Loraine Lawson
Hi everyone, I’m Deputy Editor Loraine Lawson. And welcome to the Buzz from Bank Automation News, where we explore how automation and emerging technology are transforming the banking industry. This is our weekly wrap for what’s happening in the industry this week. And before I begin, I’d like to give a big thanks to band sponsors and advertisers Glia and Volante , thank you so much for your support. I’m pleased to be joined by Associate editors, Aaron Marsh and Alijah Poindexter. It is December 10 2021. And here are the biggest news items from our editorial team this past week. First of all, robotic process automation UI path vendor or robotic process automation vendor. UiPath reports 50% revenue growth bringing its revenue to $220.8 million. The New York company highlighted bank uses in its earnings call. And in a pilot this week announced this week State Street in Vanguard successfully ran a foreign exchange trade forward contract on a blockchain leveraging smart contracts to automate collateral management. In related news the banks of France and Swiss National Bank successfully tried foreign exchange transactions using digital currencies, saying the experiment provided them with tremendous insight into this novel technology. And this week, a BAN exclusive: an inside look at how Brazil’s largest bank dealt with a government mandate to implement Bitcoin payments. So let’s start with the UI path news,
Alijah. Of course, UiPath is one of the largest players in the RPA space. What was new in the earnings call as far as banks are concerned?

Alijah Poindexter
Yeah, so you know, we start off with UiPath, for good reason, you know, UiPath, even before they went public earlier this year, they sort of assumed that ubiquitous status in enterprise automation sector, you know, everywhere you look, you’re gonna see UiPath, you check the news, or press release wire, you know, it seems like they’re everywhere. You know, and if you take a deep dive into what movers and shakers in, you know, automation and fintech industry are doing as well, you will find UiPath there, too, you know, their fingers are in a lot of pies, so to speak. And this was certainly reflected in their earnings call this week, they had a very, very solid q3, you know, with especially the revenue, their revenue grew 50%, year over year, to $220.8 million, which is great for them. And they also discussed their new cloud native on premise solution. And they also announced a range of new partnerships with everybody from snowflake, to, you know, little micro automation analytic providers. So super exciting on that end. But I think some real value, you know, in terms of understanding what UiPath can do, can be found in their work with banks. Two banks specifically, Hana bank in South Korea, and Isbank in Turkey, they were mentioned in their earnings call and report for their use of UiPath tech, they, you know, chat bots, rpa, process mining, etc, etc. They were all in the mix, and they saved 2 million working hours in the process. So and that’s just a tidbit, you know, but I think it’s good to go through these types of earning calls and stuff and see, you know, not just how the RPA enterprise automation stuff works in terms of top level, you know, tech appliance, but you know, for boots on the ground stuff as well, because it’s automation stuff, there is definitely an end to the means it’s so, so tangible. And I think that a lot of people can kind of get it misconstrued a little bit, and think that it only applies to, you know, top level stuff, and that they’ll never see a benefit from it. But you certainly I think will, coming down the pipeline, and UiPath highlighted that. So I think it’s really cool.

Loraine Lawson
Yeah, and their investor relations presentation, they talked a little bit about their land and expand approach. That’s a common strategy that tech companies ploy deploy, but one of the ways they do it, is they land maybe in the IT department, a tease, figuring out how to use them, but then they have a citizens developer program. And so they’ll they’ll help train people to deploy their bots. And then it starts to infiltrate the enterprise and expand. So I think that they’re planning out a lot of growth in that regard. noted, The report didn’t know that they had 2850 customers who have adopted their cloud based solution since it’s launched in 2019. But it’s interesting to note that they this year launched their first on premise solution, which is cloud native, but it’s for on premise, or private clouds. So it looks like you know, there are people out there maybe who don’t want to be on the cloud with every process. And, you know, I think they know there’s room for expansion in the space. So I thought that was interesting. Another interesting thing I noted from their presentation was they said they would opportunistically pursue mergers and acquisitions, which raises the question is this area ripe for some consolidation? Yeah, any thoughts?

Alijah Poindexter
Big time, big time. I think something you’re gonna see in the space moving forward is that a lot of people will by people, I mean companies, who right now are forward thinking in five years could be considered dinosaurs. And this is in terms of maybe their sort of startup level thinking where they maybe don’t want to expand, they don’t want to be acquired. They don’t want to make those, you know, sort of top level business moves. And that’s something also that Goldman Sachs Chairman David Solomon mentioned earlier this week, on Squawk Box is that with these types of fintechs, and stuff, it’s not just about what they can provide right now. It’s about what they can provide, and how they can, you know, act on the business end of things moving forward, that will really matter for their long term profitability, viability and money making, you know, how they make money, and UiPath, Certainly, again, there’s a reason why they are so ubiquitous in the space, you know, they want to land they want to expand, and they want to get out there. So again, super exciting.

