Category Archives: Financial Services

Salesforce modernizes wealth management offering

Salesforce WearSalesforce has launched Financial Services Cloud, a new product suite that includes portfolio management, prospecting and data management tools.

As part of the new look product offering, Salesforce has built an ecosystem of more than 20 partners to implement the additional features into the suite. “Today’s investors don’t wait for quarterly meetings to discuss their finances with advisors; they expect to be able to engage them for advice when and how they want,” said Richard Lumb, Group Chief Executive, Financial Services at Accenture, a member of the product ecosystem.

While seen as a more traditional industry, wealth management businesses are apparently under increasing pressure to provide more detail to customers on a more consistent basis. Whereas a quarterly meeting might have been sufficient in the past, customer demands for information, speed and continuous delivery has forced the wealth management industry to evolve into the internet age and an open-all-hours model.

With clients demanding more face-time, and instantaneous insight into the performance of their investments, wealth managers are seeking digital solutions to increase productivity. Such product launches not only demonstrate the trend of modernizing more traditional industries, but also the need to provide the complete customer experience to remain competitive in the CRM space.

“Legacy advisor solutions were created decades ago to serve a product-centric world. Today, we live in a new world that is digital- and client-centric, which is turning the wealth management industry on its head,” said Simon Mulcahy, GM of Financial Services at Salesforce.

To develop the new features, Salesforce developed a number of new partnerships with niche technology providers. For example, DocuSign and eSignLive plan to add integrations that could allow advisors to send, sign and manage financial documents, and WealthEngine provide tools to facilitate wealth scoring and analytics.

“The wealth management industry is undergoing rapid change, and the ability to deliver on customer expectations for a more responsive and highly personalized digital-led experience will become an increasingly important competitive differentiator,” said Kieran Hines, Practice Leader for Financial Services Technology at Ovum. “Investing to enhance the customer experience is a top three IT priority for a significant number of private banks in 2016, with institutions in Western Europe and North America particularly focused on this area.”

Bitreserve re-launches as cloud based financial service hub Uphold

Money cloudCloud based financial exchange Uphold, formerly Bitreserve, has redesigned its functions, products and services for a relaunch. It now aims to connect banks, credit and debit cards and bitcoin to clients’ digital wallets for instant financial services and transactions.

The service, which began as a pure Bitcoin trader, now offers consumers, businesses and charities the option to fund their Uphold accounts via bank transfer or by linking a credit or debit card. The new options are now available in 33 European countries. Uphold said it plans to roll out these services to the United States, China and India by November.

In a four phase rollout out, members in 33 European countries will be able to fund Uphold accounts via bank transfer from October 14th. Meanwhile, clients in 30 European countries can now fund accounts with credit or debit cards. By November 2015 clients in the US and China will be added to the service.

Phase Three, which is scheduled for December 2015, will see Uphold introduce both physical and virtual payment cards with Visa, MasterCard and Discover card, allowing clients to pay merchants online or in-store, directly from their Uphold accounts. The same services are scheduled to be extended to the Indian market in January 2016 in Phase Four of the plan roll-out of cloud services.

The service aims to connect the world’s legacy and fragmented financial networks and systems with a cohesive cloud-money platform, said Uphold CEO Anthony Watson. Uphold said it will bring instant, transparent, accountable and free financial services for all consumers. “We’re simplifying and radically reducing costs for all financial transactions and services – from currency conversions to international money transfers and payroll to bill payment and remittance,” said Watson, “our mission is to make it easy and frictionless for anyone.”

To date, Uphold has powered over $400 million in transactions by tens of thousands of members across 163 countries, in 24 supported currencies and four precious metals. Around 22 per cent of the world’s publicly traded bitcoin has been transacted on Uphold.

Deloitte and Cloudera create compliance service in the cloud

CloudProfessional service company Deloitte and cloud operator Cloudera have launched a jointly created cloud service that helps financial services people meet their compliance obligations more easily. It aims to specifically ease the workload created by the supervisory rules of the capital analysis and review (CCAR) process.

The Deloitte CCAR service aims to help companies cope with the masses of data needed to stress test financial products as regulations constantly change. Annual CCAR supervisory rules regularly specify new scenarios and datasets to be used in credit risk, liquidity risk, market risk, pre-provision net revenue (PPNR) and capital management models.

