<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Salesforce</span></p><p class="caption">Kathy Baxter, Salesforce's AI ethics architect.</p></div><p></p></div></div></p><ul class="summary-list"><li><strong>Kathy Baxter is Salesforce's AI ethics architect, responsible for policing the company's deployment of artificial intelligence.</strong></li><li><strong>She invented her own job description and sent it to Salesforce's chief scientist, who then forwarded it on to CEO Marc Benioff. Six days later she got the job.</strong></li><li><strong>Baxter told Business Insider about what being an "ethics architect" actually involves, and why Google and Amazon are not getting everything right on AI.</strong></li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li></ul><p>Silicon Valley is full of baffling job titles. It's not uncommon for companies to list jobs for "evangelist," while <a href="https://edition.cnn.com/2015/03/13/tech/parisa-tabriz-security-princess-google-hack/index.html">Google even employs a "security princess."</a> One executive with an unusual job title is Kathy Baxter, Salesforce's "AI ethics architect," so Business Insider sat down with her to ask what it means.</p><p>Before joining Salesforce in 2015, Baxter spent a decade at Google, where she says conversations about the dangers of AI-driven features like YouTube's autoplay function were bubbling away long before they exploded into public consciousness. She's spent more than 20 years in tech, starting out at Oracle in 1998.</p><p>The question of what is an AI ethics architect makes Baxter laugh. An architect in tech is, "anybody that is doing work that spans the entire company," she says. Prior to being Salesforce's AI ethics architect, she was a research architect.</p><p>"I work with the research scientists to think about the societal or ethical implications of the models and the training datasets that they use. And then I work with the product teams that use those models and think about, again training data we might use, and what are some features that we can build into the UI [user interface]," says Baxter.</p><p>"The challenge that we have compared to a Facebook or a Google is that because we're B2B, we are a platform, we can't see our customers' data or their models. So if they are using it in an irresponsible manner there's no way for us to know."</p><p>One way she says the company has built the UI for its Einstein analytics software with ethics in mind is by designing ways it can flag up to customers when they may be unwittingly straying towards algorithmic bias.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/biases-ethics-facial-recognition-ai-mit-joy-buolamwini-2019-1?r=US&amp;IR=T">An MIT researcher who analyzed facial recognition software found eliminating bias in AI is a matter of priorities</a></em></p><p>AI experts and civil rights groups have frequently voiced concern about algorithmic bias amplifying human prejudices. In one example, <a href="https://www.businessinsider.com/amazon-ai-biased-against-women-no-surprise-sandra-wachter-2018-10?r=US&amp;IR=T">Amazon had to scrap an AI recruitment tool which systematically downgraded female candidates</a>, because the training data was disproportionately from male candidates. Salesforce is working to flag exactly these kinds of dangers to clients.</p><p>"If they're using standard objects [standard objects are easily recognizable categories like age or gender] we know that, and we can say 'oh you're using age, you're using race, you might be adding bias into the model' - or zip code, which in the US is a proxy for race. So we can say 'hey you're using zipcode, that can be a proxy for race you may be adding in bias, are you sure you want to do that?'"</p><h2><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Salesforce</span></p><p class="caption">Salesforce's analytics AI can throw up risks of algorithmic bias.</p></div><p></p></div></div>How Kathy Baxter invented her own job</h2><p>Baxter designed her own job description using an in-house set of descriptors: visions, values, methods, metrics, and obstacles. This gets abbreviated to V2MOM.</p><p>She wrote a V2MOM for the role and sent it off to Salesforce's Chief Scientist Richard Socher, who forwarded it on to CEO Marc Benioff. "I pitched it to Richard, he went to Marc with this and Marc was like 'yeah we totally need this.' And six days later I was on his team," she reflects.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Andrew Kelly</span></p><p class="caption">Marc Benioff, CEO of Salesforce</p></div><p></p></div></div></p><p>Even before Baxter got the job, however, Socher was looping her in on conversations with Benioff. "He would pull me in and say 'plus Kathy to weigh in on the ethical implications of this,'" she says.</p><p>Baxter says Benioff's stance on ethical issues is what attracted her to Salesforce in the first place, <a href="https://www.businessinsider.com/marc-benioff-hails-victory-of-proposition-c-2018-11?r=US&amp;IR=T">citing his support for Proposition C</a>, the San Francisco law that passed last year aimed at taxing tech giants and diverting the money to combat homelessness in the city.</p><p>Recently news emerged that Salesforce had banned customers from using <a href="https://www.businessinsider.com/salesforce-semi-automatic-gun-sales-2019-5?r=US&amp;IR=T">its software to sell semi-automatic weapons</a>. Much as the company touts its moral compass however, its reputation isn't spotless. In March, 50 women launched a lawsuit against the company alleging that its data tools were <a href="https://www.cnbc.com/2019/03/27/lawsuit-claims-salesforce-worked-with-sex-trafficking-site-backpage.html">used by notorious sex-trafficking site Backpage</a>.</p><h2>Silicon Valley's AI woes</h2><p>As a customer relationship management service, Salesforce doesn't get as much press scrutiny on the misuse of AI as some of the consumer tech giants - but part Baxter's job is PR, attending conferences and telling people what Salesforce's approach to AI is.</p><p>When it comes to the other big companies, Baxter sees a wide range of public approaches to AI. Some Silicon Valley giants are necessarily vocal, she says, while others are notably absent from the slew of AI ethics-focused events she attends.