JJ Hornblass, Royal Media CEO

Hi, everyone. I’m JJ Hornblass and welcome to Fintech Unfiltered, from Bank Innovation, the leading digital news service on banking and fintech. This is our weekly wrap for what’s happening in banking. In addition for the week of October 26 2020. Our thanks before we begin, goes to Bank Innovation advertisers Blend, Mambu and Q2ebanking for their support. Thank you so much. And I am pleased to be joined by Bianca Chan and Rick Morgan from the BI team. It is Friday, October 31 2020. This week, it was the last week of the exhausting presidential election campaign, with many Americans, including some of our colleagues already casting their votes and doing so at record levels. US households increase their spending by 1.4%. In September, according to data that was released just this morning, actually, this was the fifth straight month of household spending increases as remaining pandemic aid helped boost incomes by point 9%. The GDP came out for 2Q yesterday. 3Q yesterday, and it showed sorry about that 3Q yesterday, and it showed that the economy grew at a record pace last quarter, recovering a good chunk of pandemic losses but still below where it ended last year. Amazon reported $96.2 billion of revenue for the third quarter a year over year increase of 37%. Also this week, Apple reported an all time high of 585 million paid subscriptions for its services last quarter, growing that number by 135 million on a year over year basis. The company said it was on track to reach 600 million paid subscriptions by the end of this year. And finally, a 45 year old West Virginia and fitness instructor groke a Guinness World Record by completing 34 pull ups in one minute. She and her husband had been passing the time they said during the COVID lockdown by completing fitness challenges. She clearly completed the fitness challenge of COVID lockdown 34 pull ups in one minute, just slightly better than I think both Rick and your Bianca’s best performances. 

This week, we want to spend some time giving a bit of a preview for Banking Automation Summit, our event that’s going to be taking place week after next and discuss some of the major themes that we’re going to be presenting at the conference, this after spending a lot of time this week, doing some preparation for the event. We this week, you spoke Bianca to Bank of America, and the founder of its Erica chatbot automated chat bot. So how does Erica and the Bank of America initiatives around it, what are the key automation trends that they that they reveal? 

Bianca Chan, deputy editor at Bank Innovation

So it’s Christian Kitchell. He’s the head of AI solutions and Erica group at Bank of America. Now, the thing that the industry analysts have previously said, makes Erica stand out among her peers is the ability to go just beyond the simple FAQ’s the to handle more sophisticated tasks. And in order to do that, there was quite a bit of rewiring and API work that the group had to do in order to kind of connect the bank’s different systems to support the different ways that customers can reach Erica, and the different platforms throughout the bank that she’s kind of expanding into. And so I would say that, it’s really kind of the insights, the proactive advice, and then facilitating that action that they’re currently working through something that they’re that Christian called out was this tri modal approach. So reaching Erica by text, by voice, and by blast, and that obviously took a lot of connecting of different systems and data sources. And they’re working to bridge that gap, currently in the short term right now, to get these avenues at to the call center reps. So that any issue that Erica canceled, that can kind of be seamlessly handed off to to a human, which does kind of echo what we’ve been hearing in our pre conference calls is this kind of this melding of humans and machinery, so you don’t just have you know, these automated processes, and then this human led processes that it’s supposed to be more in concert with one another or in collaboration.

JJ Hornblass 

I think he said, I think it was, Erica has had about 16 million interactions to date. And, you know, the volume of that data is just unbelievable. But still, it’s still in an evolutionary phase. Is there a sense for how many more interactions are needed in order to get to this more holistic, you know, full service automation paradigm that I think is is kind of the goal?

Bianca Chan  

Maybe it should be the goal. But you constantly hear time and time again, people say human intervention is key in every single kind of automation project that you have. So I don’t know if it’ll ever be 100% fully automated. But in terms of getting a sense of when, you know, there will be enough data for you to kind of handle the and to provide the bank with this holistic view of the consumer. I think we have a bit more time. I mean, Bank of America might be closer than that other banks chat bots and other credit unions, chat bots. But I think it takes a few years to first get down the basics, the foundations of providing the FAQs, and then also rewiring the backend system so that you can provide those avenues of communication to to finally get to the more sophisticated tasks like providing the insights and understanding that the consumer can.

JJ Hornblass

Yeah, Truist, the notion is to create automation. Well, first of all, there’s many parts to it, right? That there there, it’s, it’s like this underpinning to all customer experience. But for them, they look at like one aspect of it is really deep back end. And that is to allow for what they call self healing, or self curing of systems, or fail over in an automated fashion. So that if if their systems are failing, there’s like a touchless cure that takes place. And in fact, they’re, you know, one of the avenues for that is to actually go back to like an AWS environment, and using that to allow for this kind of like, you know, self heal self cure. So it you know, the, the automation has, like many different levels, even if, as you’re saying, as you you kind of implied that it is there’s a pervasiveness and it’s not just like, only front end, only back end, whatever. But still, it does go to different spheres of technology at the financial institution. And there are opportunities to add automation at all these different levels. Is that something that he talked about as well?

