Magazine March 2019

Easy Money: Technology Is Reinventing Banking In Arkansas

money

by Dwain Hebda

Uday Akkaraju, CEO of BOND.AI, has a radically alternative vision of how the financial industry should operate. Photo by Jamison Mosley

Uday Akkaraju hardly fits the image of a revolutionary, but appearances can be deceiving. Akkaraju, CEO of BOND.AI, not only holds a radically alternative vision of how the financial industry should operate, he’s dragging arguably the planet’s most paper-laden, face-to-face-based industry by its wingtips along with him. 

“What I always say is, ‘The future of finance is beyond finance,’” says the mild-mannered 32-year-old. “Banks, I think, in the future won’t just deal with finance. They might deal with helping you get a better job or maybe help you get new income source; banks will need to go beyond just financial data and take into context all the non-financial or intangible data points out there.

“We are coming into a generation where … there’s a very good correlation between finance and health. These are the two most important pillars of everybody’s life, and I think we’ll see a combination of that happening. Everything is driven by finance; the byproduct is health or something else.” Banks will need to create that cohesive ecosystem.”

A conversation with Akkaraju is not an easy one to process. After all he, and a growing number of fintech entrepreneurs just like him, think on a wavelength of providing what’s next before you even know you need it. In BOND.AI’s case, that means incorporating artificial intelligence to turn your phone into an interactive money manager. One part personal shopper, one part hand-held monetary conscience, the app finds lower loan and credit card interest rates, critiques and optimizes spends and squares today’s outflow with future aspirations such as saving for retirement or a house. 

The voice-enabled app works on a personalized platform Akkaraju calls the empathy engine, fired by your financial information and stoked by your every online move. This information teaches the program a lot about you and your habits, enabling it to make relevant suggestions and recommendations pursuant to your goals. 

It’s as personal as you can get without actually speaking to another human, which statistics show fewer and fewer banking consumers are looking to do, even those you wouldn’t suspect. In BOND.AI’s case, it’s people over 35 with a large percentage of 55- to 60-year-olds, statistics that fly in the face of conventional thinking.

“We are surrounded by apps like Uber and AirB&B. The convenience is great, right?” Akkaraju says. “I mean, we have everything even before we want it. For example, Amazon. I select this product, and it says, ‘People who selected this also selected that.’ Just that algorithm is driving 35 percent of [Amazon’s] revenue. People want convenience; Frictionless has become buzz word or default in the tech world but in finance we may need a little friction to change behaviors or nudge people towards better financial health.”

Given its historically uber-traditional, high-touch business model, one might think advancements like BOND.AI would be unwanted among banks, but such is not the case. Many institutions today are embracing the changing habits of their customers with the kind of transformative technology that has the potential to completely reimagine the industry.

“Our end goal is to make the customer experience as user-friendly as possible and as fruitful for our customers as possible and doing that while making it as secure as possible,” says Larry Casey, chief information officer for First Arkansas Bank & Trust. “We want to provide services to our customers as easily as possible by whatever means they choose.

“With the digital experience, we’re able to tailor or accommodate customers on how much they want to interact with a person. Some would rather just have something quick and easy and get it over with. Some people would rather have a live conversation, and we can accommodate that.”

FAB&T’s interactive teller machines, custom-branded as QUB, provide an in-branch experience without leaving the car.

Among FAB&T’s more recent enhancements are interactive teller machines, custom-branded as QUB, that provide an in-branch experience without leaving the car. In addition to everything a traditional ATM does, there’s a live video feed with a teller for personal assistance as needed.

Roger Sundermeier, chief brand officer, says he sees the new machines as merely the next phase of an evolutionary process, albeit one that’s turning over much faster than a few years ago. The companies that are most successful in this space, he says, are those that can translate a set of operating principles across multiple points of delivery.

“Whether you walk into a branch or go outside that branch, everything should be funneling back to one core principle and delivery channel and style and tone,” he says. “With data analytics and things of that nature, you’ve got the ability to drill down and see how long someone is spending on a website, how long someone is spending on a certain page and what they’re doing and the abandonment rate of the applications.

“We have so much more reporting at our fingertips now that you can really create a very robust and great experience for the customer. Again, it all needs to be consistent with all the channels.”

Chris White, Central Arkansas market president for Simmons Bank, describes his institution as a “fast follower.” Photo courtesy of Simmons Bank.

Chris White, Simmons Bank market president for Central Arkansas, describes his institution as a “fast follower” when it comes to technology, but notes the bank does not shy from proper levels of investment when the time comes. Case in point, the bank is spending $100 million on a system-wide technology overhaul called Next Generation Banking. Kicked off last year, it’s expected to complete implementation by 2020.

“Everything you can touch within a financial institution, inside and outside, is being revamped and brought up to today’s standards,” he says. “Everything we roll out will make our internal processes more efficient and make interactions for the consumer more pleasing.”

While remaining mum on specific features, White says the revamp will help correct the same problem many financial institutions face, that is, streamlining a series of systems and tools that had been knitted together over time.

“On the inside, we’re trying to simplify processes, so instead of keying information on three different systems you’ll key it one time,” he says. “From the back side, for the way we understand our customers and can interact with them, we want good data. Over time, we’ve had different processes where we’ve collected that data. This is going to bring all that together so we can build the network we need to reach out to a customer and let us understand their needs a little better.”

As comprehensive as the new system is, White is quick to point out it will not entirely replace human employees or one-on-one interaction, even if it does change the way brick and mortar locations operate.

“Our branches are going to look different. The way people walk in and start interacting will be different versus walking in right now or talking in the teller line,” White says. “What I perceive will not change is, we will always have a focus on the community, and no matter what technology becomes for us, we’re still going to have a person or people that can interact with clients. None of that will go away.”

In addition to meeting customer preferences, the potential for realizing additional revenue is another major motivation for investing in and adopting such tools. Pre-big data technology struggled to generate consistent results offering such things as auto loans or credit cards, given how they were broadcast to consumers along comprehensive qualification parameters. The new tools, typified by BOND.AI, offer hyper-personalized products that provide a compelling match to goals and spending habits.  

“Everybody has some kind of financial necessity, and they don’t want to waste time expressing that to someone else,” Akkaraju says. “This is the easiest way to say, ‘OK, this is my problem.’ I can ask the system right now, ‘Can you help me buy a car?’ In 20 seconds, it gets you there. Same with houses or ‘Can you help me create my portfolio?’ Everything happens very quickly. You can take your time, but it gives you hyper personalized insights. That is definitely the future.” 

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