P
artners Federal Credit Union,
which serves employees and cast
members of the Walt Disney
Company and their families, developed an
app in 2018 offering core banking, cou-
pons from local merchants and an edu-
cation portal where members can hone
their money management skills. The app
encouraged 1,800 new users each month,
a 20% increase in remote deposits and a
64% increase in mobile card payments.
Atlantic Union Bank recently deployed
a cloud-based software as a service (SaaS)
solution to fund over $1.4 billion in US
government Paycheck Protection Program
loans to 6,500 businesses. And in Canada,
Equity Bank’s EQ Bank direct-banking
brand is using the scalability of the cloud
to meet a surge in digital demand, recently
reaching some $3 billion in deposits.
As these cases suggest, the argument for
applying advanced digital technology to
financial services is winning converts like
never before. The Internet of Things and
smart cloud-based integrations, block-
chain and artificial intelligence have long
been understood as a means of automating
key processes; reducing potential errors,
processing times and costs; creating inno-
vative new products; attracting new cus-
tomers and better serving current ones.
Now, the interplay of advanced tech-
nologies and analytics for better decision-
making, improved supply-chain visibility,
risk mitigation and competitive agility are
encouraging new deployments. Meanwhile,
the growth of open banking and increased
competition from new entrants such asGoogle, Amazon, Facebook and Apple are
making it more urgent for traditional banks
to keep pace with change.
The Covid-19 pandemic adds an
extra layer of urgency to the adoption
of smart technology, close observers
note. As economies move past the cri-
sis, businesses will be looking for tech
solutions that help them to reduce costs,
conserve cash and leverage investments.
Research conducted by Bain & Company
before Covid-19 found that 90% of tech
executives view AI and machine learn-
ing as priorities for incorporation into
their product lines, but nearly as many—
87%—weren’t satisfied with their com-
pany’s approach to doing so.FOCUS ON AI
AI will “separate the winners from
the losers in banking,” software com-
pany Temenos and the research group
Economist Intelligence Unit concluded
in a report from June, which found
some 77% of leaders in retail, com-
mercial and private banking saying it
will be the most game-changing area
in fintech. Regulators, too, are adding
to the impetus. The EU General Data
Protection Regulation established a right
to an explanation of the output from new
technologies like AI algorithms, and this
should further propel investment in the
technology over the next five years.
More than 80% of respondents see
banking becoming part of a digital plat-
form of services. While technology has
always had an evolutionary impact onbanks’ business models—from branding to
websites and then to mobile—increased
online interactions with clients allow
banks to enhance their offerings and pro-
vide new levels of engagement and insight
through digital ecosystems.
In May, HSBC announced the launch
of the AI Powered US Equity Index
(AiPEX) family, the first equity index
products directed by AI. The AiPEX
indices were developed by fintech EquBot
and also uses IBM Watson to turn digital
data into investment insight.
“AiPEX with Watson simulates a team
of thousands of analysts and traders work-
ing around the clock to learn from mil-
lions of pieces of information and iden-
tify potential investment opportunities,”
says Dave Odenath, head of Quantitative
Investment Solutions for the Americas
at HSBC Global Banking and Markets.
“In today’s markets, investors need strate-
gies that can keep up with the growing
amount of data being generated each day.
We are now able to offer clients solutions
that not only keep up, but thrive, in an
increasingly complex world of data.”
Elsewhere, established vendors includ-
ing BankTrade, Finastra and Surecomp
are offering a variety of trade finance
solutions. Both Intellect Technologies
and Premium Technology provide sup-
ply-chain finance solutions, bolstered
by the third-party technology platforms
PrimeRevenue, GT Nexus and Tungsten.
For those looking for a silver lining
in the recent lockdowns, there’s a con-
tender. ■Smart Finance’s
Big Surge
The practical requirement for more-efficient
digital operations and client interfaces—and
now pandemic-induced lockdowns—have put
smart digital on fast forward.
By Deborah Ritchie40CORPORATE TREASURY SUPPLEMENT 2020 |^ SMART FINANCE