Bianca Chan  

So directly, honestly, the self healing thing is really interesting to me. Because if you think about it, that’s almost like the, the safety net, right? When their systems fail, the automation picks it up. But that that’s going to have a ton of maintenance, because if that’s your last kind of your, that’s your safety net, that’s the last line of defense, like, you’re going to need to make sure that it is fully operational up and running, no matter what the scale is, no matter what the situation is. So that’s honestly really interesting. And then the fact that they would have such a critical component, as you said, in the AWS environment, I mean, you hear so much of these banks saying that they want to keep the super critical processes on prem, within their own kind of house that they’ve kind of built. So that’s interesting that they’re taking that yes. Maybe moving that to the cloud.

JJ Hornblass 

Is it your your piece about that related to Erica point, mentioned how like the bill pay function required access to 26 different databases, and rake use, you wrote about a couple of startups that focus on on facilitating, I guess, database integrations or synthesis. What are the mechanics around that? Like, what are the mechanics around that in facilitating automation?

Rick Morgan, news editor at Bank Innovation

Well, it’s interesting the companies that I talked to, one was called Skan, and one was called C3. And it just involves a lot of watching and a lot of ingesting data both in and outside of the bank, C3, which actually works with Bank of America, and Standard Chartered and a few other big names. They spoke a lot about how in order to create a more holistic and deep relationships with customers through your CRM system, you need to ingest data not just from the bank, but also outside of the bank. So they take things like market fluctuations, interest rates, they use social media, they take those things and they can sort of guess what your client is going to do during certain market fluctuations during different times with a look at things in the past and the learns. And that sort of enables banks to go from, oh, I haven’t talked to this person in three months. Call them to, Okay, last time, the markets were just like this, and they, you know, want this amount of income or gain this amount of income and they, whatever they did x and so I know what to offer them at this time. So that was really interesting to me, the other company was called Skan. And they’re basically automating the role of the consultant. What they do is they, they look at what employees are doing, just, you know, look at their screens and see how they work from screen to screen with the screen. The screen processes are like, how do they input information? How do they go from putting things from email into their work systems? And how efficient is that or not? And they sort of come up with more efficient ways of doing things just like an analyst or consultant with an organization. And it was a really interesting way to sort of think about these problems.

JJ Hornblass  

Yeah, I mean, that I think that falls under the general category of robotic desktop automation, where you’re, you’re looking to infuse the desktop action on the part of the banker with, you know, elements of automation, I guess that’s what you meant. Where you said that we don’t, they don’t want to take the person out of it. If so much of the desktop, exercise is automated. Yes, there is a, there is a person involved. But, but still, you know, probably, at some point really can’t can’t execute the job, you know, without the automation elements.

Bianca Chan 

Best way to describe it, is think of it as like a car manufacturing plant. So you have the having machining machinery, obviously, humans can’t with cars, but you have the humans in the process. Think about it, or maybe as like, as like an assembly line. So it’s really, I don’t know, if we’re quite there yet with it. We’re still trying to figure it out in financial services industry how to make the to, like the human as the robot complimentary rather than separate.

JJ Hornblass 

Yeah. What other themes could be expected touch on at Banking Automation Summit?

Rick Morgan 

I think we’re going to talk a lot about robotic process automation, machine learning, and just how that sort of implemented on the back end to make things more efficient, and where some of the pain points are. And I’m sure we’re also going to touch on, you know, front facing things. I’m sure there’ll be a lot of thought about chat, talk about chatbots. I’m sure we’re going to talk about how to make those just less frustrating for customers, because obviously, they are learning but as an analyst I spoke with today said for a story that I’m working on in the future TV, more on that to come. But the analysts are basically saying that yeah, these chatbots are learning but it’s the customers who are feeling the pain of that right now. Because they’re the ones who it’s getting tested on. And how do we make it so that a it’s just more efficient? How do we make it so that when a customer does get frustrated and gets passed off? To the customer service rep? I mean, that’s a hot customer as well, this analysts call it how do you make sure that that poor customer service rep has all the information at hand, so they don’t need to take a frustrated customer and make them repeat everything they just gave to that chatbot? So I’m sure that will come up. 

Bianca Chan 

I was just gonna say another thing that you can expect to hear it at a Banking Automation Summit is the next wave of RPA. So if you are kind of reporting through through the months, it sounds like RPA most applications have it today. Robotic Process Automation is, you know, simple tasks, programmed to handle. Yeah, specific tasks, like single specific tasks. And so looking at what, what is the next wave of RPA look like? How does it work in concert with other emerging technologies? And how do we make it so it’s not a one for one solution, but maybe more like, as a service type type deal?

JJ Hornblass 

Sounds good. What are we going to be reporting on next week before BAS?

Rick Morgan

I was just gonna say we’re gonna take a look at some new numbers from some of the big payment providers out there Venmo and Zelle, p2p, obviously a big turf war going on. So we have some some new figures around that.

Bianca Chan  

And then also taking a look at Tuesday’s is the election day. So we’re going to be taking a look at some of the potential impacts of what the results could have on the industry.

JJ Hornblass

All right. Well, thank you both. And thank you all for joining us. Please rate, Fintech Unfiltered wherever you listen to your podcasts. And and of course, visit us at finainews.com and as well on Twitter and LinkedIn. Great to have you. Thanks again. We’ll see you next time.