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/joanna-bryson-says-google-is-a-world-power-2019-6?r=US&amp;IR=T">A member of Google's disastrous AI council says the company needs to be treated like a "world power"</a></em></p><p>"I don't see anyone from Amazon participating in these [AI ethics] conferences... So it's hard to know what are the conversations that are happening internally because they're not talking about it. All we can do is just make guesses about their motivations, their goals, their mindsets."</p><p>Amazon is not entirely silent on the issue of the ethical use of its AI. Amazon Web Services' general manager of artificial intelligence, Matt Wood, and VP of Global Public Policy Michael Punke, engaged in a public back-and-forth with researchers following <a href="http://www.aies-conference.com/wp-content/uploads/2019/01/AIES-19_paper_223.pdf">a paper published in January</a> highlighting racial and gender bias in its systems. Wood called the paper's conclusions "misleading," and subsequently <a href="https://www.businessinsider.com/ai-experts-call-on-amazon-not-to-sell-rekognition-software-to-police-2019-4?r=US&amp;IR=T">55 AI experts signed an open letter calling on the company not to sell its facial recognition software to law enforcement</a>.</p><p>Baxter contrasts Amazon's public policy with Microsoft's Brad Smith, who has <a href="https://www.businessinsider.com/microsoft-refuses-to-sell-facial-recognition-tech-to-us-police-force-2019-4?r=US&amp;IR=T">spoken publicly about the company's decision to sell its facial recognition technology to a US prison</a>, while refusing to sell the technology for use on police body-mounted cameras. "Regardless of how someone might feel about the decisions they're making, they talk about it," she says.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>AP Photo/Francisco Seco</span></p><p class="caption">President of Microsoft Brad Smith.</p></div><p></p></div></div></p><p>Baxter also touched on her alma mater Google, whose ambitions for an advisory AI council were quickly scuppered after outrage at the appointment of Kay Coles James, the head of a right-wing think tank who has been accused of anti-LGBTQ and anti-immigrant rhetoric. The company <a href="https://www.businessinsider.com/google-cancels-ai-ethics-board-2019-4?r=US&amp;IR=T">disbanded the council just over a week after announcing it to the world</a>.</p><p>"It's surprising how it was handled. I think, if you really want a really diverse set of voices to participate in a conversation sometimes it can be very difficult to get people on the other side - so non-Silicon Valley, non-liberal California hippy-dippy granola nuts - to want to participate. And so they did find a voice on the other side - unfortunately, it was a very extremist voice," she says.</p><p>Baxter says that during her tenure at Google, conversations were already starting to get underway about the ethics of certain features like YouTube's autoplay function, which has been criticised among other things for <a href="https://www.nytimes.com/interactive/2019/06/08/technology/youtube-radical.html?mtrref=www.businessinsider.com">pushing users towards radicalizing content</a> and <a href="https://www.businessinsider.com/epic-games-suspends-fortnite-ads-on-youtube-following-pedophile-revelations-2019-2?r=US&amp;IR=T">enabling pedophiles to watch sexualized videos of children</a>.</p><p>"Those were questions that were being asked for quite a long time, they've only now in recent years come into the public discourse because people felt like they haven't been doing the right thing," Baxter explains.</p><p>In <a href="https://medium.com/datadriveninvestor/creating-the-world-we-want-7face86fad09">a Medium blog published in January</a>, Baxter wrote that the challenge for an ethicist in Silicon Valley isn't coming up against hostility, but apathy. "You will likely get lots of nodding heads that what you are proposing sounds great and then… radio silence."</p><p>Baxter is no stranger to uphill struggles. She told BI that when working at Google she had pushed the company's executives to focus on improving Google Search's job-hunting capabilities, after conducting a study in 2014 which found this was where the search engine was letting the side down on giving users important information.</p><p>"I was really trying to help the executives get out of that Silicon Valley bubble. Because they didn't understand the set of people that are living on the financial edge, they start the day by going to their ATM and getting a readout of how much money is in their account to decide whether or not they can buy lunch that day."</p><p>She saw Google <a href="https://www.cnbc.com/2018/08/01/google-job-search-is-using-ai-to-make-job-searching-a-whole-lot-easier.html">released a specific job-seeking feature last year</a>, three years after she left the company. "That's a pretty big time-gap. That's a lag," she says.</p><p>With public anxieties about the role of AI bound to intensify, people like Baxter will have their work cut out whipping executives into shape if they're to prevent their companies' products from unwittingly prejudicing people. For her, part of the solution is making Silicon Valley less homogeneous.</p><p>"Just like we see this lack of diversity in AI, we know there's a lack of diversity in tech as it is. It's the very well-educated, young white males that are building these products and they have a very different life experience," she says. "So when you're making decisions about what is useful, what is important for people, you're coming with a different experience."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/apple-launched-6000-mac-pro-2019-worldwide-developer-conference-2019-6">Apple just launched a $6,000 Mac Pro, available this fall</a></h3>        <div>                    </div>    </div>

How Salesforce's AI ethics chief pitched her own job and got it approved by Marc Benioff within 6 days

