Contextualising information, influenced by general purpose social and commerce applicaitions, bots and AI-powered chats. Having a major influence on how financial information will be presented as banks open API’s, embedd its data in 3rd party applications and try to rediscover the proper language of banking amid the pressure from challenger banks and mono-product specialists that build their products with the help of.

For example, Google sees perfectly the looming merger of CP/CNP and the potentiall of in-app payments to allow users pay for web goods with a single tap of their Android Pay outfitted phones (where a rumoured Apple Pay could do the same with commerce websites opened in a browser where developers used Apple Pay enabled code (provided through Apple Pay partners):

‘Meanwhile, a new web API, called PaymentRequest, is being developed by Android with the Chrome team to bring Android Pay to mobile web checkouts. The system will be standard across web browsers through the World Wide Web Consortium (W3C).’ — Finextra

To bolster the efforts of making a purchase online a less painful experience, W3C has announced on May 20th it has published draft specifications aimed at streamlining the online checkout process:

‘The consortium believes that making purchases on the internet, particularly on mobile, can be a frustrating experience. Every website has its own flow and its own validation rules, and most require shoppers to manually enter the same information time and again. Likewise, it is difficult and time-consuming for developers to create good checkout flows that support various payment methods.The three draft specifications include a payment request API, which allows merchants to accept different payments methods with minimal integration. Secondly, a specification which defines payment identifier strings to help determine which parties support which payment methods. Finally, a specification for basic card payment, which describes the data formats used by the payment API to support card payment (e.g. debit or credit card).’ — Payments Industry Intelligence

E-commerce players also support the API-fication of payments and their contextualisation by opening up the protocols of their machine-learning algortythms: Amazon giving away its DSSTNE platform that powers its purchase recommendation system and Google recently opening up its TensorFlow to help 3rd party developers build their machine-learning powered applications (we will post a separate note on the machine learning trends and how they relate to the evolution of commerce and consumption).

The competition in machine learning commerce usecases is further solidified by IBM Watson pushing its platform for differnt business and value chain verticals (personalised medicine, ecommerce and customer support). Small players also try to cut short the commercialisation curves as funding begins to dry out:

- GoButler, the startup that originally offered a virtual assistant that let you request anything on-demand, appears to be pivoting for a second (and maybe final) time. The New York-headquartered company is shuttering the GoButler consumer-facing service altogether in favour of offering natural language processing technology to third-parties. Source: TechCrunch

A Sweden’s based SEB bank anonunced it has made a EUR 3,8 mio investment in Tink PFM app (their 2014 demo is available on Finovate website). Presently Tink claims to have 300 000 users in their home market of Sweden.

According to Tink:‘The service automatically collects and categorizes up to 2 years of historical transactions and assets from the banks you decide to connect. Once connected, Tink presents your expenses and incomes, suggests budgets, sends alerts, and gives you a personalized feed. Tink removes all the unwanted noise, highlights what’s important, and provides intelligent insights into your finances. Following your money with the Tink feed is as effortless as browsing your Instagram feed!’‘SEB says it will integrate Tink’s technology into the next version of its mobile app, which will be launched in November.’ — Finextra.

Finovate Blog then updated the news with Tink announced plans to build a virtual bank (ostensibly operating as XS2A operator)

‘Tink will use the funds to expand internationally and launch a virtual bank, Tink 2.0. The virtual bank will allow users to transfer money, make payments, scan and approve bills, and manage their money across any account directly from within the Tink app. These new capabilities are made possible by Europe’s new Payment Service Directive (PSD2), approved in January, that opens Europe’s banking infrastructure by making their APIs available to third parties.’

The impetus of banks investing or partnering with PFM providers is in both learning how external designs cater to the whims of customers, as well as testing against the looming deadline to open up transactional pipes.

Banks are reengaging with PFM with the adjacent popularity of AI apps and bots, lowering costs of contextual data processing, that spike interest of early majority to try and communicate with apps the way they do with friends. It is also a part of an much larger strategy to redefine and ingrain financial services in context of user’s social network, and offer advice, through in an offer the way humans are inspired by news, friends — how they process their thoughts, make decisions and place those in context of their desires and overall wellbeing.

‘Challenger’ banks see the potential of current accounts that account for user needs (hence banks in EU, AfPac and US adopt notifications, play with SMS-based bots for automated savings, apps on contextual advice for investment and savings.

‘Ally Financial is piloting an app called ‘Splurge Alert’ that uses geolocation technology to identify when users are near to stores that they overspend in and alerts friends who can intervene. According to a Harris Poll survey commissioned by Ally, 85% of Americans admit to splurging — generally defined as buying an item that is not needed, regardless of price. The new app asks users to identify stores and areas where they tend to overspend and then select friends and or family who can help them avoid overspending pitfalls. The app uses geolocation tech to determine when users approach a “splurge zone,” and then sends an alert message to a designated b u d d y i n hopes that they will lure the user away from the problem area.’ It is also influenced by the increase of online activity where notifications, reminders and insights influence people desire to have the same quality of communication with bank apps and services. — Finextra

The movement is also supported by a variety of trackers, notifying of recurrent payments, tracking orders, controlling for fraud charges etc. All can be pieced together in a machine-reinforced feed controlling for a majority of user’s spending online and offline.

This sentiment is partly expressed by the green-field design approach of challenger (and often) mobile-only banks, that get their funding both from professional investors and as well as the public, for instance, Tandem bank has hit its planed 1 GBP target within 20 minutes of starting to collect money through Seedrs crowd-investing platform.

Another example is Clydesdale and Yorkshire to launch a banking app that has been in development for 2 years that uses machine learning to offer customers insight on their spending and saving. A digital banking service, called B and reported about in FT in early May, is part of the bank’s shift towards digital-only bank. It allows customers to monitor all their banks accounts in one app, signals on the cash amount highlighting pending debits, and gives occasional advice on spending in particular venues.

Several other ‘neobanks’ announced their impending arrival on the scene:
 Late April, a Danish mobile first bank, Lunar Way, about to open its doors for Danish users, is to offer a slick interface and offer trendy new services to differentiate from classic banking.

‘The firm, which is backed by Scandinavian venture fund Seed Capital, has signed up a partner bank in its home country of Denmark for a Spring launch. With plans to launch in Sweden and Norway by the end of the year, it hopes to have reached 85,000 Scandinavian users in 2016 before expanding throughout the rest of Europe.Users will get access to a MasterCard debit card and an app that offers an overview of accounts and transfers, and let them deposit money, pay bills and login via Touch ID.’ — Finextra

Another neobank, a US based Varo Money, a mobile-only startup founded by a former American Express and Wells Fargo executive, has raised more than $27 million in a funding round led by private equity giant Warburg Pincus, as it was reported by Finextra in early May.

‘Varo will provide debit card, deposit and lending products via its mobile app and promises to act as a “24/7 digital financial coach” that will offer proactive insights, analysis of spending and real-time budgeting.’ — Finextra