Unquestionably the Financial Services industry is navigating a turbulent time, impacted by the war in Ukraine, a flurry of bank collapses, impending regulation renewal and the possibility of a global recession (take your pick). Combine this with AI-wielding solutions and their applications continuing to grow and make waves across industries. Figuring out how to cut through all the noise and find the most valuable solutions for your organisation is as tricky as ever.
Over the last few years we have worked with over 150 corporate Executives across global banks, payment processors and other Financial Service institutions. One of the questions being asked more regularly is should you opt for a cost-cutting, survival mode or explore new solutions offering technology aimed at growing your capabilities, value and competitive advantage?
Based on these conversations and the topics of interest within our Executive network, we launched and delivered the GrowthBuilders AI in FinTech Edition, in partnership with FinTech Alliance. In this article, we highlight the learnings and experience of our innovators and Executives to answer the question: where will Artificial Intelligence make an early impact on Financial Services and unlock tangible growth?
Louis Williams, Community Manager at FinTech Alliance:
"FinTech Alliance is delighted to have collaborated with GrowthBuilders for their AI &ML FinTech programme. The programme aims to bridge the gap between established financial services and innovative solutions and offered a great opportunity for the FinTech Alliance Community to find partners."
As AI-wielding solutions and their applications continue to grow and make waves across industries, distilling the noise and unearthing the right solution for your organisation is not for the faint-hearted. Furthermore, new buzzwords appear and are overthrown seemingly every month (think NFTs, Metaverse, blockchain), so knowing where to expend energy and make calculated bets all whilst maintaining (and growing) BAU is a challenge. The overarching question being asked was: how do you quickly find the value-drivers relevant to your organisation, at pace?
What was our approach - GrowthBuilders Editions.
The GrowthBuilders team engaged with leaders from large banks and financial institutions to take a deeper dive into their challenges and focus areas. Following consultations and a review of emerging trends, industry activity and market solutions, we confirmed a clear interest towards the adoption of Artificial Intelligence and Machine Learning in Financial Services, with sub categories identified (read on!) within.
We set to work evaluating over 750 innovators, through research, calls and interviews across key challenges such as siloed data, operational efficiency, fraud prevention and customer insights and experience. We selected five high-growth scale-ups with relevant solutions to join the GrowthBuilders Edition - a 5 week innovation and collaboration programme supported by FinTech Alliance, to engage with the leading corporate brands to tackle important challenges and enable rapid growth for both sides.
Through our Executive Events we brought together leaders in Financial Services from large banks and FI's such as Lloyds Banking Group, CitiBank, Northern Trust, JP Morgan, Bank of America and many more well known names, as well as investors and community leaders, to accelerate the understanding and adoption of these new solutions.
What were the solutions on display?
The breadth of AI applications emerging regularly means there is likely to be a solution for every organisation (if not every business unit), whether it's streamlining loan approval processes, mining siloed customer behaviour data or a 24/7 chatbot that delivers automated product penetration through personalisation. The possibilities are vast and the benefits untapped among legacy-riddled organisations.
GrowthBuilders has conducted market mapping of AI solutions across Financial Services. The below overview is a snippet of the value available from our cohort members on display:
Fuse - Supercharging customer experiences:
Customer satisfaction is never out of the spotlight for Financial Services, with banks continuing to shift focus from in-person branches to digital banking, including challenger banks building their identity and offering around it. AI technology is front and centre to collecting, revealing and understanding customer behaviour which drives personalisation of offerings to deliver tailored services and product penetration.
Harnessing the highly-personal transaction data is Fuse, who consider transactions the universal language of banking customers, as they combine natural language processing with otherwise siloed data sets to create meaningful insights that drive growth across product offerings in Financial Services. From BNPL automations that have boosted automated acceptances by 40%, to bespoke vulnerability tags that predict vulnerabilities and subsequent customer arrears for a Tier 1 bank. High-volume data mining that predicts customer behaviour and offers optimal products and services that align with the right customer at the right time is an exciting opportunity of AI technology applications. Fuse is our one to watch for organisations diving deeper into each customer insight and interaction.
Fligoo - Tapping into hidden growth:
Fligoo, who have long been developing AI, have demonstrated sales growth in FS through improved up and cross selling for several Tier 1 and 2 banks within several financial products. With an impressive breadth of applications from card sales, auto-loan, mortgage, credit and insurance customers, Fligoo’s AI solution boasts case studies of 300% sales increases and multi-million pound lifetime value growth. Fligoo demonstrates impressive ROI with large clients driving sales and growth across multiple products.
Bleckwen -Tackling the dark arts of fraud:
The unrelenting battle against financial fraud continues to become more complex, and with so much at stake from regulatory fines to consumer and business trust, GrowthBuilders understands the importance of a solution moving Financial Services in the right direction. AI scale-ups are here to help, offering specially developed algorithms and predictive analysis to detect suspicious patterns and identify financial fraud.