<p><span style="font-weight: 400;">The Federal Reserve has rolled out a </span><a href="https://www.federalreserve.gov/releases/lbr/current/default.htm"><span style="font-weight: 400;">list of top US banks by assets</span></a><span style="font-weight: 400;">, and we've broken down exactly how these banking giants manage to stay ahead of the competition. For decades banks have been merging, partnering, and expanding </span><span>- </span><span style="font-weight: 400;">so much so that the top four banks now account for 50% of all US banking assets. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">Here are the top 10 banks in the US, with key insights as to how they got there, where they plan to go in the future, and how smaller banks can compete in the industry. </span></p><h2><span style="font-weight: 400;">1. JPMorgan Chase - $2.74 Trillion Assets Under Administration (AUM)</span></h2><p><span style="font-weight: 400;">By targeting digitally-savvy consumers and introducing <a href="https://www.businessinsider.com/the-ai-in-banking-report-2019-6">artificial intelligence</a> to its offerings, JPMorgan Chase has been able to outperform its competitors. JPMorgan is playing the long-game by </span><a href="https://www.businessinsider.com/jamie-dimon-jpmorgan-chase-ceo-says-bank-winning-millennials-2019-7"><span style="font-weight: 400;">acquiring millennials</span></a><span style="font-weight: 400;"> through digital channels </span><span>- </span><span style="font-weight: 400;">and hopes to convert them to higher-value customers later on.</span></p><p><span style="font-weight: 400;">Additionally, JPMorgan is investing heavily in <a href="https://www.businessinsider.com/banking-industry-trends">banking technology</a>, and boasts </span><a href="https://www.businessinsider.com/heres-a-breakdown-of-how-much-us-banks-are-spending-on-technology-2019-3"><span style="font-weight: 400;">the biggest tech budget of all banks</span></a><span style="font-weight: 400;"> in 2019 with $11.4 billion. A key focus of these funds is identifying use cases to implement artificial intelligence, such as enabling investment banking clients to access analyst reports and stock information through voice assistants.</span></p><h2><span style="font-weight: 400;">2. Bank of America - $2.38 Trillion AUM</span></h2><p><span style="font-weight: 400;">Bank of America has been able to cut costs and appeal to young users by adapting strategies for the digital age. The bank's digitized branches </span><span>- </span><span style="font-weight: 400;">which allow customers to access contactless ATMs and connect with call centers via video-conference technology </span><span>- </span><span style="font-weight: 400;">experienced half the traffic of nearby branches only five months after launching in 2017. </span></p><p><span style="font-weight: 400;">Bank of America's digital-only services Zelle and Erica have also re-defined what the company offers its <a href="https://www.businessinsider.com/retail-banking-industry">retail banking</a> customers. Zelle allows users to digitally send real-time payments to friends and family, and by integrating this feature into its mobile app, Bank of America has opened the door for increased consumer engagement. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">Bank of America has also seen success with its voice-enabled assistant, Erica, which</span><span style="font-weight: 400;"> provides customers the ability to conduct peer-to-peer payments as well as bill payments. </span><span style="font-weight: 400;">Since officially launching in 2017, Erica has surpassed a massive 7 million users per year.</span></p><h2><span style="font-weight: 400;">3. Citigroup - $1.96 Trillion AUM</span></h2><p><span style="font-weight: 400;">For three years in a row, Citibank has been named the </span><a href="https://www.businessinsider.com/citibank-named-kiplingers-best-bank-for-high-net-worth-families-2019-7"><span style="font-weight: 400;">"Best Bank for High-Net-Worth Families"</span></a><span style="font-weight: 400;"> by Kiplinger's Personal Finance. For customers that maintain $200,000 in deposit, retirement, and investment accounts, the bank grants them access to its Citigold Package. </span></p><p><span style="font-weight: 400;">Business Insider Intelligence's Mobile Banking Competitive Edge Study also shows that </span><a href="https://www.businessinsider.com/the-mobile-banking-competitive-edge-report-2018-11"><span style="font-weight: 400;">Citi took the top spot for mobile banking features</span></a><span style="font-weight: 400;">, as rated by consumers. Citi saw a massive increase in digital banking users in 2019 </span><span>- </span><span style="font-weight: 400;"></span><span style="font-weight: 400;">up 11.3% year-over-year </span><span>- </span><span style="font-weight: 400;">and its mobile users grew twice as fast at 22.4% YoY. This growth, combined with the company's electronic client statements surging to 50%, demonstrates that Citi has secured its spot as one of the </span><span style="font-weight: 400;">best banks in US.</span></p><h2><span style="font-weight: 400;">4. Wells Fargo &amp; Co. - $1.89 Trillion AUM</span></h2><p><span style="font-weight: 400;">Wells Fargo is following the lead of top competitors by targeting millennials through <a href="https://www.businessinsider.com/mobile-banking-market-trends">mobile banking</a> services. Pay with Wells Fargo is a mobile service where users can access their most used payment features before signing into the app. Additionally, Wells Fargo's app Greenhouse helps customers simplify their bills and track spending. </span></p><p><span style="font-weight: 400;">Joining the contactless payment market has also bolstered Wells Fargo's position as a leading bank. With 78% of the top 100 US merchants accepting contactless transactions, providing contactless credit and debit cards helps attract users who prefer digital banking methods </span><span>- </span><span style="font-weight: 400;">and according to Business Insider Intelligence, 44% of US consumers prefer contactless payments.</span></p><h2><span style="font-weight: 400;">5. Goldman Sachs -  $925 Billion AUM</span></h2><p><span style="font-weight: 400;">Since launching Marcus, an online bank that offers customers </span><span style="font-weight: 400;">fixed-rate, fee-free unsecured loans and high-yield savings accounts, Goldman Sachs has become one of the largest banks in the US. The banking giant has made several acquisitions for Marcus, including personal finance management app Clarity Money. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">Clarity Money was an early step Goldman took to breaking into the digital-only banking industry, and allows users to open a Marcus savings account directly through their mobile device.</span></p><p><span style="font-weight: 400;">The firm also partnered with Apple to develop their co-brand Apple Card - giving users who have an associated iPhone access to rewards, money management features, and the ability to choose either a digital or physical card.