have proved to be the biggest transformational forces in the payments industry that have combined together to meet both consumer demands and standard banking regulations.

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Spotlight

Lake Street Advisors

We are an established advisor of high-wealth family clients, dedicated to your specific wealth management goals. Recently, we began an exciting partnership with Focus Financial Partners that will allow us to continue growing while better serving our clients’ needs. Lake Street Advisors has always been an independent wealth management firm, meaning we are not tied to any products or managers and accept no commissions. As a new partner of Focus Financial, we join an international consortium of other independent, fiduciary wealth management firms that share the individualized focus and dedicated service model we are committed to delivering to our clients every day.

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