If you’re a fintech startup, your dream might be to get picked up by a bank. But the starting point isn’t always clear. Negotiations can fall through if your solution doesn’t meet compliance or is difficult to commercialize or integrate with the bank’s existing systems.
To get you past that hurdle, here are the most popular one of ytrends in fintech which banks like OCBC Bank want to adopt urgently.
Digital tools in wealth management
A firm’s savviness in using and providing digital tools, or digital savvy, can impact its bottom line. 72.9 percent of high net worth individuals from around the world say that digital maturity is significant in their decision to increase their assets with a wealth management firm over the next two years, according to the 2016 World Wealth Report.
The fastest way to show digital maturity would be working with startups that develop wealth management tools. Such digital tools should enable wealth managers to automate or eliminate low-value back office, operational and administrative tasks, and focus more on client-facing activities.
Singapore’s longest established bank, OCBC Bank, has a foot in this trend and wants to commercialize fintech solutions. Wealth management is one of their key focuses and technologies in this trend will catch the bank’s attention.
OCBC Bank is working with a startup, Fincast, which creates technology that allows bank relationship managers (RMs) to construct goal-based advice for clients. Fincast was one of the startups selected for OCBC Bank’s inaugural 12-week accelerator called The Open Vault at OCBC Fintech Accelerator in 2016.
“The future of financial advice is bionic – a hybrid model combining technology with the human touch,” says Chelsea Dunne, co-founder of Fincast. Their core markets are Southeast Asia and Australia.
“Regardless of whether a client has $50,000 or $50 million, they want robust, goal-based advice that’s transparent and easy to understand.”
New data points for credit and financing
“Credit and financing are the bread and butter of banks’ businesses,” says Altona Widjaja, vice president of OCBC’S fintech and innovation arm, The Open Vault at OCBC, who has worked with a number of startups from ideation to the pilot testing stage. “We see collaboration possibilities in this area using any new data point, be it from telcos or social media.”
Credit and financing is the bread and butter of banks’ businesses.
Augmenting the bank’s data with external data can give alternate assessments of consumers’ credit scores.
For example, a person’s online reputation or professional connections can be considered when giving a loan. A person with a spotty employment history may find it harder to apply for and receive a loan. Creating new data sources is one possibility startups can potentially address.
Streamlined operations with artificial intelligence
Startups can consider artificial intelligence in banks to reimagine operations. Large banks currently face the problem of processing large amounts of data to create financial reports and fulfill regulatory requirements. Low-value tasks, such as aggregating financial statements for a business group, can be replaced with AI.
AI can also potentially be trained in strategic areas like financial analysis, asset allocation, and forecasting, according to Forbes.
Widjaja says that AI can help OCBC Bank to service customers better. Take “Emma” for instance. The specialized home and renovation loan chatbot is available 24/7 to interpret questions from consumers and reply rapidly. And Emma doesn’t just answer questions – 10 percent of chat sessions have been converted into mortgage loan sales prospects.
Emma was jointly developed by startup CogniCor and OCBC Bank senior management and business leaders during The Open Vault at OCBC Fintech Accelerator last year.
The AI bot was trained to deal with all possible scenarios after a three-month co-creation process.
“Both Fincast and CogniCor were participants of our first accelerator program and we are very happy to have this collaboration to launch a service to our customers with them,” says Widjaja.
OCBC Bank is eager to work with more startups on interesting technology. After ideation, startups need to undergo compliance and integration with the bank’s tech. But when it finally reaches commercialization, the months of effort will pay off.
Pranav Seth, head of e-business, business transformation and fintech and innovation group in OCBC Bank will be giving a talk on the Startup 101 Stage on Day 1 (May 17) of the Tech in Asia Singapore Conference alongside Arnaud Bonzom, director of corporate innovation at 500 Startups.
He’ll speak on how to work with corporates like OCBC Bank. Startups will understand when to partner and when to walk away. The talk will also cover negotiation tactics, choosing clients, and selling a new service to a traditional business.
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