Fintech Friday – fintech news round-up of the week

Notable developments this week include President Trump revealing he is looking at ways to break up the big US banks

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Trump’s rule book roll back plans go back to the future

President Donald Trump’s plans for regulatory reform took an intriguing turn this week as he revealed he is actively considering ways to break up giant Wall Street banks and revive Glass-Steagall, a Depression-era law separating consumer lending and investment banking, to support the move.

American Banker notes that the 2016 Republican party platform also backed restoring the legal barrier between consumer lending and investment banking, which was repealed in 1999 under a financial deregulation signed by then-President Bill Clinton. Some lawmakers, however, blame the repeal for contributing to the 2008 financial crisis, an argument that Wall Street flatly rejects.

Notably, Trump officials including Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn – both ex-Goldman bankers - support bringing back some version of the 1933 Glass-Steagall law.

American Banker also reports that during a meeting with more than a hundred community bankers on Monday, Trump administration officials made it clear they favoured a system with different rules for small and big banks.

Community bankers have long pushed for two-tiered regulation but policymakers have been generally unwilling or unable to shake up the existing system, which imposes many of the same regulations across the spectrum of institutions.

 
RBS looks to “hybrid bots” to beef up customer services

The Royal Bank of Scotland is rolling out a customer service "hybrid bot" from vendor LivePerson that hands over to a human colleague if questions flummox its artificial intelligence.

According to Finextra, the RBS Assist hybrid bot is a tool that customers can message with everyday queries. Unlike most bots, RBS Assist is integrated with other customer service channels, handing off conversations, back and forth, with human agents. The AI handles routine, administrative tasks, while people take on the more complex, meaningful interactions.

The technology started live testing in January and includes natural language processing techniques backed by machine learning algorithms, enabling RBS to analyse every single line of text that its customers enter during a conversation. Bot conversations will be rated in real time as positive, negative or neutral, which will help RBS determine when human intervention or support is needed.


UK attracts another challenger bank

Banking Technology reports that the UK is set to host yet another challenger bank.

The new upstart, Iam Bank, is billing itself as the “Apple store” of banking and getting ready to launch online and with branches.

Chicago headquartered Iam Bank, like many new banks, is targeting millennials. It plans to roll out free learning and therapy-based financial workshops across the UK and US in September to “educate and empower consumers around their financial decisions” – the “first of its kind”.

Iam is looking to buy a small UK bank, building society or even a credit union with a high street presence. Once it has made this acquisition it plans to obtain its UK banking licence and start to create a branch network.

Other plans include “creating more than 21,000 partnerships with retailers to enable cashback, which the customer can invest into their cash or passive investment accounts”.