Introducing Bleckwen, focusing on lending fraud prevention, supports banks to reduce fraud losses by 80% and a subsequent 28% in fraud attempt reduction. Bleckwen’s approach to new business was another factor to joining GrowthBuilders FinTech Edition, as they build bespoke business cases to deliver a transparent route towards 400% ROI prior to implementation. Bleckwen offers an open and attractive approach to demonstrable ROI, working closely with prospective clients before implementation to ensure added value through lost revenue is available.
Fennech - Spend more time on what matters:
A host of AI-powered scale-ups are selling the master key to unlocking dramatic efficiency improvements across individual business units, but knowing which ones actually do what you want, can be easier said than done. By automating repetitive tasks or augmenting decision-making processes, scale-up solutions can help financial institutions streamline operations, reduce costs, free-up human resources and enhance customer experiences, there’s so many benefits. With several benefits on offer, deciding where to test worthy efficiency improvements can be time consuming and variably productive.
Fennech, a banking platform-as-a-service offers a complete overhaul of legacy systems for corporates to consolidate and manage multiple banking arrangements. The solution, which recently raised capital from Lloyds Banking Group, addresses key corporate pitfalls like real-time cash flow visibility and legacy systems impeding critical decisions. Fennech, an all rounder, features a range of efficiency improvements that were recently recognised by Lloyds Banking Group’s investment round to expand their solution to new clients.
Prometheus - Accessible AI-powered investing
Finally, democratising accessibility to powerful sustainable investing tools, of recently emerging importance and interest, is a fantastic impactful application of Machine Learning (ML). Prometheus uses industry-proven ML technology to build and manage a multi-asset portfolio for every user based on their personal and ethical values. We chose Prometheus because of its ability to consistently seek alpha, resulting in a return of over 38% in 2022, particularly difficult market conditions.
After discovering so many possible applications of AI technology during our market mapping, we couldn’t include all the amazing solutions out there. In the dramatically shifting landscape of Financial Services in 2023, engaging with emerging scale-ups that utilise AI is not just a wise move, it's a must! By embracing these innovative technologies, financial institutions can unlock the next level of efficiency, expanded horizons, supercharged customer experiences, and combat the ever-updating forces of fraud. If you are yet to find the solutions relevant to you, reach out to GrowthBuilders to learn how we can support your organisation specific challenges and goals.
Key takeaways from searching for AI solutions
We’ve touched on the importance of embracing AI in Financial Services to grow organisations of any size. Here are some initial actions to get started:
1. Problem-led or horizon scanning?
Whether you have a business unit challenge in mind or are exploring opportunities for unrealised growth, both approaches have significant potential to improve an organisation’s competitive position. Identifying value-adding solutions does not have to be unnecessarily time consuming or resource intensive. What tends to happen is a 80:20 split, 80% specific and immediate use cases, with the remaining 20% interesting growth areas and future opportunities. What is very important is ensuring you are solving the right problem! Not all solutions are solvable with scale-ups, we find that the wrong scoping often leads to bad outcomes. Understand your objectives, before putting in the work. We are happy to help :)
2. Embrace experimentation
Following a similar pattern with emerging technology and impending regulation, organisations are understandably sceptical to immediately embrace solutions using AI with full effect. However, many of the solutions we engage do not require the overhaul of internal systems to receive the benefit. Organisations should consider adopting an AI strategy, with criteria that includes a gated implementation approach, requiring solutions to deliver proposed ROI in a trial phase.
3. Knowing how to start
A key challenge to finding relevant and innovative solutions that add value to the organisation is the approach to scouting. Relying on inbound or serendipity alone usually results in lower quality whereas performing targeted outbound gives proven results if you know what you are doing. GrowthBuilders operates a proven method of solution scouting and vetting, increasing the relevance and pipeline by 10x as well as saving you 50% in both time and cost, which is why many executives trust us to deliver valuable insights. If you are looking to deep dive or just dip your toe into the growing pool of AI technology solutions, reach out to a member of the GrowthBuilders team for a brief call.
To find out more or to get in touch, message micah@growthbuilders.io
About GrowthBuilders
We bring curated technology solutions together to collaborate with large Financial Institutions through GrowthBuilders Editions, our platform for hand picked top-tier, later stage tech scale-ups to showcase their products to a targeted network of progressive corporates. We speed up collaboration, co-creation and partnerships by selecting only the very best product ready scale-ups, saving corporates time, cost and increasing ROI through quality.
GrowthBuilders offers bespoke scouting and innovation advisory organisations. The nimble approach, refined from our scale-up and large corporate expertise builds rapid time-to-value.