The cost and time involved in constantly processing these complicated variables, in order to generate the forecasted stress estimates, is escalating as the number of quarterly and yearly models multiples, according to Deloitte.

The Deloitte-designed solution includes accelerators to streamline data selection, data quality, variables conversion, data ingestion and management and to convert or migrate models to the SAS DS2 or Apache Spark or Python programming languages.

Cloudera was approached to use its expertise in Apache Hadoop open source software frameworks in order to create the visualization and dashboard tools promised in the system. The tools are designed to interact with the results of stress tests so they can quickly identify trends and potential sources of risk.

Deloitte built accelerators in Spark that cater for a wide variety of contingencies, which cuts the cost and risk of migrating existing CCAR models into an open source environment at first and into  the SAS DS2 once it is released.

“The current regulatory environment that our clients face is more complex than at any time in history,” said Ashish Verma, director at Deloitte Consulting LLP. “This complexity in regulation has led to complexity in data management, making compliance very costly with little benefit to the business.”

Cloudera has created a ‘cost effective solution’ to the problems faced by clients, said Verma, “storing this data within Cloudera Enterprise means companies can perform additional non-compliance analysis and potentially develop a deeper understanding of their businesses.”

Salesforce doubles down on financial services

Salesforce is doubling down on financial services firms

Salesforce is doubling down on financial services firms

Salesforce is previewing a cloud platform tailored specifically to the needs of financial services professionals. The move comes the same week research reveals the average financial services firm uses over 1,000 cloud-based applications.

The cloud platform adapts Salesforce’s popular CRM platform to the financial services sector, and includes tools that enable financial services advisors to collaborate and communicate directly with their colleagues and clients.

Salesforce also said the platform, which was designed with the help of AIG Advisor Group, Northern Trust and United Capital, will integrate with tools created by other ISVs including companies that cater to financial services specifically (Advisor Software, Informatica and Yodlee for instance).

“Today’s investors want a much different relationship with their advisors than their parents had,” said Simon Mulcahy, senior vice president and general manager of financial services, Salesforce. “They want someone who understands them and engages them on their terms. Salesforce Financial Services Cloud sets advisors free from administrative tasks and gives them the modern tools they need to supercharge their relationships.”

The platform is in preview currently, with an initial release scheduled for February 2016.

The move comes the same week research from Skyhigh Networks shows cloud services uptake in financial services firms is at an all-time high.

According to the firm, which aggregated data of 3.7m employees at banks, insurance companies, credit card companies and investment funds worldwide, the average financial services firm uses 1,004 cloud services, with cloud-based collaboration platforms looking to be the most popular type of app deployed; the average financial services employees uses 31 distinct cloud applications.

Infosys takes financial suite of Verizon Cloud

Infosys is deploying its core and digital banking suite on Verizon's cloud

Infosys is deploying its core and digital banking suite on Verizon’s cloud

Infosys and Verizon announced a deal this week that will see the Indian outsourcing specialist offer its financial suite of software services on Verizon’s cloud platform in the US. The move is part of a broader effort to update its strategy for the times and go all in on cloud.

The Finacle suite, targeted primarily at banks and credit unions, is a white label core and digital banking services solution. Infosys said offering the solution as a PAYG software as a service can make it less costly and more flexible to deploy.

“Providing real-time and compelling customer experience across multiple channels is a difficult task, even for the largest of financial institutions with significant resources,” said Michael Reh, senior vice president and global head of Finacle, Infosys.

“With Finacle solutions now available on Verizon Cloud, financial institutions of all sizes, across the U.S., will be able to provide the latest banking services to their customers without any major investment,” Reh said.

Adam Famularo, vice president, global channel, Verizon said: “Together, Finacle and Verizon will enable new flexibility for clients. Financial institutions will benefit from Finacle’s comprehensive solution coverage and high-performance platform hosted on the Verizon Cloud to help them improve agility, achieve sustainable, profitable growth and drive their business.”

