Citi Ventures, the venture investment arm and incubator within Citibank, is setting its sights on investment in process discovery and API security in 2021.

Citi Ventures Managing Director Matt Carbonara recently sat down with Bank Automation News to discuss his group’s investment appetite and the perils of implementing robotic process automation (RPA). The San Francisco-based Citi Ventures, which lists BlueVine, Betterment and Plaid in its current portfolio, is focusing on investment in automation that can provide financial institutions and other businesses more efficient ways to capture information, ensure data quality and enterprise security, and chart data lineage.

“We’re excited about companies in the process discovery space that allow you to automate the discovery element from the perspective of the person running the process at the computer terminal,” Carbonara said. “So, using computer vision to capture the screen in a secure way and in a way that protects the enterprise’s information.”

To that end, Citi Ventures last October poured $14 million into AI observation-based software provider Skan. Skan uses cognitive process mining by placing a virtual process agent on process participant desktops and recording digital interactions using computer vision. The company’s data science and machine learning algorithms then create a process “metamodel.” According to Carbonara, Skan’s “domain expertise and sophisticated security architecture” attracted Citi Ventures’ attention.

“We have seen valuations go up, and I think we’ve also seen company outcomes get bigger and bigger, and that’s what’s supporting the valuations,” Carbonara said. “Ten years ago, a good IPO was a billion-dollar company. Now an IPO could involve a $10 billion company, and I think valuations have adjusted accordingly, sort of mimicking what the potential outcome could be.”

API security is also top of mind for Citi Ventures, especially as banks consider moving to the cloud. “We think that the banks and large enterprises will continue to move to the cloud but need to do so in a way that has really strong guardrails to make sure they’re doing it in a safe fashion,” he added. He would not be more specific about upcoming security-related deals.

While Carbonara did point to RPA as a driver of efficiency and digital transformation across the banking space, he noted the challenges in getting the expected return on investment from it, calling RPA implementation “cost-intensive and error-prone.” It’s often difficult to devote the people and resources to initially document the processes that are ripe for automation, he said, adding that accurately identifying the process, then automating it remains a pain point for banks.

But at the same time, Carbonara told BAN that banks must up their game when it comes to “building out the digital channel and automating as much of that as possible.” The goal, he said, remains reducing fraud and risk related to onboarding customers, without compromising the customer experience.

“Everybody wants to have security and certainty of who their counterparties are, but you want to do it in a way that isn’t too cumbersome and actually improves the experience for people,” Carbonara noted.