A New York-based technology company is looking to set up in Asia, depending on what kind of deals it strikes with large banks.
KapitalWise is in talks with large consumer banks about using its machine-learning tech to personalize offers via mobile devices, including HSBC and Standard Chartered in Hong Kong, and CBA for its digital offering in Indonesia.
Chief revenue officer Landon Ewers says the company plans to open an office in Hong Kong or Singapore in order to support its business in the region.
KapitalWise uses artificial intelligence and predictive analytics to help banks tailor offerings based on customer behavior. Instead of relying on traditional demographic information, the company uses data such as correlations among a customer’s shopping habits and their level of financial savvy to let banks offer a range of services, from overdraft warnings to selecting suitable investment products.
The company got its start pitching its services to U.S. retail banks, which have been losing touch with customers as they have curtailed branch networks. “The rapid decline of branch activity means banks don’t have any more one-on-one conversations with their customers,” Ewers said.
But KapitalWise now sees more opportunity to market its services to banks in emerging markets. “We see an immediate opportunity with banks using old tech and that want to leapfrog and break into underserved markets,” Ewers told DigFin.
The startup, incorporated in April 2017, began business in the wealth-management space, helping nudge customers into putting spare cash into savings and investment products.
Banks don't have any more one-on-one conversations with their customers
Given other fintechs already dominate that space, such as Acorns and Stash, KapitalWise needed to pivot, and it found that banks liked its user interfaces to encourage certain behavior from customers.
“B2C is too hard,” Ewers said. “But banks want to deploy a similar user experience.”
He says the company is finding more demand among banks operating in emerging markets. Many U.S. banks are already on the path to personalized digital offerings, and have the budgets to hire teams of data scientists. This is not the case with many banks in emerging markets, Ewers says.
KapitalWise has one customer already: in South Africa its tech is being put into production by Barclays Africa Group, which initially put KapitalWise in its incubator program, using its “nudge” tech to provide an Acorns-like service to millennial customers.
“With U.S. banks, we can sell specific features that fit into their A.I. strategies,” Ewers said. “In emerging markets, banks haven’t locked in their tech strategies, and we can be more of a partner.”