Myra Thomas
Hi, everyone. I’m Myra Thomas and welcome to The Buzz from Bank Automation News where we explore how automation technology is transforming the banking industry. This is our weekly wrap for what’s happening in the industry this week. And before beginning I’d like to give a big thanks to our sponsor Volante Technologies. Thanks so much for your support. I’m pleased to be joined today by Lorraine Lawson and Jaspreet Kalra, associate editors here. It’s July 16 2021. And here’s what’s happening in general technology news.

First off, we got a really interesting tweet from Square’s Jack Dorsey, talking about the creation of a Bitcoin like financial services business. His tweet said, specifically that squares building an open developer platform with the sole goal of making it easy to create non custodial permissionless and decentralized financial services, calls out to swear obviously did not get us any additional information, but Ben is reaching out to them next week, which they’ll have an additional announcement involving something else. So stay tuned for that. Federal Reserve Chair Jerome Powell said there are risks from stable coin and they’re looking to further regulate it, for safety for consumers. valuations for funding, valuations and funding amounts for fintechs. continued to soar, including, and this will be mentioned in one of our stories today the $800 million series a round for revolute. Taking its valuation to 33 billion. Intel is rumored to be in talks to buy chip manufacturer and global foundries for 30 billion as well. And Indian company pate pay tm filed with the country’s regulators for $2.2 billion IPO. Digital payments company has such well known backers as Alibaba and financial Berkshire Hathaway and of course off back this week, American Express also announced a pilot of its first and new self service digital planning tool. Working alongside with start a startup bodes well to create it. And here are some of the bigger news items that the editorial team here at band worked on this week. Obviously earnings news from some of the big banks to front state just free. You had a chance to delve more deeply into those and wrote up a number of stories for us. Can you talk a little bit about especially about the developments of Bank of America?

Jaspreet Kalra
Sure, I mean, so from like a wide angle lens banks that have continued to report better performances as compared to what happened last year when the pandemic hit. And they’re slowly sort of releasing their pandemic reserves as well indicating that they’re sort of overall bullish on the recovery of the economy so far, but what took sort of center stage in the Bank of America’s conference call and their earnings as well as that they’ve reported very strong digital growth. For example, they 85% of all of their book mortgages came in through digital channels and the spirit specifically that Erica continues to grow by leaps and bounds. Now Eric, is their AI conversational chatbot. And their usage grow by grew by 47% on a yearly basis. And it’s not just on the retail banking side like Erica power capabilities have also now, when integrated at financial advisor workstations at Merrill Lynch. So what visible is that Erica’s backbone is sort of expanding within Bank of America, that a lot of those functionalities are now seeping into things like wealth management, financial advisory, XYZ. And Goldman Sachs also made a specific comment about the tech strategies, where their CEO said that they’re in the third innings of their tech driven efficiency gains, and they sort of see it when things come to scale, the unit costs will keep coming down and sort of the prop the process only gets better from here.

Myra Thomas
Yeah, I think you’ve noted that there was a significant reduction in staffing at Bank of America. And they Yeah, they played all towards tech, automation gains and driven gains through technology, correct?

Jaspreet Kalra
Yeah, so Bank of America said that they gave us 2500 full time employees this quarter. And as a notable chunk of it came through tech driven efficiencies. Now, the sort of complimented this comment by saying that what’s happening is, while there is expansion in front office, hirings that handle sales relationships, XYZ, there is a reduction in back office hiring. So like back office positions, which is more about the routine tasks, which is where we really see automation, playing a bigger role in those routine repetitive tasks that can be quickly digitized.

Myra Thomas
Not Did you get a sense set some of the other banks were making sort of similar claims as far as staff reductions and beefing up front office.