Since 2014 Infosys has ramped up its cloud partnerships in a bid to shift its outsourcing business towards higher margin activities, and financial services seems to be a more promising sector for cloud growth than originally anticipated. Gartner for instance predicts that by 2016, more than 60 per cent of global banks will process the majority of their transactions in the cloud, and many are already migrating less sensitive functions.

Cloud banking: lit from within

Financial services companies are warming to cloud services

Financial services companies are warming to cloud services

In a world where, as John Schlesinger, chief enterprise architect at Temenos, argues, servers are about to stop getting cheaper, the advantages of cloud computing in terms of cost and customer experience look more compelling than ever. In the banking market, however, the spread of cloud systems has been slower than elsewhere due to factors including concern about data security, uncertainty about the position regulators will take on cloud technologies and the challenge of managing migration from the in-house, legacy IT systems that currently run banks’ critical functions.

So just how hot is cloud banking right now? A quick temperature check of the financial services industry’s attitude to cloud banking in April triggered a warm response.

There are two sides to every story and never more so than when discussing with banks the shift from in-house technology to on-demand cloud-based services. So in Temenos’ recent survey Cloud-banking heat map, we asked two key questions: what are the benefits you seek from cloud services; and what, if any, are the barriers to adoption you face?

Echoing the results of a similar Ovum survey The Critical Role for Cloud in the Transformation of Retail Banks,last year, our results show that cloud is no longer just about cost reduction, as 50 per cent of respondents see cloud as a means to adopt new technology, and 34 per cent reported the ability to add new business functionality more quickly as a top benefit. This is a very encouraging sign that banks are seeing the adoption of cloud technology as a means to support the delivery of new products and services.

That is not to say that the long term cost benefits of cloud services are any less important. In fact the highest scoring benefit sought from the cloud, at 58 per cent of respondents, is to reduce overall IT costs. Not at all surprising given the profitability hit banks have taken post financial crisis, cost-savings are an obvious driver of a cloud-based IT strategy.

The top reported barriers to adopting cloud services are concerns over data security (55 per cent) and reliability and availability (47 per cent), which are common challenges for financial institutions that are used to managing and maintaining their own IT. This highlights the need for cloud providers to do more to demonstrate to the industry the robustness of their security controls and availability metrics, as paradoxically we may find that security and reliability is a benefit rather than a barrier to cloud.

Concern over regulatory compliance is another top factor against cloud banking, cited by 45 per cent of respondents. This is no surprise in such a heavily regulated sector, and there is no quick fix, but when talking to lawyers in this space, the feeling is that with a high level of due diligence on the on the banks’ part, and a transparent and collaborative approach on the cloud provider’s part, a solution could be found that meets all parties’ needs, including those of the regulator.

In response to this, we see cloud software vendors, their platform partners and industry organisations are working closely to address security concerns. Co-ordinated efforts such as the Cloud Security Alliance and its Cloud Controls Matrix have set out security principles for cloud vendors and assist prospective customers in assessing security risk at individual cloud providers. Cloud providers themselves are investing heavily in compliance and security expertise to the extent that many observers argue that a well-implemented migration to the cloud can result in higher levels of security than an in-house system, as well as access to real-time reporting mechanisms that are often superior, too.

As the industry continues to warm up to cloud banking, we will see the same issues raised and discussed again and again. And rightly so: the only way to support the banking industry in any leap in technology and faith is by addressing issues and challenges openly until all parties are convinced of its viability.

However, while clear challenges remain to more rapid adoption of cloud-based technology in banking, it is clear that change is happening. Already, analysts at Gartner predict that by 2016, more than 60 per cent of global banks will process the majority of their transactions in the cloud. Many are already moving less sensitive functions there and developing strategies to enable them to capture the benefit of cloud-based systems for their core operations.

Written by David Arnott, chief executive of Temenos

TD Bank uses cloud as catalyst for cultural change in IT

Peacock said TD Bank is using the cloud as a way to help catalyse cultural change at the firm

Peacock said TD Bank is using the cloud as a way to help catalyse cultural change at the firm

North American retail banking outfit TD Bank is using OpenStack among a range of other open source cloud technologies to help catalyse cultural change as it looks to reduce costs and technology redundancy, explained TD Bank group vice president of engineering Graeme Peacock.