Loraine Lawson
Yeah, and they do have interesting use cases. Another use case, they noted that I thought might have implications for baking was an insurance use case, where they were able to handle the amount of monthly claims they processed five times a regular amounts, basically, a four person team working with bots was able to handle the same amount of productivity as a team of 20. So it was interesting to me that Wall Street responded negatively to their earnings because they I thought they sort of prove their case for expansion. But we’ll see. Speaking of productivity, a cumbersome process in finance is collateral management between counterparties and trade. This week, State Street announced it had successfully ran $100,000 foreign exchange trade forward contract on a blockchain, leveraging smart contracts to automate collateral management between itself and financial services firm Vanguard. This is using assembly symbiotes, distributed ledger technology. And what struck me about that conversation was actually a talk with Nicole Olson, who is State Street’s head of Digital State Street. And she said, She’s the vice president there and said the technology was easy to use, and you just accessed it through a simple user interface. So it’s very common, very much like using other kinds of databases. So I thought that was interesting. Does anybody have any thoughts on that?

Aaron Marsh
I don’t know Loraine, I think you said it it.

Loraine Lawson
Yeah, it’s, you know, it’s a very news oriented thing. I think. This is a very manual process to settle. collateral. Basically, what happens most of the time, or a lot of the time is that the two groups don’t agree in how much money they owe. And so they were able to agree to what the process would be, and then encode the pod process in the smart contracts and smart contract can automatically then generate like, hey, Vanguard, you owe an extra, you know, $5,000, or State Street, you owe an extra $3,000, they can just, it can just trigger that transfer money. And so there’s no more departments calling each other on the phone opening databases and legal contracts and bickering over, like who’s right here. So that’s a huge automation that they have created there that I think we’ll see ripples across the financial sector as they start to build that out and make that available to other financial institutions.

Well, I was just gonna say, you know, I think we’re going to see more of this, some of these, like, what would it become these very dated, and manual, sometimes error prone and onerous processes in banking, I think we’re gonna see a lot of that attacked with automation in the coming year, I’ve been hearing this from a few different directions. One example was easy ops, I had a conversation with that company. And you know, and we’re looking at, like spreadsheet type of, you know, business management and that these things, they’ve sort of continued to exist and they become quite archaic. And they’re a big time drain, they’re a big drain on on the employees and their use their engagement there. And it’s just not a very good use of resources. So I think, just like you’re seeing at State Street, that this is going to be a big focus going forward.

It’s going to be fun to watch what blockchain can offer. In terms of automation and banks. Speaking of blockchain, we did a deep dive on Banco Agricola’s implementation of Bitcoin for payments and the technology behind it. So what did they say? Was it easy to implement Bitcoin or how did they go about that?

Aaron Marsh
Oh, well, it’s a it’s a fascinating, fascinating use case. And I think before I say anything, we should really call out, Banco Agricola and Technosys. The team at Technosys as well, for very graciously including us in the in this story it was it was definitely an honor to to have that opportunity. But what’s interesting here is that you have so many banks I think in the United States that are sort of looking at cryptocurrency Bitcoin probably being a prominent leader in that in that regard in there and they’re looking at what they can do to get involved with with cryptocurrency you know what what do you How can we get involved and should we should we so Banco Agricolas position here was a little different, he had to, you know, the country, you know, Salvador in I think it was announced like June 5, and then maybe made a law June 7, that you know, Bitcoin was going to become legal tender, this was going to be, you know, a, an accepted currency with the main currency still being the US dollar. So they had, you know, so Banco rucola is the largest bank in the country, and they kind of had to look at implementation within three months. So it was it difficult, difficult enough that they spent two of those three months just consulting about it, they really looked at the situation, and and what they were going to need to do and keep in mind, you’ve got a nation, that is about six and a half million people. Okay, so roughly like, like 1/50, the size of the United States, is it relatively small nation, and 70% of those people are unbanked? So, you know, in terms of when we have these, the we look at people’s difficulties in lack of understanding with cryptocurrency here, you can only imagine where you’ve got a population that is 70%, unbanked, you know, what kind of digital literacy do they have in terms of like, you know, now going moving to Bitcoin as a payment. So I think Banco Agricola was very deliberate in its approach. And they and they basically decided to move to accept Bitcoin as a payment for like loans like payday loans, and credit card payments. So we’re going to accept that as a payment, and the way that they set it up, they actually have no position in Bitcoin. They, you know, the customers of Banco Agricola can make a payment into those accounts, in Bitcoin, but it immediately is converted to US dollars. So Banco Agricola just received US dollars for those payments. You know, we got to hear about the just the, I’ll let people read the article, let them I don’t want to give away everything. But But yes, they had to set up you know, the technosys is a large part of the digital foundation for the you know, the that the digital foundation that is used to accept these payments in the digital banking at Banco Agricola, they had to set had to get a cryptocurrency partner. And, and you know, and basically how these payments were going to work. So there are several players involved. But this is how they set it up. And, you know, and this is, this is how I guess now several months in the in the running.