Jaspreet Kalra
Yeah, so Wells Fargo made a comment that was very similar to this, that they’re sort of streamlining their entire process, and their focus will be on like a mobile first strategy. And using clouds and FinTech sort of competition to see how the bank readies itself for the future. jp morgan sort of did not comment on this directly. But what was interesting that came out of them was they they see their international expansion strategy being heavily dependent on digital rails. And their chief financial officer said specifically that if they are to expand, say, in the UK or Brazil, where they’ve made recent acquisitions, it cannot be on a branch based strategy, because there are already incumbents in place who would sort of hinder that or would prove to be tough competition. So they see digital as like a key part of expanding into new markets.

Myra Thomas
So did they give specific details Bank of America, as far as they are AI deployment?

Jaspreet Kalra
Yeah, so they talked about AI deployment being an efficiency play overall, and be things like, say, engaging with customer inquiries on the front end of it when a record interacts with customers. On the back end of it, it’s more about the queries, financial advisors have themselves when clients ask them questions, it’s about querying a lot of information that can be hidden deep in policy documents, ai based systems are able to do that quickly. And hence, it adds efficiency and speed to their internal processes.

Myra Thomas
I think the team has been following this quite a bit. I think, Lorraine, you had a chance to write a bit about AI when it comes to I guess business volatility and acquisitions for Bank of America, as well as I guess on the wealth management side as well.

Loraine Lawson
Yeah, the first thing I would say is calling Erica chatbot is probably insulting to Erica, she’s, they prefer to call her a virtual assistant. And she, it really does sort of reach to that level, and that it’s being used to assist with commercial banking and wealth management. Their AI capabilities at Bank of America also extend to predicting which companies are likely to be acquired close to a year in advance. So that’s one way they’re deploying AI and trading businesses. So big America has very advanced AI capabilities, I would say,

Myra Thomas
yeah, that that is pretty, pretty amazing. I also got a chance, there will be at our funding story today. It’s actually talked to someone over at revolute regarding their recent funding round, and that massive valuation. So I think the funding news was the 800 million, that 800 million fundraise for series D round, taking the company to 33 billion, making it one of the most valuable UK startups and making it the most valuable UK startup and one of the biggest startups in the world. The London based app is focused on banking investing, currency transfer, as other money management services, the spokesperson for revolute that I talked to, said they have about 16 million retail customers and around about 500,000 business customers. Obviously, my question was that, given the round, and given the size, it seems as if going public would be the next obvious step. But she she noted that there were no plans to do so in the near future. So that was interesting to find out. This is another round led by SoftBank, no surprise, their vision to fund and Tiger global. But so that’ll be interesting to see what develops there. So next week, we have some interesting things coming up as well. I’m working on a story. Well, actually, I was lucky enough to get a podcast done with Charlie ma over at Eloy. And we talked a little bit about the automation needed at traditional banks in order to recruit Gen Z customers, which she said was a little bit more difficult than the banks want to acknowledge, given KYC issues. Lorraine, what are you working on this week coming up?

Loraine Lawson
Well, I’m working on some security information. This week, we reported on APS security is growing threat. So next week, we will have some tips on how you can deal with that. We’ll also be looking at a new report from f5. That looks at the vulnerability in web applications that that really is how hackers do most of their

Myra Thomas
work. Any tidbit of advice you can give us on the ACE API security piece?

Loraine Lawson
Well, let me think not off the top of my head today. So you just have to turn in next week,

Myra Thomas
I’m afraid. Sorry, three, that one, just free. Hey, what’s coming up next week for you?

Jaspreet Kalra
So I’m following sort of the major appointments that happened at major banks this week, this month, and following what sort of thing that indicates with technology growth at different institutions, and also looking into how sort of this entire idea around decentralized Financial Services is likely to interact with mainstream banking.

Myra Thomas
Well, that sounds great. Thank you so much for joining us for the weekly wrap on the buzz. Here’s a look ahead. We did that already. Sorry about that. I want to thank everyone once again for listening. For more podcast content check out bank automation news, calm and In search the buzz from Bank automation news on iTunes and Spotify. Thanks so much