DIGITAL BANKINGTRACKER™ Staking Out Territory In An Increasingly Crowded Digital Field SEPTEMBER 2017 U.K. banking startup plans Harrod’s Bank acquired by Find the top providers European expansion digital banking startup in the last Tracker Scorecard – Page 5 (Feature Story) – Page 9 (News and Trends) – Page 17 (Scorecard) © 2017 PYMNTS.com all rights reserved 1 DIGITAL BANKINGTRACKER™ TABLE OF CONTENTS What’s Inside: 03 Banking gets an artificial intelligence (AI) infusion as several digital providers debut new AI-assistant enabled features. Feature Story: 05 Julian Sawyer, chief operating officer for British digital banking startup Starling Bank, on the company’s European expansion plans and the future of the digital banking industry. News and Trends: 09 The latest headlines from around the digital banking space. Methodology | Top Ten Rankings: 13 Who’s on top and how they got there. Scorecard: The results are in. See this month’s top scorers and a provider directory featuring more 17 than 200 major players in the space. About: 120 Information on PYMNTS.com. © 2017 PYMNTS.com all rights reserved 2 What’s Inside ompanies across the digital banking space are app, uses the Siri integration for payment apps Apple looking to get smarter. But, rather than joining the introduced with iOS 10. Cleagues of students returning to the classroom this fall, digitally-minded banks and financial institutions Similarly, RBC customers can also use Siri to make a are looking to increase their artificial intelligence (AI). payment. The company added other new features to its mobile app, including enabling P2P transfers via With the debut and popularization of virtual assistants iMessage. like Apple’s Siri and Amazon’s Alexa, among many others, AI-powered technology is now in the hands and homes Meanwhile, U.S. Bank teamed up with Amazon to teach of millions of Americans. And, banks and FinTechs are the Alexa assistant some new skills. The two companies increasingly working to use that intelligent tech to help collaborated to enable customers to complete tasks consumers more effectively manage money from a by speaking to the eCommerce giant’s voice-activated smartphone or other AI-assistant enabled device. digital assistant, and said they would continue to cooperate to “teach” more new capabilities to Alexa in Over the past month, several providers debuted new the future. New capabilities would help Amazon add services and features that utilize and integrate AI more use cases for the device. technology. But, for some, just having AI-enabled features isn’t Here’s what’s happening around the world of digital enough — they want an entirely AI-powered digital banking: banking solution. New digital startup Douugh is offering A pair of financial institutions are turning to Siri, Apple’s just that, unveiling an AI-powered financial platform assistant, to give their solutions a dose of artificial guided by Sophie, a 24/7 personal assistant for finances. intelligence. The platform promises to use the personal assistant to help customers better manage their finances. Barclay’s, for one, debuted a new feature allowing customers to make payments simply by asking Siri to British startup plans EU expansion do it for them. According to reports, the feature, which U.K-based FinTech startup Starling Bank has its eyes on was added to the latest version of the company’s iOS expansion. © 2017 PYMNTS.com all rights reserved 3 What’s Inside The company announced earlier this year it had received Sawyer, Starling’s chief operational officer, discussed the its cross-border banking passport — used by financial company’s expansion and the future of the industry — firms around Europe to do international business — and including how artificial intelligence could impact digital would use it to execute an already planned European banking. expansion. Starling set its sights on Ireland as a first step, opening its virtual doors for business in July. Digital Banking Tracker September updates In this issue of the Tracker, we’ve profiled more than 200 Now, the company is planning to continue expanding players in our ever-expanding provider directory, including through the rest of the EU, especially including the seven new additions: Automated Systems, Inc., Cleo, mainland European continent. In a recent interview for Douugh, Finacus Solutions, Honeydue, Personetics and this month’s Digital Banking feature story (p. 5), Julian Qapital. Five Fast Facts 4 Million 75% 74% Number of new Share of Percentage users who have international of Gen Y joined Zelle banking revenue professionals since the app 8% for which 45% who use a launched in June, retail banks personal according to the in emerging spreadsheet to company. markets will help manage account over the their finances Growth in the Percentage of all next five years. rather than digital number of mobile banking revenue tools provided banking apps that comes from by their financial available from commercial institutions. 