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Hark, what’s that sound???

No, it’s not angels singing, it’s the world breathing a collective sigh of relief that 2020 finally has one foot out of the door!

It’s been an unpredictable year. The Covid pandemic fundamentally changed the way we go about our daily lives, from where we work, how we shop, and how we interact with people, to how we manage our money. Many if not all industries have taken a hit, and financial services are no exception.

In what felt like an overnight shift, cash became dirty, bank branches were made off limits, and financial hardship became a reality for many previously stable businesses and families. As an industry that exists to serve customers with the products that best meet their needs, the ‘customer-centric’ mantra of many hit its first major test…

The result? Some failed, some passed, an elite few shone.

It’s those shining examples that I want to focus on today to bring 2020 to a close. Let’s give kudos to the financial services organizations whose efforts helped support families and businesses throughout the year. The resiliency, creativity, and adaptability of the teams at these incredible companies helped keep the world turning with human-centric digital-first banking experiences:

• Starling Bank – Starling lent £1.4bn to over 40,000 UK businesses through the government-backed BBLS and CBILS funds. They moved quickly; getting accredited on 7th May and lending on 11th May. Their Coronavirus Support Hub has also been widely praised by business owners. At the start of the pandemic, Starling recognized the logistical challenges that self-isolating customers could face earlier than others and quickly launched their Connected Card – a second debit card that personal account customers could give to a trusted friend or family member to buy groceries and essential goods on their behalf. At a similar time, they also launched their virtual Never Home Alone program, to help staff and their families adjust to being at home, providing a support hub of physical and mental health tips and shared experiences.
• Chime – US-based mobile bank, Chime, piloted a way for its users to receive their federal $1,200 stimulus checks instantly. They recently closed fundraising that valued the company at $14.5bn, making it the most valuable American fintech start-up serving retail customers. Chime has more than tripled it’s revenue and transaction volumes in the last year from customers pivoting to mobile banking services. A key differentiator lies with their checking accounts that give access to paychecks two days early and allow free use of an overdraft facility. This flexibility has resonated with customers throughout the pandemic, who are increasingly choosing to shift their primary banking accounts to Chime.
• Ualá – Argentinian digital start-up bank Ualá launched three years ago. Their mission: to disrupt the LATAM banking space and address the challenge of financial inclusion in a region where only 54% of the adult population have a bank account and cash is still king. That balance is now shifting, and with demand for digital money services booming in recent months, Ualá’s financially inclusive customer onboarding has helped grow its user base of distributed cards to 2 million. Following growth in Argentina and a total $200m raise, Ualá recently announced an expansion to Mexico, staking their intention to be the next Latin American unicorn and lead a revolution that will change the way people see and understand their personal finances.
• Admiral insurance – Back in April, at the outset of the UK national lockdown, car and van journeys ground to a halt and Admiral Insurance took the decision to rebate £25 to each customer through its Stay at Home refund policy in recognition of reduced claims—the only UK insurer to do so. This cost the firm £110m, but resulted in an increased retention rate of 81%, up from 68% last year – saving acquisition costs for over half a million customers. Large savings were experienced across the insurance sector and the firm hit the headlines in the summer when, as a thank you for their hard work throughout the pandemic, departing Chief Executive David Stevens gifted a £10m bonus windfall to Admiral’s 10,000 staff.
• BBVA – BBVA moved quickly to offer special assistance to consumer and small business customers impacted by the ongoing Covid-19 pandemic, including ATM fee refunds, payment deferrals, extensions and waivers on existing loans and lines of credit, and many other offers. They also set up a $35m Covid-19 relief fund to boost the global response to the virus’s initial hit. The fund helped medical centers and hospitals around the globe through the purchase of medical equipment and supplies. In compliance with local health authorities, the fund has helped distribute 2,400 ventilators, 25,000 items of PPE, and nearly a million face masks to 265 hospitals across the BBVA footprint, with a portion of the fund allocated to helping older people and vulnerable families.
• DBS Singapore – In response to the spread of Covid-19, DBS Singapore introduced a range of support measures and financial assistance to affected customers, including complimentary insurance coverage and home-loan-payment relief for employees in affected industries. SMEs were supported with a six-month property-loan deferment, temporary loan bridging, an extension of import facilities, digital account opening, and next-day, collateral-free business loans. The bank also launched health and education-related tools, such as online doctor consultation, online video-based lessons for kids, and taxi street-hail contact tracing. These services were tremendously popular and their free Covid-19 hospital cash insurance policy, for example, recorded more than 52,000 sign-ups a day at its peak.
• Kuda – Nigeria’s digital-only bank, Kuda, is pioneering a new breed of financial institutions in the country! Nigeria has seen the use of digital banking services increase throughout 2020 with Kuda tripling the number of daily customers onboarded. This has led to a recent $10m seed fundraise, tipped as the largest of its kind in Africa. Kuda also launched a Covid-19 fund to help buy and distribute food and other essentials to people badly affected by the economic impacts of the pandemic in Lagos. Launched in April, the fund received an initial contribution of 500,000 naira from Kuda before being opened to the general public.
• Covid Credit – 11:FS, Credit Kudos, Fronted
  It started with a single tweet on a Saturday morning back in March from Simon Taylor at 11:FS. The UK government had announced furlough support measures for full-time workers, but there appeared to be little plans in place for the 5m self-employed workforce to access these funds. A big piece of the puzzle was missing, and Simon quickly coordinated response from over 35 individuals from the fintech community, including Credit Kudos and Fronted, who together built an open banking journey, self-certification process, data capture, and ID verification – wrapped up as Covid Credit. Within 48hrs a functioning service was set up ready to present to the government and made available to the whole UK self-employed community. Truly inspiring. You can read the full story here.