TD Bank is one of Canada’s largest retail banks, having divested many of its investment banking divisions over the past ten years while buying up smaller American retail banks in a bid to offer cross-border banking services.

Peacock, who was speaking at the OpenStack Summit in Vancouver this week, said TD Bank is in the midst of a massive transition in how it procures, deploys and consumes technology. The bank aims to have about 80 per cent of its 4,000 application estate moved over to the cloud over the next five years.

“If they can’t build it on cloud they need to get my permission to obtain a physical server. Which is pretty hard to get,” he said.

But the company’s legacy of acquisition over the past decade has shaped the evolution of both the technology and systems in place at the bank as well as the IT culture and the way those systems and technologies are managed.

“Growing from acquisition means we’ve developed a very project-based culture, and you’re making a lot of transactional decisions within those projects. There are consequences to growing through acquisition – TD is very vendor-centric,” he explained.

“There are a lot of vendors here and I’m fairly certain we’ve bought at least one of everything you’ve ever made. That’s led to the landscape that we’ve had, which has lots of customisation. It’s very expensive and there is little reused.”

Peacock said much of what the bank wants to do is fairly straightforward: moving off highly customised expensive equipment and services, and moving on to more open, standardised commodity platforms, and OpenStack is but one infrastructure-centric tool helping the bank deliver on that goal (it’s using it to stand up an internal private cloud). But the company also has to deal with other aspects a recent string of acquisition has left at the bank, including the fact that its development teams are still quite siloed, in order to reach its goals.

In order to standardise and reduce the number of services the firm’s developers use, the bank  created an engineering centre in Manhattan and elected a team of engineers and developers (currently numbering 30, but will hit roughly 50 by the end of the year) spread between Toronto and New York City, all focused on helping it embrace a cloud-first, slimmed-down application landscape.

The centre and the central engineering team work with other development teams and infrastructure specialists across the bank, collecting feedback through fortnightly Q&As and feeding that back into the solutions being developed and the platforms being procured. Solving developer team fragmentation will ultimately help the bank move forward on this new path sustainably, he explained.

“When your developer community is so siloed you don’t end up adopting standards… you end up with 27 versions of Softcat. Which we have, by the way,” he said.

“This is a big undertaking, and one that has to be continuous. Business lines also have to move with us to decompose those applications and help deliver against those commitments,” he added.

Box touts new customers as the battle to differentiate continues

Box co-founder and chief executive Aaron Levie briefing journalists and analysts in London this week

Box co-founder and chief executive Aaron Levie briefing journalists and analysts in London this week

Cloud storage incumbent Box announced a slew of new customers this week as the company, which was recently taken public, continues to nudge its balance sheet into the black. Despite strong competition in the segment and the added pressure that comes with being a public company Box continues to differentiate from both traditional and non-traditional competition, said co-founder and chief executive officer Aaron Levie.

Box announced this week it had inked large deployment deals with home and body cosmetics brand Rituals Cosmetics, the University of Dundee and Lancaster University, which cumulatively total close to 50,000 new seats on the cloud storage and collaboration platform.

“You’re seeing all of this disruption from new devices, new employees entering the workforce, new ways of working, new customer and consumer expectations about how they want to interact with your services. Customers really have to go digital with their enterprises,” said Levie said.

“From the inside, companies need to get more collaborative, move more quickly, make decisions faster, be able to have better technology for the workforce. It also means you’re going to have all new digital experiences to create your products, and offer an omnichannel customer experience – if you’re in retail, healthcare, this will drive fundamentally new business models.”

The company said it now has over 34 million users and 45,000 organisations globally using its service, with those companies belonging to a broad range of sectors – transportation, logistics utilities, healthcare, retail, the charity sector, and many more.

It’s planning a big push into Europe. Its UK office its fastest growing outfit with over 140 employees, and it recently hired former Microsoft cloud sales exec Jeremy Grinbaum to lead the company’s commercial expansion efforts in France and southern Europe. It’s also looking to deploy international datacentres to power its services outside the US within the next 12 to 18 months.

One of the big areas it’s trying to break into is financial services. The company recently introduced Box for Financial Services as part of its Box for Industries offerings, a growing portfolio of vertically-integrated cloud-based storage and collaboration platforms that bake industry-specific data management, security capabilities and workflow management requirements right into the service.

