Fintech

How to decide whether to build or buy fintech, AI technology

Published

11 months ago

4 June, 2024

How to decide whether to build or buy fintech, AI technology

The decision whether to build your own technology platform or program rather than through a partnership is becoming more complex and often more expensive as technology advances in machine learning and artificial intelligence.

Any learning model requires more data and updates to work better, which also raises concerns about the security of data streams and whether to develop the technology in-house or work with a technology partner to streamline that process.

TO KNOW MORE: The ROI of AI: Consultants struggle to get unbiased answers from technology providers

“That’s the multimillion-dollar question: Build versus buy,” said John Mackowiak, chief revenue officer at Advyzon, a cloud-based portfolio management platform based in Chicago.

Mackowiak said his company builds technologies internally primarily to create a consistent user experience, but also because adding vendors would require integrations into different systems, which can be complicated.

“Certainly [building in-house] It wasn’t the easiest road to take. But over the ten years since we launched, it’s been a game-changer,” he said. “Because with the idea of integrating one vendor with another, you end up with a fragmented technology stack and user experience fragmented.”

But building new technologies in-house isn’t always the right fit for everyone. Every company has a different business strategy, budget, customer base and a different level of technology development capability.

“You have to understand your use case really, really well. What are the economics behind it? And then, AI, just like any other technology, is its capital,” said Lee Davidson, head of data and Morningstar analysis. “Usually, you have capital and labor to deploy to solve a problem. And you have to find the right mix to make the production function work and meet the customer’s needs.”

Davidson provided an example of learning from “failures” when he began experimenting with machine learning models in 2011 to generate investor insights for users.

“They never went anywhere” because “as a researcher working on this, I thought people cared about accuracy,” he said. “They care about transparency.”

Morningstar decided to use machine learning and large AI-powered language models to better explain to users how a response was formulated.

“What we found is that there’s this trust factor, this explainability, so we started to package it into more explainable pieces,” he said. So the user tool “talked about the bottom, talked about the context… and we got a lot more usage because people understood that there was some evidence behind it, some context.”

TO KNOW MORE: Does your chatbot speak the right language for your customers?

Morningstar also implemented new tools across large language models, such as ChatGPT, to help with the launch Artificial Intelligence Research Assistant Mo last year. Increasingly, a company might build a system in-house but outsource another feature or tool to a more specialized technology company.

“It’s hyper-individual. For us, we have our own internal team that designs what we’re doing from an AI perspective. But we use third-party tools to manage the system,” said Chris Shuba, CEO of Helios, a quantitative asset management platform that uses learning technology to perform portfolio data analysis on thousands of mutual funds and ETFs. “Some people don’t do it at all. They just tell an AI developer, ‘Here are the results I’m looking for. Go do it and we’ll pay you for the project.’ Other people might have some hybrids.”

TO KNOW MORE: How the relationship between financial advisors and technology is changing everything

For example, Envestnet is a large Wealthtech provider offering in-house built technologies, but has also partnered with specialist technology providers such as iCapital to offer an alternatives exchange on its platform for client advisors.

Dana D’Auria, president of Envestnet’s solutions group and co-chief information officer, said the company chose to work with iCapital and others that were “established vendors” specific to the alternatives sector.

“It’s not something we’re going to build internally because No. 1, that would be a huge, distracting task,” he said. “And No. 2, you already have leaders in the industry who are part of the same customer ecosystem that we serve. So it’s an obvious one to partner with.”

TO KNOW MORE: Envestnet and Salesforce join forces on the consulting platform

D’Auria said that when considering whether or not to build in-house, companies should first evaluate what the build will look like, whether bringing resources in-house would distract from overall goals, or whether internal staff have a better understanding of the business and integration .

“Bringing a build in-house takes resources, but at the same time… you have the same team working on proposals, the same team working in the billing environment – all those same people are now building it directly into the solution.”

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FinCrypto Staff

We are the editorial team of FinCrypto, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on FinCrypto, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Fintech

Lloyds and Nationwide invest in Scottish fintech AI Aveni

Published

9 months ago

29 July, 2024

FinCrypto Staff

Lloyds and Nationwide invest in Scottish AI fintech Aveni

Lloyds Banking Group and Nationwide have joined an £11m Series A funding round in Scottish artificial intelligence fintech Aveni.

The investment is led by Puma Private Equity with additional participation from Par Equity.

Aveni creates AI products specifically designed to streamline workflows in the financial services industry by analyzing documents and meetings across a range of operational functions, with a focus on financial advisory services and consumer compliance.