The events of 2020 and the impact of the pandemic have been far-reaching, for the financial services industry it has provided the impetus needed to fast-track the transition from offline to online. The acceleration to serve and support customers in a digital way is a theme that is here to stay and set to continue. Businesses are racing to embrace digital transformation and the innovative teams behind these companies are finding incredible ways to use technology to power their human-centric, digital banking experiences.

The Provenir team and I would like to say a huge thank you to the people who’ve worked the extra hours and gone the extra mile to help keep the world turning throughout 2020.

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Greetings from Provenir. My name is Brendan Deakin, Vice President of Sales at Provenir, Inc. I hope all who choose to read this blog post are faring well during this historically challenging time, and are remaining safe, healthy, and productive. This is especially true for those who are living and working in hard hit areas like New York, Michigan, Italy, Spain, and many other areas where the virus has caused every element of society to stop operating in a normal fashion. Our thanks should also go to all of the first responders, doctors, nurses, and other front-line medical staff who risk their lives to ensure we weather this storm as quickly and efficiently as possible.

The Covid-19 pandemic has caused all of us to re-evaluate how we operate across our personal and professional lives.  The ability to separate work/life activities has become an hour by hour proposition for many of us. From the simple process of ensuring our conference bridge/web-based meeting tools work when needed to balancing homeschooling and other home/dependent care demands against that of our respective occupational responsibilities, we are all being tested like never before. As I look across our business here at Provenir, I could not be prouder of our collective team in its ability to quickly and effectively transition to a virtual work environment, all while continuing to support our global financial services clients during a tumultuous time, one ripe with uncertainty. We were and are well prepared for this, and have flawlessly executed our business operations strategy against very trying circumstances.

As the Coronavirus Pandemic expands, our banking and lending clients will have a unique opportunity and role in helping consumers and businesses cope with the economic downturn associated with Covid 19 and need to be prepared to help customers weather these tough conditions. Besides protecting its own employees and service providers in their branches and offices from the physical health threat of the virus, banks need to ensure their business and consumer customers are offered payment extensions or other relief programs, but only as far as their credit policies and balance sheets will allow. Given the disparate impact this pandemic will have on small businesses and consumers, financial services organizations will need to pay particular focus on account management/credit line management and collections strategies which are tailored uniquely to each client’s circumstances, while at the same time helping shore up their reserves and balance sheet.

While there is not a “one size fit’s all” strategy for banks, lenders, and payment companies, we believe those that focus on the following key account management tenants will retain more loyal, profitable customers during this cycle while shoring up their balance sheet to take advantage of market conditions as they improve. The following capabilities should be top of mind for today’s credit risk executives:

• Digitization:  Leverage your digital servicing capabilities to drive more consumers/small business customers to adopt internet and mobile servicing offerings, where and whenever possible. This is especially important for those clients who have been hesitant to adopt these services in the past. Gains made here will help reduce client attrition, improve customer satisfaction rates, all while opening up additional channels to engage and collect from consumers struggling under the financial burdens created by this pandemic.
• Evaluation: As conditions change, for better or worse, it will be vitally important for lenders to evaluate new business rules and decision strategies in real-time/near real-time in order to drive better economic outcomes for the bank and their customers alike. While this is especially true during the Covid 19 pandemic, constant re-evaluation of your credit strategies should become the “new normal”. Those lenders that can execute this new reality will be well positioned during this downturn, and more importantly, as conditions improve.
• Segmentation:  Explore each existing customer relationship by the nature and level of impact associated with Covid 19. This can help cluster customers and frame proactive Account Management strategies designed to not only aid the consumer during a trying time but limit the bank’s exposure to future delinquencies and charge-offs. Programs should be highly targeted to each account/consumer and can include short term payment extensions, new credit lines, fee waivers, collections treatments, and other strategies.