2016 to 2017. banks. © 2017 PYMNTS.com all rights reserved 4 Staking Out Territory In An Increasingly Crowded Digital Field © 2017 PYMNTS.com all rights reserved 5 What’s Inside Feature Story "The nice part about offering a digital product is that it isn’t constrained by many of the traditional borders and limits that other financial service products and firms are bound by" or consumers looking for mobile banking options, In April, Starling Bank announced it had become the first there’s no shortage of solutions available in digital digital-only bank in the U.K. to partner with Pay by Bank, a Fdownload stores alone. But, in such a jam-packed new app designed to make online and mobile payments space, how can a startup stand out from the crowd? more secure and convenient for customers. And, by striking a new partnership with Apple in July, Starling For U.K.-based, startup, digital and mobile financial firm Bank became the first financial institution of any kind Starling Bank, the answer has often involved trying to stay in the U.K. to offer the ability to setup and authenticate ahead in the crowded digital banking race. In a recent Apple Pay transactions within its own mobile app. interview, COO Julian Sawyer told PYMNTS the bank has been doing just that since it was founded in 2016, all by As a result, the bank has added several thousand using its technologist DNA to debut new digital features customers since it opened its digital doors in July 2016, and services ahead of its competition. and continues to on-board more than 100 new customers each day. Now, the company is looking to use those “It goes back to what Starling is,” Sawyer said. “We’re a partnerships — and other features and capabilities — digital technology company that happens to be doing to appeal to a new customer base, beyond its London banking and payments, so we want to have technology headquarters, by expanding business throughout Europe. leading the way for us. At the end of the day, we’re good at payments and we’re good at technology, and we want Pushing forward on partnerships to combine those efforts so we can kind of lead the Sawyer said the company’s integrations with both Pay by pack.” Bank and Apple were designed to help it stand out in a competitive digital banking field — and attract customers The company is also eager to partner with technology looking to use a digital- and mobile-first banking option. providers that can complement its skillset and help it build on what it does best, he added. Starling Bank also debuted a new kind of integration this © 2017 PYMNTS.com all rights reserved 6 Feature Story year with the launch of Marketplace, a new ecosystem of financial products accessible through Starling’s app. UNDER THE HOOD It offers Starling customers access to products and features from other FinTech providers via an integration with Open Banking- and PSD2-compliant APIs. JULIAN SAWYER OF STARLING BANK on artificial intelligence and machine learning Marketplace went live in mid-September, partnering with in the digital banking industry Flux as its first third-party FinTech to offer software in the Starling app. The integration allows customers to Thanks to interactions with virtual assistants — view receipts for transactions in the Starling app in real- like Apple’s Siri, for example — many consumers time. It also enables customers to earn loyalty points at are at least superficially familiar with the participating restaurant and merchant locations. technology behind artificial intelligence. In a recent interview, Julian Sawyer, COO of Starling In addition, the company has announced partnerships Bank, explained to PYMNTS how his company that will result in future integrations available in the is using the tech, and how it could affect the Starling Marketplace, including agreements with banking industry going forward. investment app Moneybox, cashback app Tail and money transfer app TransferWise. “We were one of the first banks to integrate our API with Alexa, so you can do things like get balances by talking “These partnerships are about identifying what we do to the device. But, to be honest, right now most uses with that device and others like it are just about having a bit of best — which is offering a checking account product and fun and exploring what the technology can do. It’s not too helping customers sort through their finances — and often you’ll be at home, with no neighbors or family or focusing on that while still offering customers other friends around, and want to hear your balance or account details read aloud to you, so anyone in the room can hear services,” Sawyer explained. it or get access to that information. Right now, there are very few really effective use cases for talking to Alexa, but these things are how we discover what the technology can do.