</span></p><p><span style="font-weight: 400;">Acquiring and investing in startups and other businesses, combined with the decision to explore new ways to integrate technology with existing banking services, has allowed Goldman Sachs to become one of the largest banks in the US.</span></p><h2><span style="font-weight: 400;">6. Morgan Stanely -  $875 Billion AUM</span></h2><p><span style="font-weight: 400;">After acquiring Solium Capital, a global provider of Software-as-a-Service for stock administration, </span><span style="font-weight: 400;">financial reporting, and compliance</span><span style="font-weight: 400;">, Morgan Stanely gained access to new technology and millennial employees who propelled the company into the digital banking market. </span></p><p><span style="font-weight: 400;">By 2030, it is projected that millenials in North America will control </span><a href="https://www.businessinsider.com/morgan-stanley-acquires-solium-capital-2019-2"><span style="font-weight: 400;">$20 trillion of global assets</span></a><span style="font-weight: 400;">, and Morgan Stanely is looking at Solium's young clients as its future affluent customers. </span></p><p><span style="font-weight: 400;">Additionally, </span><a href="https://www.businessinsider.com/morgan-stanley-launches-digital-vault-for-wealth-management-2019-7"><span style="font-weight: 400;">Morgan Stanely partnered with Box</span></a><span style="font-weight: 400;">,a cloud content management service, to launch a "Digital Vault," an encrypted, cloud-based platform that allows Morgan Stanley's wealth management clients to easily share financial documents. The firm's wealth management business already contributes 44% of its revenue, and the "Digital Vault" is expected to accelerate this segment even further. </span></p><h2><span style="font-weight: 400;">7. U.S. Bancorp -  $475 Billion AUM</span></h2><p><span style="font-weight: 400;">U.S. Bancorp, the parent company of U.S. Bank National Association, earned a spot on the list of top US banks due to its commitment to competing with tech giants making their way into the banking industry.  </span></p><p><span style="font-weight: 400;">With Facebook, Amazon, Apple, and Google all announcing their desire to launch banking services, U.S. Bancorp decided to improve its own technology. According to Business Insider Intelligence, </span><span style="font-weight: 400;">Terry Dolan </span><span>-</span><span style="font-weight: 400;">chief financial officer of U.S. Bancorp </span><span>- </span><span style="font-weight: 400;">said that the bank plans to partner with fintechs inorder to maintain competitive banking technology</span><span style="font-weight: 400;">. </span></p><h2><span style="font-weight: 400;">8. PNC Financial Services -  $392 Billion AUM</span></h2><p><span style="font-weight: 400;">PNC Bank is known as a top bank in the US because it offers specialized perks and services to customers while developing original products. In 2017 PNC began offering mobile payment options to corporate clients who hold Visa commercial cards </span><span>- </span><span style="font-weight: 400;">allowing them to leverage popular mobile wallets like Apple Pay.<div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">Additionally, in 2019 PNC piloted credit cards with card verification values that periodically refresh, in the hopes of combating fraud. Fraudsters are able to guess three-digit CVV codes relatively easily due to the limited number of permutations; but periodically changing CVVs makes stolen data less valuable. </span></p><h2><span style="font-weight: 400;">9. TD Bank -  $384 Billion AUM</span></h2><p><span style="font-weight: 400;">In addition to having extensive influence abroad, TD Bank has become one of the largest banks in the US due to its integration of artificial intelligence and utilization of digital technology. </span></p><p><span style="font-weight: 400;">TD Bank partnered with to launch Clari, an AI-powered chatbot, in Canada. Clari answers customers' questions via text message and notifies them when credit card payments are due or how much they spent at a certain store. Chatbots cut down on call volume, and Clari's success in Canada will likely influence TD Bank to develop a chatbot for its US branches. </span></p><p><span style="font-weight: 400;">In another partnership, TD Bank teamed up with fintech provider Amount to leverage its digital lending technology, which comes with a suite of tools including fraud detection and account verification. </span></p><h2><span style="font-weight: 400;">10. Capital One -  $373 Billion AUM</span></h2><p><span style="font-weight: 400;">Despite its recent </span><a href="https://www.businessinsider.com/capitol-one-data-breach-has-heavy-implications-2019-7"><span style="font-weight: 400;">data breach</span></a><span style="font-weight: 400;">, Capital One still managed to make the list of top US banks, likely due to its ongoing commitment to digital transformation.</span></p><p><span style="font-weight: 400;">Capital One increased its technology staff from 2,500 in 2011 to 9,000 in 2019, launched Eno </span><span>- </span><span style="font-weight: 400;">its AI-powered chatbot, similar to Bank of America's Erica </span><span>- </span><span style="font-weight: 400;">and is in the midst of a </span><a href="https://www.businessinsider.com/rob-alexander-capitol-one-cio-leads-digital-transformation-plan-2019-7"><span style="font-weight: 400;">multi-year migration of its back-end software development tools to the cloud</span></a><span style="font-weight: 400;">. </span></p><p><span style="font-weight: 400;">Capital One also acquired fintech United Income in 2019, a digital platform that offers wealth management services for people moving into retirement. The fintech combines both technological capabilities with human facets, like providing </span><span style="font-weight: 400;">access to a team of wealth managers </span><span>- </span><span style="font-weight: 400;"></span><span style="font-weight: 400;">making it attractive for consumers who still desire human interaction. </span></p><h1><span style="font-weight: 400;">How can small banks compete?</span></h1><p><span style="font-weight: 400;">Breaking into the digital banking industry is key for smaller firms looking to become major US banks. <a href="https://www.businessinsider.com/evolution-of-the-us-neobank-market">Neobanks</a> </span><span>- </span><span style="font-weight: 400;">digital-only banks that aren't tied to traditional banking technology or expensive physical branches </span><span>- </span><span style="font-weight: 400;">are gaining steam in the US and </span><a href="https://www.businessinsider.com/neobanks-raise-cash-at-record-rates-business-insider-2019-8"><span style="font-weight: 400;">secured a record $2.5 billion globally</span></a><span style="font-weight: 400;"> in funding for the first half of 2019. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">Chime, a San Francisco-based neobank, took about four years to reach one million users in 2018. It has since acquired over 4 million users </span><span>- </span><span style="font-weight: 400;">quadrupling its user base in just one year. The competition put forward by digital-only banks will eventually force traditional banking leaders to revamp their banking practices and offerings due to the increasing digital demands of consumers.</span></p><h1><span style="font-weight: 400;">Banking Industry Analysis</span></h1><p><span style="font-weight: 400;">The banking industry is constantly undergoing change in the digital age, and it's important for its biggest decision-makers to stay informed of how the leading US banks continue to garner success. </span></p><p><span style="font-weight: 400;">That's why Business Insider Intelligence is launching Banking, our newest coverage area, to keep you up to date on strategies and tactics  of the </span><span style="font-weight: 400;">largest banks in the US.</span></p><h3><a href="https://www.businessinsider.com/intelligence/banking?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=report_teaser&amp;itm_content=learn_more_text&amp;itm_term=bundle_subscription_text_link-largest-banks-us-list">Click here to obtain an exclusive FREE preview of Banking!</a></h3><p class="tagline"><a href="https://www.businessinsider.com/intelligence/10-up-and-coming-fintechs-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=finance&amp;itm_campaign=10-up-and-coming-fintechs-2019"></a></p>

Here is a list of the largest banks in the United States by assets

Post demonetisation, the whole nation has understood that all you need to survive is your smartphone. You can literally buy candies and also transfer money with your smartphones and it’s also timesaving.<br />
<br />
"In the near term, wallets will do well as they are more popular,” Niren Shah, MD of Norwest Venture Partners, told ET.<br />
<br /> So far, people have grabbed whatever is easily available to pay for coffee, bills, movie tickets, cab rides and just about anything, and here, m-wallet <keyword id="6357120" type="UNKNOWN" weightage="20" keywordseo="PayTM">Paytm</keyword> has scored over others.<br />
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Users comfortable with mobile wallets today could shift to an easier digital platform.<br />
<br /> "Frictionless payments are the future,” R Venkatachalam, managing director for India &amp; <keyword id="52011" type="CITY" weightage="20" keywordseo="South-Asia">South Asia</keyword> at FIS Global, a global provider of financial services technology. That is, any payment mechanism which is effortless, without requiring users to remember too many passwords, PINs etc, perhaps biometrics-enabled, told ET.<br />
<br />
There's more to providing a smooth digital payment experience than aspects such as security and ability to attract customers who are used to transacting in cash and are reluctant to change.<br />
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"Three things are important for any payment option - access, interoperability and financial sustainability of the operator,” said Anant Bhagwati, partner, Bain &amp; Company.<br />
<br /> People are using mobile wallets as they offer the least hurdles to complete a payment. Paytm alone has 173 million users but they have limitations. They are not interoperable and transferring money requires sender and receiver to have the same company's account - it's Paytm to Paytm, <keyword id="143842" type="UNKNOWN" weightage="20" keywordseo="Mobikwik">MobiKwik</keyword> to MobiKwik and <keyword id="6377963" type="UNKNOWN" weightage="20" keywordseo="Freecharge">Freecharge</keyword> to Freecharge.<br />
<br />
And furthermore, the money transferred to a wallet does not earn interest. Small merchants such as owners of corner shops and neighbourhood kirana stores can't draw more than Rs 25,000 a month from a digital wallet, which affects cash flow. Even the founders of some mobile wallet companies are not so optimistic about their future if challenges like interoperability persist.<br />
<br /> "That's why we don't call it a Paytm wallet - it's a Paytm account that people have with us,” <keyword id="198636" type="PERSON" weightage="20" keywordseo="Vijay-Shekhar-Sharma">Vijay Shekhar Sharma</keyword>, founder of Paytm, told ET.<br />
<br /> The account could be a digital wallet, <keyword id="6358921" type="COMPANY" weightage="20" keywordseo="UPI">UPI</keyword> or anything else that is permitted.<br />
<br />
"The fight is about owning consumers and merchants - protocols can change,”, Sharma said.<br />
<br />
At present, wallet companies are not allowed to enable users to access UPI, which enables funds to be transferred from one bank account to another. By the end of 2017, it's quite possible that people could be ditching their digital wallets and opting for UPI or even voice commands to digital avatars to complete payments.<br />
<br />
"Wallets need to mature, evolve into something else and be interoperable to be relevant,” Bipin Preet Singh, founder of MobiKwik, a wallet company with 45 million users, told ET.<br />
<br />
In India, 27% of the more than 1 billion mobile phone users have smartphones - compared with 70% in China - and the rest use feature phones. Affordability, among other factors, has hindered the faster adoption of smartphones. The digital payment option for feature phones is USSD, or Unstructured Supplementary Service Data, which transmits data over GSM networks and is popular in Kenya, Bangladesh, Cambodia and Zimbabwe with their respective services, mPesa, bKash, Wing and EcoCash.<br />
<br />
Plastic Lacks Reach; UPI Fills Void If mobile wallets face multiple headwinds, one of the oldest cashless options - credit and debit cards - have limited reach. About 800 million people carry plastic (mostly debit cards, less than 10% are credit cards) and they are generally used to withdraw cash from ATMs.<br />
<br />
Today, digital wallets are popular. Tomorrow, direct payment systems will score over intermediaries such as mobile wallet and plastic money companies.