These and other thoughtful strategies, when executed through the right mix of data and technology, can help today’s risk management executives support their consumer and small business accounts through this Covid-19 crisis while limiting the threat to their firm’s balance sheet or the broader financial system as a whole.

Thanks for taking the time to read this!  Spring is upon us, and I wish you all nothing but the best for the remainder of 2020 and beyond.

Stay Safe!

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Just a few weeks into this crisis, the outlook, and vision of what was intended for the financial market in Latin America, was dramatically advanced. And based on these changes, experts argue that it is time to trust technology more and to adopt and accelerate its use in the products and services that various financial institutions market.

What are the advantages of Fintech? The answer is obvious: you can offer products and services, and acquire clients without having them on-site, that is, without having to appear at a bank or go to a certain physical location. However, only a small percentage of the market knows what a Fintech is, and these clients always fall back on the opportunities that traditional banks can offer them. The Fintech industry, in this period of COVID-19, will need to go through an era of education and drive to generate awareness and exposure among its potential users, to stop being a “nice to have” and finally become a reality. The Fintechs, without question, are here to stay.

The path, in the Latin American market, will be to digitize those “not digitized” and will possibly mark a trend for banks: to offer digital accounts with no monthly maintenance cost (as many Fintech companies do today) to unbanked clients. From this financial inclusion, these users would have easier access to funds from Coronavirus donations.

With the rise of open banking, Fintechs will focus on partnering with traditional banks or other entities to help them in the digitization process, empowering banks to move from an in-person model to a digital model. In the case of risk management, the trend will also be for Fintechs to help Latin American financial institutions on the path and process towards digitization. The Coronavirus will undoubtedly generate an increase in the use of digital technology in the Latin American market, and banking from home will be more useful than ever.

From a financial standpoint, technology will allow financial institutions to offer and market products in an agile and effective way. From a business perspective it will contribute to the “digitalization journey” and the growth of Fintech businesses and other financial institutions. But, perhaps the biggest motivator for taking the digital journey is that financial services organizations can better support clients through difficult times, like the current period of upheaval that Latin America and the rest of the world are going through. It is essential to have software focused on instant risk decisioning that can make it possible to grant any type of financing/credit in real-time, so that customers can access funds quickly.

The operationalization of risk models will also become a fundamental element in successful digitization, especially as financial services businesses expand their use of non-traditional data. These data sources feed innovative risk models that allow more advanced and accurate risk assessments to be made when authorizing payments or making credit approvals, without the support of traditional data, such as credit bureau scores.

The current Coronavirus crisis presents an opportunity to embark on the kind of innovation that the Fintech ecosystem in Latin America needs and, of course, to publicize what these companies offer. Right now, remote work and the possibility of working from home are changing the routine and the way we operate in our daily life. Digital and, therefore, technology will become a fundamental resource for our businesses, increasing both the reliance and the value technology solutions bring.

What is a decision engine and how does it help your business processes?

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If they are, you’re not alone.

The recent Rexer Data Science Survey found that only 10-15% of companies “almost always” successfully deploy analytics models.

If your organization isn’t in that top 15%, you’re probably already feeling two things:

1. Frustration caused by deployment delays
2. Pressure from above to make it happen

So, before I get into the challenges preventing rapid deployment and how organizations can overcome these hurdles, let’s answer the bigger question… why should we care about model deployment rates?

There are many reasons why a business needs to be able to deploy a new risk model quickly and easily, but there are a few that really stand out in today’s digital-first world. Rapid deployment:

1. Drives business growth—Analytics models are a key part of a risk strategy, they help drive business growth by making risk decisioning more accurate, which means more customers and lower default rates.
2. Improves customer experience—Customers now expect instant everything, risk and analytics models help businesses make real-time decisions and gain customers in increasingly competitive markets
3. Empowers competitive advantage—Companies that can test and deploy models quickly are able to make iterative changes to models using the most up-to-date data, making them better able to adapt to market demands.

One of the biggest reasons strategic analytics projects are often deployed late is the disconnection between the risk team and the development team.

The root of this developer-data scientist disconnection is that the two different groups literally don’t talk the same language. The modeling languages of choice for data scientists are generally Python, R (both open source languages), and the proprietary SAS. These are not usually the same languages preferred by developers, who favor Java, JavaScript, and variations of C such as C++.

