Six newer technology vendors presented their innovations at the third annual FinTech Innovation Lab Demo Day in hopes of revolutionizing the financial services business. Data management, the perennial industry buzzword, was naturally represented by all FinTech program winners.
Companies were selected by chief information officers and chief technology officers from leading institutions, including Capital One, Morgan Stanley, Citigroup, American Express, UBS, Bank of America and more. The six finalists went through workshops and enjoyed feedback and mentoring from their supporters.
[For more on the state of innovation in financial services, read: Where is the Innovation in Trading Technology?.]
This year's FinTech winners covered security, consumer engagement, data analytics and storage. Among the six developers, two stand out as breakthroughs in capital markets:
Often used to automate sports commentary (surprised?), Kris Hammond, cofounder & CTO of Narrative Science created a partnership of engineering and editorial to produce clear English reports from big data. "Firms like big data systems, but it's not insight, it's just more data," Hammond says. "Business leaders need scale, and they need it immediately … We take any kind of data, where the insight has been stuck in the data level, we turn into narrative."
As an example, think of customized end-of-day portfolio summaries instantly produced for upper management and investors, audiences that may want to see the same figures in different formats. Furthermore, rapidly generated texts can be produced at scale, such as individual portfolio summaries for firms with a long client list. Other examples included investment research, in one case producing 35,000 reports per month for a company that previously struggled to manually produce 10. The takeaway: "If you have data, we can tell a story."
It is no secret that tablets are overtaking PC sales, nor that security and regulation on mobile devices are lagging the need to modernize. Meanwhile, Wall Street is powered by thousands of installed desktop apps with annual IT spend of $40 billion. It's a expensive mess that OpenFin CEO Mazy Dar and cofounder Chuck Doerr want to solve with a platform that enables Web applications to run outside-the-browser, while meeting security and compliance requirements of financial institutions.
It's no easy feat, but OpenFin has three main issues covered:
1) No User Installations: Instant application deployment and recall with no installation, even to branch offices, saving IT resources and ability to quickly meet regulatory changes.
2) Synching Corporate Apps: Application integration, because applications are typically part of an ecosystem.
3) Platform Agnostic: Cross Platform support, meaning application can run on both PCs and Mac OS. The possibilities of such a technology are substantial, particularly because it does not limit an institution's application use or ability to access data on mobile.
There's No Place Like NYC
The intention of FinTech goes beyond showcasing the latest innovations. Supporters want to promote New York City as a haven for the financial technology industry. Maria Gotsch, president and CEO for the Partnership Fund for NYC says: "New York City has the largest concentration of financial service firms in the country, why shouldn't it have the most robust financial tech center?"
"FinTech is a great way for us to see what's happening at the leading edge," adds Steve Sparkes, Managing Director, CIO, Technology & Information Risk at Morgan Stanley. Like many of the other big financial firms in attendance, Morgan Stanley has publically contracted with a vendor presented at past FinTech Demo Days.
Mirroring this is Don Desiderato, CIO at New York Life Investment Management who says, "There's no reason NYC can't be the hub of innovation." His institution helped to fund and mentor presenters ScrollMotion and Narrative Science. "What's interesting to me is that with innovation comes talent. The more we have, the more talent there is available to us, and it makes us think of technology in a smarter way."
Monique Shivanandan, CTO and Chief Information Security Officer for Capital One, says her company is upping the ante on the technology side. "We still have a traditional way of saving money, but if you look around at other industries transforming, banking is where the next killer app is going to be. Mobile wallets were going to be it, but it hasn't taken over yet. Whatever it is, the next big app will definitely be in banking and we want to be on it before it's too late."
Now in its third year Laila Worrell, Managing Director of Accenture says FinTech Innovation Lab has reached a terrific cadence, adding that the number of applications has increased each year. "We're also seeing a lot more growth companies with a lot of implementations. The quality we're seeing is really outstanding."
In the first years there were more early startups, but Bob Gach, founder of Accenture, says some companies were so young that they were difficult for banks to interact with. In response to the rising applicant pool, which varies in terms of the maturity, Gach says they made a conscious decision to look at later stage companies. A separate FinTech for start-ups is under consideration.
"When looking at this year's finalists you'll see it's not just point specific technology, it's all coming together," Gach adds. "Mobility and analytics coming together is the big theme. The companies this year brought it to life."