Mobile wallets will lose their popularity with time, here’s why

<p>On Sunday, July 5, Greece will have a referendum on whether to accept an accord with its creditors. This weekend <a href="http://www.businessinsider.com/this-weekend-is-greeces-absolute-last-chance-to-get-a-bailout-before-it-defaults-2015-6">could be Greece's last chance</a> to get a bailout, or possibly default to the International Monetary Fund.</p><p>Not only could this be catastrophic for Greece as a country, which <a href="http://www.telegraph.co.uk/finance/economics/11511457/What-happens-if-Greece-defaults-to-the-International-Monetary-Fund.html">also owes billions</a> to the European Central Bank and European Commission, but it could be devastating for the Greek people, <a href="http://www.express.co.uk/finance/city/581754/What-happens-if-Greece-defaults">who are already limited</a> to a maximum €60 (about US$67) ATM withdrawal in the wake of banks closing.</p><p>Everyone already seems to be under a tremendous amount of stress, as evidenced by recent pictures from overseas.</p><h3>An older woman with "oxi" ("no" in Greek) stickers on her face joins a demonstration in Athens on Friday, July 3. This group is in favor of a No vote on whether Greeks should accept more austerity in return for bailout loans.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>Most of Greece's banks shuttered on Thursday, leaving Greece bracing for more chaos on the streets. Here, a member of Communist-affiliated PAME labor union shouts at police. </h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>People stand on both sides of the issue. A referendum campaign poster calling for a Yes ("nai") vote has been sprayed with graffiti that reads No.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>Two people stop to read the paper on July 3. An opinion poll on Greece's bailout referendum revealed that, so far, there is a slight lead for the Yes vote, at 44.8%, while the No vote came in at 43.4%.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>Rallies draw crowds all over Athens. These supporters of the No vote think Greeks should not accept more austerity in return for a bailout.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>On the other side, demonstrators voice their opinion with signs that read ''Yes to Greece, Yes to the Euro,'' among dozens of Greek flags.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>People are trying to drum up as much support as they can for their side of the vote. Here, a woman puts up a "Yes to Greece, Yes to the Euro" referendum campaign poster in Athens.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>Greece closed down most of its banks on Thursday, fearing a rush of people trying to withdraw their money before the referendum. That hasn't stopped people from lining up to withdraw from the remaining open ATMs.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p><h3> </h3><h3>Tensions run high on the streets. Here, police watching for riots detain a demonstrator before a rally organized by supporters of the No vote.</h3><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/facts-about-greek-economy-bailout-euro-crisis-2015-6">6 mind-blowing facts about Greece's economy</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="JueTR5dTo3QyUhdNPH4LuPBLRuUjzGwo" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

9 photos that show the tension in Greece right now

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://www.atombank.co.uk/newsroom">Atom Bank</a></span></p><p class="caption">A demo of Atom Bank's facial recognition security set up in action</p></div><p></p></div></div>A researcher claims to have discovered a security vulnerability in 2 banks' mobile phone apps that lets someone get into the account with just a picture of the account holders.</p><p>Meaghan Johnson, director of research at fintech consultancy 11:FS, says she found that people could access her account using an iPhone "Live Photo" of her. "Live Photos" capture and show limited movement and this tricks the app into thinking the account holder is actually there.</p><p>Johnson told Business Insider: "What you have to do is log in using biometrics. Once you log in to the secure site on the app just blink a few times and it records you blinking. We got a picture of me blinking which then was a Live Photo. We pressed down on the Live Photo facing my phone with the facial recognition screen open. After 5 seconds it picked it up and it logged us straight into the app."</p><p>This vulnerability only applies to banks that are using facial recognition as a method of logging in, which at the moment is a limited number.</p><p>But the number is growing. The discovery comes days after Standard Chartered bank <a href="https://www.ft.com/content/080a7d70-60ad-11e6-ae3f-77baadeb1c93">announced plans to do away with passwords and roll out biometric security to all its 5 million customers.</a></p><p>It is one of a number of large banks and financial institutions pursuing "biometric security" measures - identification techniques such as fingerprint scanning, facial recognition, and voice recognition. MasterCard, for example, is <a href="http://uk.businessinsider.com/mastercard-trials-selfie-pay-2015-8">exploring the use of payment authentification through selfies</a> and the World Economic Forum recently <a href="http://uk.businessinsider.com/world-economic-forum-biometrics-cloud-computing-blockchain-ai-finance-2016-8">singled out biometrics as one of the key technologies that will transform finance in the next few decades.</a></p><p>Johnson did not name the 2 banks where she was able to use iPhone Live photos to get into the app, saying only that it was "a bank in the States and a new challenger bank in the <keyword id="6354868" type="COUNTRY" weightage="60" keywordseo="UK">UK</keyword>."</p><p>As far as BI is aware, <a href="http://uk.businessinsider.com/atom-bank-launches-in-the-uk-2016-4">new app-only Atom Bank</a> is the only challenger that currently offers facial recognition technology to let users log in to its app.</p><p>Atom admitted to BI that breaking into the app using a live photo would be possible but emphasised that this is just one of a number of security measures its app uses and to get to a stage where you could use the live photo would be highly unlikely. Atom also authenticates its app on customer's phones, for example, so you can only log into your account on your phone. This would mean the person with the photo would have to steal your device.</p><p>A spokesperson for Atom told BI:</p><p style="padding-left: 30px;">"Not only does someone need your specific device, but we enforce the need for your device to have a device PIN. As such, you need to steal someones device. You then need to break their device PIN. We also check for jailbroken devices (i.e. If you jailbreak the device in order to break the PIN, then we will not allow jail-broken devices to access either).