Loraine Lawson
So it’s interesting, they sort of partner their way to a solution, which I think you know, maybe people don’t understand as an option, but it is there are lots of companies out there that banks can partner with to launch Bitcoin. I’m sorry, I apologize. I thought they were in Brazil, but they’re in El Salvador. And their president has really been pushing Bitcoin. So it’s been very interesting. I believe he’s speaking at a conference on Bitcoin in Florida this year, actually, but that’s any idea why they’re pushing Bitcoin? They say, why this is such a big push for El Salvador?

Aaron Marsh
Well, it’s a bold move there. The first you know, El Salvador is the first nation to actually move to Bitcoin is like a national currency is legal tender. It’s a bold move. And I think it’s, if you again, if you look at the country of El Salvador, they’ve got some economic challenges. And part of the goal in moving to Bitcoin, as I understand it, is to reach for greater financial inclusion. So it’s, it’s like okay, well, again, maybe thinking that some of this difficult to reach population is going to get involved. If we move to a cryptocurrency and we can educate them on its use. And and the technology that is behind it. Maybe we can include that. That’s that’s a big part of the move. Is is financial inclusion. I think that’s why that’s where it was first announced the the Salvadoran president, I think it was at a like a global Bitcoin conference on June 5, so So yes, they I mean, it is a bold move, but I think they need bold solutions for some of the economic challenges that they have.

Loraine Lawson
Yeah, they have gotten some press for this. I was just reading in foreign policy that the headline is Bitcoin failed in El Salvador that President says the answer is more Bitcoin. So now that it’s illegal currency there, I guess we’ll see how it plays out. Okay, so here’s a look ahead at stories we’re working on in the coming week, we will be looking at how Jack Henry is expanding its digital banking partners to offer out more functionality for banks. And also we’ll be doing a feature on IT spending in the coming year. Anybody else want to contribute sweater? What are you working on this week out Elijah.

Alijah Poindexter
So this on Monday, so I’m going to go ahead and post a super excited conversation I had with Naftali Harris, who is the co founder and CEO of SentiLink. And they provide ID verification and anti fraud measures for fintechs financial institutions and everything in between. This conversation was super fun about as fun as a conversation about FinTech predictions and countering fraud could be but it was indeed fun. And an insight I will share, I don’t want to spoil anything. But an insight I’ll share from Naftali Harris is that, you know, 2020 moving into 2021. I mean, this was the biggest year for fraud ever. You just look at the PPP loan side of it, not even going into how stuff like cryptocurrency and all that fintech stuff, how that can be leveraged into fraud. Just looking at the PPP side, this has been the biggest year, year and a half, fiscal year, I guess you’d call it for fraud ever. And it looks to be continuing, you know, unfortunately. So a lot of good insights there. And I’m super excited to get back into the nitty gritty of it and share it with everybody.

Loraine Lawson
Aaron, what are you working on for next week?

Aaron Marsh
Yeah, Lorraine? Let me tell you, there are a lot of things in the pipeline. So I feel like it’s been that things are hopping. But in terms of what’s coming, like, you know, soon, I think next week, first, I may have a look at multi cloud networking, and specifically what financial institutions are doing in moves toward multi cloud networking. And this might be you know, that they have multiple cloud based solutions. And they’re bringing these things on maybe in like a modular sense, or, you know, core banking solutions. But they’re, they’re ending up in these in these multi cloud network networking situations. Are they ready for it? Spoiler alert, they are not. So I’m going to say so we’re going to take a look at that. We have you know, there’s a study involved. And then we got a number of people to sort of weigh in and share their thoughts. So there’s, there’s some really interesting stuff there. And then echoing what Alijah is talking about. I’ve got to look at artificial intelligence, in identity verification, and anti fraud efforts. And you sort of look at how, how AI can boost efforts in that regard. And there’s a big need to first of all, but we’re going to also kind of bring some others in, have them weigh in on that and see if maybe we’ll see some advancements in that going forward, too. So that is that’s just two things that are on the immediate front, and then there’s a whole lot coming.

Loraine Lawson
Well, that’s been a big conversation this year is how AI can help with risk. And, you know, a lot of people have found success with us. So look forward to hearing what you all have found out about that. Thank you so much for joining us for the weekly wrap on The Buzz. Don’t forget to attend our Bank Automation Summit, which is in March 1 through 2 in Charlotte, North Carolina. You can learn more about the Bank Automation Summit at Bankautomationsummit.com. For more podcast content, check out BankAutomationNews.com and search the buzz from Bank Automation News on iTunes and Spotify.