These bank-vetted startups have plans to solve industry challenges

Improving artificial intelligence, solving IT problems and providing a better customer experience were themes of Thursday's Fintech Demo Day, in which 11 fintech startups showed bankers and venture capitalists their bank-oriented offerings in the auditorium of Bank of America’s Bryant Park tower.

For the past eight years, the FinTech Innovation Lab New York — a collaboration between 43 financial institutions, Accenture and the Partnership Fund for New York City — has held this annual accelerator, in which bank executives choose the startups and work with them for 12 weeks to help them hone their products into something a bank would use.

“This is a crucial conduit for emerging technology companies to work with us,” said David Reilly, global banking and markets CIO of Bank of America. “One thing you'll find consistently in financial institutions is we know we don't have all the answers, partnerships are critical. And not for the sake of saying we're working with emerging companies. Our clients need access to these tools, these technologies, these products, so we can enhance these services, particularly at the scale at which we all operate.”

This year, the program added an insuretech track, acknowledging the $2.3 billion in investments in such startups made in 2017, a 63% increase over the year before, according to Maria Gotsch, CEO of the Partnership Fund for New York City.

Several of the startups demonstrated bank-specific technology that may impact the industry in years to come:

Improving artificial intelligence, solving IT problems and providing a better customer experience were themes of Thursday's Fintech Demo Day, in which 11 fintech startups showed bankers and venture capitalists their bank-oriented offerings in the auditorium of Bank of America’s Bryant Park tower.

For the past eight years, the FinTech Innovation Lab New York — a collaboration between 43 financial institutions, Accenture and the Partnership Fund for New York City — has held this annual accelerator, in which bank executives choose the startups and work with them for 12 weeks to help them hone their products into something a bank would use.

“This is a crucial conduit for emerging technology companies to work with us,” said David Reilly, global banking and markets CIO of Bank of America. “One thing you'll find consistently in financial institutions is we know we don't have all the answers, partnerships are critical. And not for the sake of saying we're working with emerging companies. Our clients need access to these tools, these technologies, these products, so we can enhance these services, particularly at the scale at which we all operate.”

This year, the program added an insuretech track, acknowledging the $2.3 billion in investments in such startups made in 2017, a 63% increase over the year before, according to Maria Gotsch, CEO of the Partnership fund for New York City.

Several of the startups demonstrated bank-specific technology that may impact the industry in years to come:
Cutover

Managing software changes — Cutover

Cutover is designed to help companies manage significant software changes without endangering critical systems, something bankers say is sorely needed.

“Major software releases are complex, costly and inherently high risk,” said Timothy Bhatt, chief technology officer at Ally Financial. “It's no secret that although these changes are routinely implemented, almost every weekend, they're largely orchestrated by a patchwork of manual processes and many spreadsheets. Cutover has built a platform to help companies manage complex software changes to critical systems while reducing risk and enabling a full audit trail.”

Ky Nichol, Cutover's CEO, noted that in banks today, software changes are often managed in Microsoft Excel. Cutover provides a way of communicating and updating everyone involved.

“Stakeholders can see live information without having to ask anyone about their status,” Nichol said.

One client used Cutover to merge two credit card businesses onto one platform in one weekend, he said.
YayPay

Helping banks help business clients automate accounts receivable — YayPay

Neil Zane, senior vice president of technology partnership development at Bank of America, said business collections can be fraught with problems. One example is when a salesperson calls on a client who has just received a collections notice.

Enter YayPay, white-label software banks can use to automate accounts receivables for B2B merchants.

“With YayPay, the salesperson would receive an automated email about this way before they head out to the client,” Zane said. “Cash flow would improve because instead of a problem customer paying in 100 days, now they'll pay in 84. And a team that handled 1,000 invoices a month can now handle 3,000 invoices.”

This is a $124 trillion market, according to Anthony Venus, YayPay's chief executive.

The first thing YayPay does is connect transaction, customer management, ERP, CRM, billing and email systems together, he said.

Next, YayPay turns the data into useful insights using predictive analytics and machine learning.

“Then companies are able to better assess credit risk and predict payment speed accurately,” Venus said. There are no more manual follow-up emails. Customers pay on an intelligent payment portal. Fifty suppliers are on the platform, and they’re getting paid 34% faster than before, he said.

The company is backed by Fifth Third Bank.
Galactic

Developing applications for the cloud — Galactic Fog

“Cloud technology is here, and it's impacting the way developers build their applications, the way devops teams deploy those applications, and the way information security teams manage their work,” said Jonathan Wells, vice president of payments technology at U.S. Bank.

Galactic Fog’s platform lets developers and devops teams quickly build, deploy and manage applications that can work across different clouds.

“At U.S. Bank, our technology strategy team is doing a deeper examination of the functions of Galactic Fog,” Wells said.

The software is already being used by a large financial institution to reduce the number of cores required for a large enterprise reporting application by 18%, he said.

Daniel Lizio-Katzen, founder of Galactic Fog, noted that a lot of developers come out of school using the most cutting-edge tools.

“Then they go to work for a large enterprise and they run into a brick wall,” Lizio-Katzen said. “That brick wall is something that can be adjusted, smoothed and made much faster.”

Galactic Fog provides a development environment that can be used by developers, quality assurance people and production operations people — normally, these groups use different and incompatible environments.

“It’s a standard environment that works across all the different clouds or clusters on” premises, Lizio-Katzen said. “The QA team checks code in the same place where it was built. The production team also takes that container and moves it to production on-prem or on a cloud.”
LiveOak Technologies

White-glove service on digital channels — Liveoak Technologies

“Banks are going digital, and that's for good reason, because customers have increased expectations: They want to be able to do what they want to do, when and where they want,” said John Marshall, director, emerging technology strategy and planning at Citigroup.

Still, there are higher-value transactions and complicated needs that call for white-glove service, he noted.

“Today often what we have to say is just stop in the branch or go to the embassy, the customer then has to travel to get their problem solved and that has to happen at a different time than they we're thinking about,” Marshall said. “It's also true that you can't just talk through these problems on the phone. You need to see what the customer has in front of them to solve the problem. And the best time to solve the problem is when the customer is engaged, interested and available.”

Liveoak Technologies has built technology that combines videoconferencing with co-browsing, collaboration, electronic signatures and document capture.

This can be used for onboarding a new customer or handling a glitch in a mortgage, for instance.

Andy Ambrose, Liveoak's CEO, said the system “marries the power of the human expert with a seamless digital journey.” It also provides an audit trail of everything that happens in a session.
Fintech demo day 2018

Fintech roundup

Seven other startups, some focused on insurance, also gave demos at the event:

StrongArm Technologies obtains real-time data from sensors placed on workers’ bodies to provide real-time feedback, such as alerts, to help insurance companies prevent and manage injuries.

Habit’s app integrates with smart devices in the home to make suggestions for improving the risk profile of that home — for instance, detecting the lack of a smoke detector.

Open Data Nation’s software taps into city administration records to help insurance companies make decisions — for instance, by identifying the Chipotle where people are likely to become sick.

UpLevel Security uses machine learning to help identify the true threats among the hundreds of thousands of security alerts large companies receive every day.

Alpha Vertex models complex financial problems and predicts asset returns for hedge funds and other Wall Street firms.

Virtualitics combines machine learning and virtual reality to help people visualize data in multiple dimensions.

Diffeo’s AI-powered research assistant that can find data sources and display snippets relevant to a search.
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