“Financial services has been slower to adopt the cloud, mostly because of an unclear regulatory environment,” Levie told BCN. “We’ve been working with financial services customers around the regulatory and compliance aspect, and with our encryption key technology we’ve gotten much farther along in terms of giving financial services firms the ability to adhere to their data security controls.”

Levie said the company has recently had some fairly big wins in the financial services space – none that he can mention publicly yet, of course – but some of the company’s customers in the sector already include US AA, US Bank, and T. Rowe Price to name a few.

Box for Industries (it already offers Box for Healthcare and Box for Retail) is central to how the company intends to differentiate itself among a growing sea of competitors – that, and its security investments. Levie said Box is more enterprise-y than Dropbox, widely viewed as one of its largest competitors, and more vertically-integrated than UK-based Huddle. But when asked about competition from non-traditional competitors like banks, some of which are using their substantial datacentre, security and digital service UX investments to provide their own cloud-based storage services to customers, he said he sees Box as more of a partner than rival.

The company recently launched Box Developer Edition, a software development kit that lets partners and customers use APIs to integrate Box’s technology into their own applications, Levie said banks can become Box partners and effectively white label its offering.

“Box ends up being a natural back-end service in that process. So instead of them having to build out all of the infrastructure, manage all the systems and then essentially recreate what our hundreds of engineers are doing,” he said. “The value proposition for [banks] is going to be the digital experience that allows them to interact with their customers.”

Cloud democratises retail investor services

Cloud has the potential to democratize investment services

Cloud has the potential to democratize investment services

Cloud services are opening up possibilities for the retail investor to create individual customised funds in a way that was previously the preserve of the super-wealthy. Coupled with UK regulation such as the Retail Distribution Review, the effect has been to make new business models possible, according to Michael Newell, chief executive at InvestYourWay.

“Nobody is really talking about how the cloud is fundamental to what they do, but it is,” said Newell. “Where previously it might have taken days or even weeks to get the information to set up a fund, and to change your portfolio and positions completely, and to activate your account, it now takes just a few seconds thanks to Amazon Cloud.”

Newell previously worked at BATS, where he was involved alongside Mark Hemsley in setting up the exchange’s ETF services. For some time, he had been increasingly aware of the kind of services that high net worth investors were getting and began to form an idea that someone could bring that to the common retail investor. The idea was to create a system where each individual person has their own fund. However, Newell soon realised that to make that possible, it would be necessary to service customers investing smaller amounts at significantly lower cost – something that had never really been viable up to that point.

“You’d never get that kind of individual attention unless you were high net worth,” he said. “If you’ve only got £2,000 to invest, it’s not going to be worth a fund manager spending the time with you and charging just a few pounds for their time, which is what they’d need to do to make it viable. It just didn’t work.”

Cloud services changed both the economics of the situation and the practicality of his original idea. Newell found that by obtaining computing power as a service, calculations that would have taken 48 hours on a laptop could now be completed in 30 seconds. A manual Google search process carried out by an individual to work out how best to invest might take days at the least, or more realistically weeks and even months – but on InvestYourWay, it can be done in seconds because the process is automated.

Part of the impetus for the new business was also provided by regulatory change, which began to make it easier to compete in the UK with the established fund managers. Specifically, the Retail Distribution Review which came into effect in January 2013 had the effect of forcing fund managers to unbundle their services, providing transparency into previously opaque business charges. Customers could now see exactly what they were being charged for, and that has had the effect of forcing down prices and changing consumer behaviour.

“It’s amazing that it took so long to bring that to the retail investor,” said Newell. “If you think about it, all of this has been happening in the capital markets for years. The focus on greater transparency and unbundling. The clarity on costs and fees.”

However, the idea still needed visibility and a user-base. This was provided when the platform agreed a deal with broker IG, under which InvestYourWay became a service available as an option on the drop-down menu for IG customers. The platform launched in October 2014, offering investment based on indexes rather than single stocks. This was done in part to keep costs down, and partly for ideological reasons. Newell explains that alternative instruments such as ETFs are popular, but would have involved gradually increasing slippage over time due to the costs of middle men. Focusing on indexes removes that problem.

