Innovation and Insight in Financial Services

There's something about New York. The place exudes a sense of purpose. Broadway is the perfect place for a show and it seemed a fitting location for the Celent Innovation & Insight event. The theme of the show was shoot for the moon and even if you fail, you'll fall among the stars so it seemed fitting that it started with the Star Trek theme tune. Representatives from various companies shared their stories of innovation in both insurance & banking.

The keynote speaker was Richard King, the founder and CEO of Ingenie. Young car drivers pay extortionate rates for car insurance and Ingenie seeks to soften the blow through an innovative combination of telematics (a "black box") and social media. Backed by some very famous names, the company is just over 2 years old. Gary Lineker, the former England footballer, is Richard's next door neighbour and he joined by chance when he came round for a cup of tea. Frank Williams of Formula One fame is another backer sharing an interest in telematics technology.

20% of young drivers crash in their first year. 95% of those crashes are down to behaviour. Ingenie works by monitoring driving behaviour and looking for things like sharp braking and fast cornering. Using gamification techniques, good drivers are rewarded and bad drivers are penalised with higher premiums. Should the system detect a potential "license losing event" - the driver gets a black message followed by a call from the firm's trained psychologists. Half the drivers cancel their policy in response. The other half pull their socks up and behave themselves. For normal insurers they end up losing money on young drivers. Ingenie's underwriters make money and drivers get reduced premiums. Every one's a winner.

Their data gives them an interesting insight into the rate of claims. If mum or dad are on the same policy, the chance of a claim is reduced by 13%. If mum or dad engage with monitoring the driver's behaviour, the chance of a claim is reduced by 25%.

Good old fashioned paper cheques seems an unlikely spawning ground for innovation. The only reason I still have a chequebook is because the window cleaner won't accept any other kind of payment! Remote deposit capture using a camera phone has been around in the states for some time. USAA took this a step further and used a combination of video and augmented reality to push the first time success rate up from 78% to 92%. They also had a "Siri for Banking", only theirs had been christened as Nina. The voice recognition understands roughly 200 questions such as "Tell me how much money I spent last weekend" and "Show me all transactions over $1,000 in the last 30 days". They hope to make the software more intelligent over time so that they can answer things like "Can I afford a house in this area".

Bankgirot, a Swedish bank, demonstrated a system that did real time mobile payments including settlement and clearing in just 2 seconds. UBS talked about an innovative 2 factor authentication system using a combination of NFC and chip and pin.

I thought it was my lack of knowledge about trade finance and cash management that rendered those stories mundane, but as that was the only session where the audience had no questions, I was not alone. Some things are hard to make exciting.

Metlife engineered something called "The wall" which essentially brought data from all their disparate back end systems into one place modelled on Facebook's wall. Now in use in all their call centers, the software allows operators to quickly access all the details of their customers and the relationships in between them.

A Temenos customer, Commercial Bank of Africa, won a highly commended model bank award and model bank of the year for their M-Shwari solution. Using a combination of the T24 core and M-Pesa for mobile payments with the Integration Framework pulling it all together, they brought banking products to the huge unbanked population in Kenya. I collected the awards on behalf of the bank. Unfortunately, one of them could have passed for a deadly weapon which necessitated some rather crafty packing on the way home.