So, typically data scientists create and test their analytics models—say a credit approval and verification application—using their languages. This work is then sent to the development teams, who then often spend a lot of time and costly effort recoding into their own languages so the model can be tested for security, compliance, impact on the infrastructure, and so on. Any changes that need be sent back to the data scientists for further review and approvals will kick off the same lengthy recoding processes, only in reverse.

The result? Fast time-to-market goes out the window. And if projects are deployed late enough, market conditions often will have changed so much that the reasons for deploying in the first place no longer exist, and the project is essentially dead on arrival.

Another culprit in the model development and deployment process is the fact that data is very often located all over the organization in protected silos. This is particularly true in highly regulated industries like financial services, where security and privacy concerns meet compliance realities. Historical data may be found in one or more silos, and transactional and production data in others. Data scientists needing elements of all these data have to root around to find and gain access to it.

But that’s not all, the digitization of many types of data has led to a huge range of new data sources, many of which can be highly useful to data scientists when predicting credit risk or fraudulent activity. As each new data source emerges it needs to be integrated into the businesses decisioning solution if it’s to be utilized by analytics models.

While integrations should be simple, many organizations struggle with creating or updating data source integrations due to inflexible technology that requires extensive hardcoding. Each new data source included in a model can result in lengthy delays to model deployment as they need to be completed before the model can be fully tested and pushed to a live environment.

It’s fair to say that many of the delays to risk model deployment are caused by processes, not people. It’s also fair to say that the rapid advancement of technology has made it difficult to keep up with new analytics models to tackle an ever-evolving model. So, what can you do about it?

Well, what if your process problems caused by technology, like having to translate models from one language to another, or manually updating hardcoded integrations, could be solved by technology?

So, instead of your risk team creating a model in one language, then your dev team translating it into another language for your risk engine, you could opt for a model agnostic risk platform instead.

For data scientists and developers ‘talking different languages’, being model agnostic effectively removes the intermediate steps of recoding between the two different teams. Instead data scientists can upload their models directly in their native languages, which allows them to fully utilize new analytical techniques.

These types of platforms help prevent the loss of analytics models that never get deployed due to prolonged development and deployment cycles.

Technology can also be an effective solution for data integration challenges, which both fintechs and traditional financial institutions still struggle with as a result of hardcoded connections that are often built to serve a specific purpose at a specific time.

Today’s digital market requires businesses to be able to create agile technology that can be quickly updated or repurposed throughout an organization to meet many needs.

For optimum flexibility and business agility it’s essential that data integrations can be created, used, reused, and updated quickly and easily. Again, integrations have traditionally relied heavily on over-burdened dev teams for what should be simple adjustments. Instead of following these traditional integration processes businesses now have the opportunity to use technology that empowers business users to handle the integration mapping process.

This means that the risk team can be far less reliant on the dev team for ongoing adjustments as they can easily map source data into analytics models.

What this really comes down to is using technology to simplify business processes and empower people to do more. By using specialized software solutions that remove steps in the model deployment process and reduce the reliance on development your risk teams are able to focus on current problems and initiatives to drive business growth. They’re able to respond more quickly, make changes more easily and implement a risk strategy much more efficiently.

The Simple Solution to Integrating Structured and Unstructured Data Sources.

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Innovation is a term that is frequently used to describe fintech businesses, whether it’s an innovative culture, an innovative product, or how they’re creating innovation within the industry. With the fintech space dominated by startups it isn’t surprising that innovation is thriving, after all, it’s much easier for new businesses with a small team and developing culture to build innovation within their business than it is for large financial institutions.

Startup fintechs have the advantage of agility over many of the established businesses in the financial industry. So, what does this mean for financial businesses with many employees and a long-established culture, is innovation just a pipe dream? Peter Nyberg, Group Director of Risk & Credit at Dun & Bradstreet doesn’t think so.

When it comes to innovation, if anyone is in a position to understand what it takes to transition an established business into a digital-forward, innovative organization, it’s Peter. As a leader within Dun & Bradstreet, he’s seen first-hand both the ingredients needed to adopt innovation within the organization and the steps Dun & Bradstreet’s clients are taking to create innovative change within their companies.

Dun & Bradstreet has taken an interesting path to become the company they are today, which is one of the most in-demand data bureaus and analytics firms in Europe. In its early years, Dun & Bradstreet purchased many small businesses to build the data giant that it is today, and Peter is quick to point out that creating a united team within an organization that is the child of 70 different entities is no easy task, but it’s essential for the success of their business.

