Financial institutions harnessing the power of big data must glean meaningful insights from many disparate data sets. Several startups helping banks and financial institutions make sense of data, alternative and otherwise, have emerged. The regulatory environment has intensified substantially lately. Medici found that there has been a 500% increase in regulatory rule changes since 2008. This has created an opportunity for SaaS startups to help financial institutions make sense of data and comply with these increasing regulations in a cost-efficient manner. Here are three startups mining data for banks that Bank Innovation is watching this month:
Hexanika is a data management and reporting solution for financial institutions. Their software uses an algorithm that can source and ingest data in multiple formats to normalize datasets. The Saas is powered by Hadoop, an open-source data computation software. It is agnostic and can work with banks of existing architecture. This regtech startup is helping banks cut regulatory costs and skirt hefty fines for non-compliance. Hexanika estimates that banks have paid $300 billion in fines since the 2008 financial crisis. New York-based Hexanika was founded in 2014 by Yogesh Pandit, formerly a senior consultant for Deutsche Bank and senior vice president of Citibank’s finance re-engineering program. The company is providing their solutions to financial institutions and helping them keep pace with changing regulatory requirements by leveraging Artificial Intelligence (AI). The company’s latest venture round funding (September 2017) secured $100,000 from venture fund Fintech71.
2. MindBridge Analytics
MindBridge’s platform uses AI and ML to detect “anomalous patterns of activities, unintentional errors and intentional financial misstatements” in financial datasets. The auditing software will automate ingestion and analysis of data and help accountants identify risk. A risk score is generated for all data processed and will flag transactions that need to be investigated. By using AI, the platform hopes to serve as the update to widely used computer-assisted audit techniques (CAAT). Serial entrepreneur Eli Fathi serves as the CEO of the Ottawa, Ont.-based company, founded in 2015. In April MindBridge secured $8.4 million in Series A funding.
There is perhaps no better example that big data and analytics has an infinite number of use cases in finance and beyond than looking at the work of Harvesting. The SaaS provider allows stakeholders in an agriculture value chain to view, analyze and manage their agri-climatic business risk via data collection, data analysis, and data reporting.” More simply put Harvesting connects financing to farmers. Agronomic data, as well as satellite and weather data, are processed with ML algorithms, insights can them be applied for crop insurance and to access the creditworthiness of farmers. The market for Havesting’s solutions is primarily India and Africa. Ruchit Garg founded Harvesting, based in Newark, Calif., in 2016. Last year the company received an undisclosed amount of venture round funding from Catalyst Fund, an early stage accelerator interested in financial inclusion.
Leveraging datasets for deeper insights will be a boon for banks, and thanks to fintech startups committed to automation, compliance, and analytics of data banks won’t be left behind in the big data fintech revolution. Banks and financial institutions are tasked with using data to gain better insights, to mitigate risk, and make more sound decisions from internal practices and consumer-facing products. Big data is only growing larger it presents both risks and rewards for financial services.