Sat. 16 Oct 2021, 5:16pm ETBenzinga
In: Fintech, Tech, Interview

Fintech is one of the “enormous competitive threats” facing banks. That’s what JPMorgan Chase & Co’s (NYSE:JPM) Jamie Dimon said months ago in response to an accelerated digital disruption in finance, a result of the pandemic.

Amongst the fintechs building easy-to-use, fast, and smart digital banking solutions is Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), an atypical player in the market given that the firm is more of a technology company with core competencies rather than a financial services company.

Notwithstanding, Google’s head of retail banking Zac Maufe told Benzinga, at the MX Technologies Money Experience Summit, the firm would morph into a fintech heavyweight.

Here’s more on Google’s foray into financial services.

Context: After working at Wells Fargo & Co (NYSE:WFC) and HSBC Holdings PLC (NYSE:HSBC), Maufe made the decision to join Google and solve financial services problems around the world.

His areas of focus include customer experiences, operational efficiency, as well as risk and regulatory compliance.

Elaboration: Financial services providers have conditioned consumers to offerings of personally tailored products.

Consumers are now expecting financial services to be delivered to them, where they are,” Maufe said on the change in tone first appearing with early mobile bank applications. “The other big thing is this drive for personalization … and now, given that we’re scaling digital interactions, it’s hard to have that same kind of human experience.”

Apart from this disruption in customer experiences, there is also a drive for increased operational efficiencies – amidst margin compressions as a result of increased competition, digitization, and the compressed rate environment – along with improved risk and regulatory compliance.

“There’s been this massive push to raise the regulatory bar on the standards in terms of what good looks like,” said Maufe. Which inevitably brings on a massive flood of data, slowing operations.

Solutions: “We’re really focused on API-based banking.”

Maufe said Google is looking to apply its core competencies – like machine learning – to some of the biggest issues facing financial institutions.

Through solutions like Document AI, Google is able to take in unstructured data and apply it to documents that slow operational processes as a result of compliance initiatives.

“We’re crushing paper out of the process,” Maufe said in reference to Document AI’s automation and impact. “We basically said: ‘Give us the document and we can give you back a structured data set.’”

“We’ve been applying these really cutting state-of-the-art machine learning models to [anti-money laundering] … and what we’ve seen is if you can train it to a specific use case, you can actually get dramatic improvements in false positives,” he added.

Outlook: Google is in the early stages of disrupting finance.

“Google, at the end of the day, is an incredible technology and data company,” Maufe said in reference to Google applying its core competencies to other areas. “It’s about how do we leverage the capabilities that Google has to help us in our quest to get better at using and managing data,” with respect to financial services.

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