The platform also claims to be the first to offer non-leveraged contract for difference trading. While around 40% of trading in London is estimated to be accounted for by CFDs, normally these are leveraged such that an investor who puts in £1,000 stands to gain £10,000 (but may also lose on the same scale). But IYW’s contracts are not leveraged.

The interface of the platform has quite a bit in common with the latest personal financial management interfaces. The first page consists of a time slider, a risk slider, and the amount the user wants to invest, as well as preferred geographical focus – Europe, America or Asia. After that, users get a pie chart breaking down how the service has allocated their investment based on the sliders. For example, into categories such as North American fintech startups, Asian banks, European corporates, etc. Users also get bar charts showing the historical performance of the fund they are designing, as they go along. They can also see an Amazon-style recommendation suggesting “People who invested in X, also bought Y…”

After that, the user is presented with optional add-ons such as investment in gold, banks, metals, pharmaceuticals, and other areas that may be of special interest. Hovering the mouse over one of these options allows the user to see what percentage of other funds have used that add-on. Choosing one of the add-ons recalibrates the fund that the user is creating to match, for example adding a bit more Switzerland if the user selected banks.

In a demonstration seen by Banking Technology, it was possible to adjust a fund by getting out of Europe and moving the user’s investment to Asia in a few clicks. According to Newell, it would take weeks to do that the traditional way. The process might involve moving money from one fund manager to another or starting an entirely new fund. It was also possible to see how much the cost of that move was – in a demonstration seen byBanking Technology, on a £10,000 investment the cost was £13. Prices are matched to the most recent available end of day data.

NCR offers cloud control for Android-based ATMs

NCR says Kalpana can nearly halve the time it takes to deploy new services

NCR says Kalpana can nearly halve the time it takes to deploy new services

NCR has announced a radical new approach to ATM network deployment, with a cloud-based enterprise application allowing banks to control and manage thin-client devices running a locked-down version of the Android operating system.

Called Kalpana, the software can result in a 40 per cent reduction in cost of ownership and halves the time it takes to develop and deploy new services, the company claims.

Robert Johnson, global director of software solutions at NCR, said banks are under pressure to improve services and reduce costs and so are “making very careful technical choices”. With increased emphasis on digital mobile and internet banking the ATM channel “has started looking a little disconnected”, he added.

ATM architecture development has been relatively static over the past 10 to 15 years, and while the devices have become more sophisticated in terms of features such as cash deposit and recycling, colour screens and online chat capabilities, essentially they are all customised PCs, creating problems of management, security and cost.

According to Andy Monahan, vice president of software engineering and general manager for Kalpana at NCR, the recent migration from Microsoft Windows XP to Windows 7 “has forced a rethink” and a few years ago the company decided that Monahan’s team at NCR’s Global R&D centre in Dundee, Scotland, should “take a blank sheet of paper and ask ‘what should we build next’”.

“There are two main discussions that we have with CIOs,” says Monahan. “One is whether there a viable alternative to Windows and the second is about the fact that the banks have a fairly clear idea of the IT architecture they want, and they want it to be consistent.”

The choice of operating system was relatively straightforward, he said. “When you look across the spectrum of embedded operating systems Android is pretty standard.”

By having a thin-client Android based device “everything that is customised is removed from the device and taken into the enterprise”, from where it can be configured and managed remotely. It also dramatically improves security. “By removing everything from the ATM thin-client and taking it into the cloud you create a locked-down environment that is very secure: there’s no BIOS and there’s no hard drives, just a secure boot loader that validates the kernel and checks all the certificates,” said Monahan.

By having the management systems in the enterprise software stack it is easier to develop new applications and services alongside other channels such as mobile and internet, ensuring a faster time-to-market and a more consistent customer experience, as well as to simplify management and maintenance tasks.

The first ATM to work in the Kalpana environment is NCR’s new Cx110, which uses Android tablet technology. Cardtronics, the world’s largest retail ATM owner/operator, has already taken delivery of the Kalpana software and Cx110 ATMs and plans to pilot them at locations in the Dallas-Fort Worth area, beginning “in the next few weeks”.