</p><p style="padding-left: 30px;">"As with any security measure, people will try to find ways to bypass facial recognition. People may seek to use masks or moving images of a face to gain access via your device, and it if it looks very much like the real customer's face the app will grant access. </p><p style="padding-left: 30px;">"Does this mean your bank security has been compromised? No. We have built layers of security into our banking app to ensure that even someone with your phone and your face can have only limited access. For example, in order to set up a payment to a new payee (as the fraudster would need to do to steal your money) a further level of authentication would be required, such as voice recognition or passcode."</p><p>Johnson admits that the security vulnerability is a limited one, saying: "You have to have a lot of moving pieces together, it's likely that it would come from family or a friend or a colleague. Someone would have to take your phone if it was unlocked, they would have to have a picture of you blinking, and then they would basically have to do this without you being there."<span><br /></span></p><p>But she added: "If I were a bank that offered this I would just inform your customers that there are ways in which it is not secure. When you go to an ATM it says be careful of your PIN, maybe you need a warning like that."</p><p>A spokesperson for Atom said: "<span>Using your face offers a convenient and safe way to access your app, but customers can also take sensible precautions to protect themselves, such as using the standard security features that protect their devices - such as your phone PIN or fingerprint access to ensure that access to your device is inherently difficult."</span></p><p>Johnson says: "This is kind of the first generation of biometric solutions - face recognition, voice recognition, fingerprint. I think the second generation techniques like pulse recognition, iris recognition, vein and heartbeat recognition will be much more secure."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/malcolm-gladwell-revisionist-history-donate-princeton-vassar-bowdoin-tipping-point-outliers-blink-2016-7">MALCOLM GLADWELL: 'Anyone who gives a single dollar to Princeton has completely lost their mind' </a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="tlNzV5NDE68LblejgkI-6sByYCuoiDZ7" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

A researcher claims 2 banks apps can be hacked using iPhone's 'Live Photos'

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Ffrees</span></p><p class="caption">Alex Letts, the CEO of Ffrees, which is launching the 'U' account.</p></div><p></p></div></div>Two new startups are gunning to get their cards into the wallets of tech-savvy Brits.</p><p>Soldo and the "U" account are entering an already crowded market of startups pitching some form of card tied to a mobile app.</p><p>There are app-only startup banks (<a href="http://uk.businessinsider.com/fintech-atom-bank-raising-100-million-to-get-into-mortgages-2016-9">Atom</a>, <a href="http://uk.businessinsider.com/monzo-interim-48-million-funding-round-2016-10">Monzo</a>, <a href="http://uk.businessinsider.com/app-only-starling-bank-gets-fca-licence-and-plans-january-2017-launch-2016-7">Starling</a>, <a href="http://uk.businessinsider.com/startup-bank-tandem-crowdfunds-1-million-on-seedrs-in-around-15-minutes-2016-5">Tandem</a>); foreign exchange cards (<a href="http://uk.businessinsider.com/revolut-business-sign-ups-fintech-fx-2016-9">Revolut</a>, <a href="http://uk.businessinsider.com/travelex-launches-fee-free-international-card-supercard-2016-6">SuperCard</a>); spending management apps (<a href="http://uk.businessinsider.com/fintech-loot-growth-funding-banking-generation-snapchat-2016-11">Loot</a>); business accounts (<a href="http://uk.businessinsider.com/tide-bank-launch-funding-brexit-perfect-scenario-2016-7">Tide</a>); accounts for migrants and the low paid (<a href="http://uk.businessinsider.com/inside-monese-the-mobile-banking-app-for-migrants-2015-10">Monese</a>, <a href="http://uk.businessinsider.com/sir-alex-ferguson-invests-in-fintech-startup-pockit-2016-9">Pockit</a>); and even a card to help you manage all your cards in one (<a href="http://uk.businessinsider.com/london-fintech-startup-curve-tops-up-seed-round-with-2-million-2016-9">Curve</a>). Collectively, these startups have raised hundreds of millions of pounds.</p><p>The question is: can they all survive?</p><h2>'I'm not going after the digital glitterati'</h2><p>The latest new entrants are Soldo and the "U" account. Soldo, which began a PR push this week, is a banking services app that lets multiple people use one account. It's pitched at parents who want to people able to give money to their children digitally.</p><p>CEO and founder Carlo Gualandri told Business Insider: "I can give my son £100 but then say you cannot spend more than £20 a month on your PlayStation."</p><p>Parents can allocate money and control multiple cards from one app. "We've actually been testing this system live for over a year," Gualandri says. "I've actually personally been living out of Soldo since Spring 2015. If Soldo doesn't work, we don't eat. Now my son is living in the US and spending and living through Soldo."</p><p>Meanwhile, digital current account Ffrees pivoted earlier this month to launch a new app-based product, the "U" account. The "U" account offers a pre-paid card linked to an app which allows people to put their money in different digital sub-accounts to help them budget and save.</p><p><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><p class="source"><span>Soldo</span></p><p class="caption">Carlo Gualandri, Founder &amp; CEO of Soldo.</p></div><p></p></div></div>"U"'s CEO Alex Letts told business Insider: "I'm not going after the digital glitterati, I'm not going after the lending and savings market, I'm going after providing a bank account to people who live in Blackpool, Burnley, Hull, who are really struggling to manage their bank accounts properly and feel very badly let down by the banks."</p><p>The "U" account and Soldo face the same two challenges all the other card startups do: competition and a fear that they may struggle to make money.</p><p>Gualandri says: "The <keyword id="6354868" type="COUNTRY" weightage="60" keywordseo="UK">UK</keyword> is very rich in offerings. Every other country possibly has one, perhaps two. The UK market is very crowded." Soldo is launching simultaneously in Italy, which helps its chances.</p><p>Gualandri is a serial entrepreneur who made a fortune setting up a digital bank in his native Italy. He has self-funded Soldo and believes it will stand out because of its focus on parents, rather than chasing the millennial market like most other startups.</p><p>"We do only one thing and what we do I don't think there are many, or possibly even any, who do it," he says. "We want to be complimentary to your bank. We're not against banks."</p><p>Letts, who comes from a background in advertising, is also confident that the "U" account will stand out. While others are targeting young, rich millennials with "hipster hype", he is only interested in pitching his product at "people who are not noticed by the metropolitan elite but who are the backbone of the population in many respects."</p><h2>'Quite frankly, I couldn't find a business model'</h2><p>On to the second big question then: can they make money?