The cash injection will help fund the development of a new product, FinLLM, a large-scale language model created specifically for the financial sector in partnership with Lloyds and Nationwide.

Joseph Twigg, CEO of Aveni, explains: “The financial services industry doesn’t need AI models that can quote Shakespeare, it needs AI models that offer transparency, trust and, most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, vetted by financial services experts for specific financial services use cases.

“FinLLM’s goal is to set a new standard for the controlled, responsible and ethical adoption of generative AI, outperforming all other generic models in our selected financial services use cases.”

Robin Scher, head of fintech investment at Lloyds Banking Group, says the development programme offers a “massive opportunity” for the financial services industry by streamlining operations and improving customer experience.

“We look forward to supporting Aveni’s growth as we invest in their vision of developing FinLLM together with partners. Our collaboration aims to establish Aveni as a forerunner in AI adoption in the industry, while maintaining a focus on responsible use and customer centricity,” he said.

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Fintech

Fairexpay: Risk consultancy White Matter Advisory acquires 90% stake in fintech Fairexpay

Published

9 months ago

29 July, 2024

FinCrypto Staff

Treasury Risk Consulting Firm White Matter Alert On Monday he announced the acquisition of a 90% stake in the fintech startup Fair payment for an undisclosed amount. The acquisition will help White Matter Advisory expand its portfolio in the area of cross-border remittance and fundraising services, a statement said. White Matter Advisory, which operates under the name SaveDesk (White Matter Advisory India Pvt Ltd), is engaged in the treasury risk advisory business. It oversees funds under management (FUM) totaling $8 billion, offering advisory services to a wide range of clients.

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White Matter Advisory, based in Bangalore, helps companies navigate the complexities of treasury and risk management.

Fairexpay, authorised by the Reserve Bank of India (RBI) under Cohort 2 of the Liberalised Remittance Scheme (LRS) Regulatory Sandbox, boasts features such as best-in-class exchange rates, 24-hour processing times and full security compliance.

“With this acquisition, White Matter Advisory will leverage Fairexpay’s advanced technology platform and regulatory approvals to enhance its services to its clients,” the release reads.

The integration of Fairexpay’s capabilities should provide White Matter Advisory with a competitive advantage in the cross-border remittance and fundraising market, he added.

The release also states that by integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

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Fintech

Rakuten Delays FinTech Business Reorganization to 2025

Published

9 months ago

29 July, 2024

FinCrypto Staff

Rakuten (Japan:4755) has released an update.

Rakuten Group, Inc. and Rakuten Bank, Ltd. announced a delay in the reorganization of Rakuten’s FinTech Business, moving the target date from October 2024 to January 2025. The delay is to allow for a more comprehensive review, taking into account regulatory, shareholder interests and the group’s optimal structure for growth. There are no anticipated changes to Rakuten Bank’s reorganization objectives, structure or listing status outside of the revised timeline.

For more insights on JP:4755 stock, check out TipRanks Stock Analysis Page.

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Fintech

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

Published

9 months ago

29 July, 2024

FinCrypto Staff

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

You are reading Entrepreneur India, an international franchise of Entrepreneur Media.

White Matter Advisory, which operates under the name SaveDesk in India, has announced that it is acquiring a 90% stake in fintech startup Fairexpay for an undisclosed amount.

This strategic move aims to strengthen White Matter Advisory’s portfolio in cross-border remittance and fundraising services.

By integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

White Matter Advisory, known for its treasury risk advisory services, manages funds under management (FUM) totaling USD 8 billion.

Founded by Bhaskar Saravana, Saurabh Jain, Kranthi Reddy and Piuesh Daga, White Matter Advisory helps companies effectively manage the complexities of treasury and risk management.

The SaveDesk platform offering includes a SaaS-based FX market data platform with real-time feeds for over 100 currencies, bank cost optimization services, customized treasury risk management solutions, and compliance guidance for the Foreign Exchange Management Act (FEMA) and other trade regulations.

Fairexpay is a global aggregation platform offering competitive currency exchange rates from numerous exchange partners worldwide. Catering to both private and corporate customers, Fairexpay provides seamless money transfer solutions for education, travel and immigration, as well as simplifying cross-border payments via API and white-label solutions for businesses. Key features include competitive currency exchange rates, 24-hour processing times, extensive currency coverage of over 30 currencies in more than 200 countries, and secure, RBI-compliant transactions.

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