“You cannot be competitive if you have 37 different ways to do the same thing, if your knowledge is found in 18 silos, or your data is stuck in legacy monoliths.”

For Dun & Bradstreet to succeed in using digitization to drive the business forward it had to take its existing competitive culture and transition towards a cohesive culture. To do this they created defined business goals that the team could be united around. So, when the usual objections and debates about how things are done occurred, they helped drive innovation instead of creating problems.

Dun & Bradstreet has worked hard to adopt a digital mindset and to empower their team to innovate, and while this is an ongoing process, Peter can identify one key step that became the foundation for all future changes within Dun & Bradstreet:

“There was a key turning point: setting down for the first time a set of key initiatives that align all the forces within Dun & Bradstreet, and highlighting how those initiatives take us towards being a different company.”

This cohesive understanding of core competencies, business goals, and the next step towards achieving these goals helped Dun & Bradstreet create an organization that was digital-forward, ready to adapt to change, and innovative. It provided the glue that formed one unit out of 70 companies and allowed them to transition from data bureau to leading data analytics business. A change that not only helps them be more innovative but also helps drive innovation within their client’s businesses.

When businesses reach out to Dun & Bradstreet it’s normally because they have a question that they can’t find the answer to. Whether it’s simply a question of using data, about efficiency, cost-reduction, risk decisioning, compliance or even the best way to adapt to a changing market, to find the solution it’s essential for a business to commit to making a change. Creating change in an organization is difficult, creating change in an organization that isn’t committed to evolving is almost impossible!

Whether the business can maintain focus on their goal. Digitization is an exciting opportunity for many businesses, and when people think about digitization and innovation they often fall into the trap of focusing on the technology. In Peter’s experience working with financial institutions he says, “Our clients jump into ‘we’re going to use this piece of software or that solution’ or ‘we’re going to hire so and so, many analysts, and a data scientist’, and often they do but somewhere in that the end objective is forgotten and not reached.”

When it comes to using digitization to innovate it’s essential for a business to look at all parts of the puzzle and what pieces are needed to reach their goal. Peter is a strong believer in digitization being as much about people and culture as it is about technology. Take for example a bank that has the technology in place to use risk-based pricing but doesn’t have the shared understanding or cultural awareness needed to implement that change. The technology’s capabilities and innovation opportunities are being wasted because the people weren’t ready for the digital approach.

While organizations fail to reach goals for many reasons, Peter says failure is often the result of, “businesses approaching change with a big bang method.” Creating a digital mindset within an organization can’t happen instantly, it needs a step by step method to ensure that all parts of the business are fully aligned with the new business approach. Peter used the analogy of an Oil Refinery as it’s been said many times that Data is the new oil of the digital economy. An Oil Refinery isn’t successful just because it has oil—its success is down to knowing how to access the oil, transport it, refine it, sell it, and get it to the purchaser. Most importantly, what the Oil Refinery very clearly needs to understand is what fuel is fit for which engine, and distill accordingly.

There are steps every organization must take in order to get to their goal and Peter is a huge proponent of using agile methodology to help businesses achieve their targets. He believes one of the key benefits of the agile approach for innovation is that you always have a functioning business.

“In terms of getting better at digitization, there is a lot to learn on the business side from thinking about gradual development of digitalization and processes, and the outcomes you seek.”

Instead of making large changes that the organization isn’t ready for, you can take incremental steps that slowly transition the business to where you want to go. It’s a gradual move forward that lets all stakeholders within a business adapt to the digital methodology and gives the team the opportunity to learn from each step and use this knowledge to improve future development phases.

“This is especially powerful when it comes to digitalization. You can, in fact, capture your inputs and your outputs. 3, 6, 12 months later you can go back, and see if what you predicted would happen actually did happen; and you can improve.” Peter again uses the Oil analogy to describe what he sees all too often: “In the late 19th century, the gasoline portion of distilled oil was often dumped into rivers. It was simply too explosive and difficult to use. Even today the norm seems to be for companies to throw away their most valuable data asset—the outcomes their digital processes generate and how they compare to what later on in hindsight would have been most valuable. And thus, their business continues to run on data diesel.”

What it’s clear to see from both Dun & Bradstreet’s transition to a digital-focused, innovative company and Peter’s experience with financial services clients, is that change is possible, even in the most divided organizations. Adoption of the digital mindset doesn’t happen overnight, it requires a long-term commitment, a clear goal, and a step by step process to move the organization forward as one cohesive unit. Adopting digitization to allow your business to innovate is a risk, but it’s also a risk you’ll need to take to keep your organization competitive.