</p><p>Gualandi isn't worried - Soldo has its business model sorted out. The startup charges a subscription fee for its services of £2 per user per month. The "U" account also charges a monthly subscription fee of up to £10, depending on how much you pay in each month, and charges for bolt-on services such as opening each sub-account.</p><p>But, having surveyed the competition, Gualandri says: "Quite frankly I couldn't find a business model that was compatible with customer expectations. The customer there wants to have things like free ATMs and so on. Those things cost money but it's cool only if it's free - you're in a very challenging situation because you are building a product that will be forever marginally negative."</p><p>Startups like Monzo, Atom, Revolut, and Loot for instance offer their product for free. This is despite the fact that things like ATM withdrawals, card top-ups, and small payments made using the cards cost these companies money. Monzo CEO Tom Blomfield tells me his startup bank loses on average £40 per year per user at the moment.</p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>N26</span></p><p class="caption">German app-only bank N26.</p></div><p></p></div></div>German app-only startup bank <a href="http://uk.businessinsider.com/how-can-fintech-make-a-profit-number26-monese-2016-6">N26 closed 160,000 customer accounts in June</a>, admitting at least some of the closures were because users were making too many ATM withdrawals, which was costly for the startup. (<a href="http://uk.businessinsider.com/how-can-fintech-make-a-profit-number26-monese-2016-6">We raised the issue of fintech profitability back then too.</a>)</p><p>Gualandri says: "You are lucky if between tapping on the tube and buying something bigger once in a while you don't end up negative in terms of cost of the user, especially in the UK. The more users you have, the more money you lose."</p><p>He isn't a lone voice. I've heard similar things said often over the last year by investors, industry insiders and entrepreneurs. ING's head of fintech Benoit Legrand told me in April: <a href="http://uk.businessinsider.com/ing-fintech-boss-benoit-legrand-on-neobanks-and-innovation-2016-4">"T</a><a href="http://uk.businessinsider.com/ing-fintech-boss-benoit-legrand-on-neobanks-and-innovation-2016-4">hey're flourishing everywhere but we're still waiting for the business model to show up. Where is the money? Where is the return?"</a></p><p>Letts says: "I think one of the big problems at the moment is the fintechs are in danger of believing their own hype. We need to be extraordinarily careful not to get too smug and self-satisfied given that we've only just done lift off. A lot of people haven't even done lift off yet and they're talking as if they're going to be the next Ronaldo or Messi - I don't see it."</p><h2>'There are real, serious challenges ahead'</h2><p>Monzo recently gained its banking license and Blomfield says losses on customers will be cut by about £20 a year when it launches its own current accounts early next year. Monzo will do more processing work in-house, rather than paying fees to third parties. The banking license will also allow Monzo to start making money - it plans to offer overdrafts, for example.</p><p>Blomfield adds that £40 loss per user per year compares favourably to banks, which will regularly pay over £100 in marketing and offers to acquire a single customer.</p><p>Still, it's costly work nonetheless. Monzo <a href="http://uk.businessinsider.com/monzo-interim-48-million-funding-round-2016-10">recently raised £4.8 million</a>, in <a href="http://uk.businessinsider.com/mondo-crowdfunding-record-crowdcube-2016-3">addition to £6 million earlier this year</a>, and is in the <a href="http://uk.businessinsider.com/mondo-has-to-raise-at-least-15-million-to-get-its-banking-licence-2016-6">process of raising at least £15 million.</a></p><p>Feeling the pressure on their balance sheets, some startups are starting to add additional revenue streams. N26 recently announced that it was launching a "N26 Black" account, a "Premium" account that comes with insurance from Allianz and costs customers €5.90 a month.</p><p><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><p class="source"><span>Mondo</span></p><p class="caption">Mondo CEO Tom Blomfield</p></div><p></p></div></div>Monese, a bank account pitched at migrants, also switched from a freemium model to a subscription model, with VP of growth Mulenga Agley telling BI at the time: <a href="http://uk.businessinsider.com/how-can-fintech-make-a-profit-number26-monese-2016-6">"A lot of people now are having to look at their entire business and figure out whether it can actually stand up to monetising early on."</a></p><p>Longterm, Blomfield thinks many of the startups in the space will aim to become finance platforms - the Facebook for your money. Monzo's long-term goal is to become a hub for people's financial lives, selling third-party products like insurance and loans through the app and taking a cut of each sale. N26 has set out a similar vision.</p><p>Letts is skeptical. He says: "Under PSD2 [European legislation that will require banks to share customer information] requirements that is a viable long term future, but I've been around long enough to know that an awful lot of people run out of money before the longterm comes around. I'm building a business that is about today's way of doing business, not about tomorrow's way of doing business."</p><p>Whatever happens, most agree that the market will not remain this crowded forever. Letts says: "It is a huge market so I think theoretically it can sustain them all. Do I think they'll all be successful? I think it's extremely unlikely. In any commercial equation, there are winners and losers. Some people execute well and some people who execute badly."</p><p>Blomfield tells me he sees it as a "winner takes most" market, with there likely to be one or two startups that emerge from all this competition. He likens it to the price comparison sites that rose to prominence 10 years ago: today MoneySupermarket.com and GoCompare control the lion's share of the market.</p><p>Letts says: "I think people need to be careful. There are real, serious challenges ahead for some of these people. I think there's a lot of risks involved."</p><p class="tagline"><div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;"><a href="http://read.bi/fintechleadgen"></a><strong> EXCLUSIVE FREE REPORT:</strong><br />5 Top Fintech Predictions by the BI Intelligence Research Team. <strong><a href="http://read.bi/fintechleadgen">Get the Report Now »</a></strong></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/ex-wells-fargo-employee-bankers-abused-customers-2016-10">Ex-Wells Fargo employees reveal how some bankers abused customers</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="lyNTR3NjE6eeFw_BqaT6rpuP-DCPt7nU" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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9 photos that show the tension in Greece right now

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