Fintech Bytes: Prudential, Riskalyze and Future Proof Festival

A roundup of the rest of the week's fintech headlines.

This week saw the long-awaited introduction of sweeping legislation to regulate the cryptocurrency industry.

Wyoming Republican Cynthia Lummis and New York Democrat Kirsten Gillibrand bought a bill to the Senate that tackles issues like sanctions compliance, stablecoin oversight and energy usage in what Bloomberg described as “one of the most ambitious attempts to regulate the volatile asset class.” While the measure is unlikely to pass before the midterm elections, it could act as a starting point for future negotiations.

However, I’m having a hard time not being cynical about the entire exercise. As I’ve written before, both Lummis and Gillibrand invest personally in bitcoin and receive significant donations from the cryptocurrency industry. They worked directly with the Blockchain Association, a lobbying group that has a history of ignoring the compliance infractions of its members, to draft new rules that are more friendly to the cryptocurrency industry than existing securities laws.

The argument is that laws written in the 1930s aren’t relevant to such a modern creation as cryptocurrency, and that’s a fair point. However, it would be nice if Republican politicians like Lummis applied that logic to literally any other issue.

Fintechs hoping to connect financial advisers with cryptocurrencies constantly talk about wanting to make digital assets as easy to access, trade and manage as traditional securities and funds. But if they want to play the same game, they should play by the same rules.

Read on for some of the other fintech headlines this week.

WEALTHRAMP PARTNERS WITH CAREFULL

The 250 independent, fee-only financial advisers on Wealthramp’s adviser-client matchmaking platform now have access to technology from Carefull that automatically monitors clients’ banking activity and financial behavior to protect against fraud, scams, misuse or mistakes. Carefull’s tech is especially designed to protect older Americans and families with special needs. Advisers on Wealthramp will also get access to Carefull’s Vault, a digital portal for securely storing passwords and documents.

In 2019, I wrote a bit about how advisers can turn cybersecurity into a business opportunity. This is more relevant than ever in 2022 — after the pandemic pushed everyone to embrace digital finance, fraud is now at an all-time high. Seniors are particularly vulnerable, losing more than $3 billion annually, according to an FBI report. Advisers who can offer additional protection can be invaluable to aging clients.

TIFIN ADDS CHATBOT TO INVESTMENT MARKETPLACE

Magnifi, the investment marketplace offering by fintech startup Tifin, has a new digital assistant it calls Mentor that can monitor portfolio activity, answer investment questions and provide market analysis. Pulling from Tifin’s data platform as well as an individual’s portfolio holdings, the chatbot can incorporate personal preferences and circumstances to provide customized answers.

Conversational search is the way of the future, and the rapidly growing Tifin understands that. We talk a great deal about “client experience” in fintech, but I can’t imagine anything much better than realizing the science fiction dream of just asking my device any question and the exact answer. Siri isn’t cutting it.

PRUDENTIAL HIRES NEW HEAD OF DIGITAL PRODUCTS

Speaking of client experience, Prudential Financial announced that it hired Utkarsh Patel as its global head of digital products and said he will be responsible for “transforming customer, client and advisor digital experiences.” Patel has experience doing digital projects across asset management, banking, health care and wealth management, and most recently served as chief marketing and digital officer at Wealth Enhancement Group.

There’s no easy way to say this, but even after more than a decade of digital innovation in financial services, most firms’ apps and websites … well, they suck. Most banks are doing well, some of the digital startups have shown what’s possible, and traditional firms are trying hard to catch up. It will be interesting to see what Patel is able to do for Prudential.

MORGAN STANLEY-BACKED FINTECH EXPANDS BOARD, ATTRACTS NEW INVESTMENT

CogniCor, which automates front and back-office processes for advisers, added fintech entrepreneur Toan Huyn to its board of director and received additional funding from Ramaswamy Nagappan, chief information officer at BNY Mellon Pershing. The company was selected in 2021 to be a part of Morgan Stanley’s Multicultural Innovation Lab.

Nagappan said he was impressed with CogniCor’s unique ability to use artificial intelligence to create efficiencies in advisory and custodian relationships, and said it can address “broken experiences” across the financial services industry. BNY Mellon recently launched a new business called Pershing X to tackle the ongoing problem of tech integration, and Nagappan could see CogniCor as part of the solution.

FUTURE PROOF FESTIVAL’S FINTECH CONTEST

Ten fintech startups will have the opportunity to demo their products live to thousands of financial professionals at Future Proof Festival, a September event created by Advisor Circle and Ritholtz Wealth Management. Applications are now open, and “any company that has built fintech tools and products is invited to apply.” The 10 companies will be selected by a judging committee of industry experts who will evaluate them for creativity, outside-the-box thinking and the ability to create a tangible impact for the Future Proof audience.

Future Proof wants to be more than just another adviser conference; it wants to be a festival, a sort of Coachella for financial advisers. The event says more than 1,500 financial advisers will be there, which isn’t surprising given the immense popularity of the Ritholtz crew. This could be a game changer for some new fintechs looking for exposure.

RISKALYZE IMPROVES CONNECTIVITY FOR LARGE FIRMS

Risk-central wealth fintech Riskalyze announced six new application programming interfaces for large RIAs, broker-dealers and asset management firms. Firms with the resources to invest in a proprietary technology infrastructure can use the APIs to build in Riskalyze’s features, such as the risk number, risk tolerance questionnaires or retirement maps.

As Riskalyze has grown into a large player in the adviser fintech market, it has increasingly gone after larger wealth management firms to sustain its growth. While these APIs will make it easier for firms with thousands of advisers to integrate Riskalyze into their core technology products, the small advisers that made up Riskalyze’s initial users may start to feel that they’re left on the outside looking in.

SMARSH HIRES A NEW CEO

Kim Crawford Goodman, the former president of Fiserv, has been named the new CEO of compliant communications technology firm Smarsh. Prior to Fiserv, Goodman held leadership positions at American Express and Dell.

The lack of diversity in the fintech industry has been conspicuous, so Goodman’s new role is notable, as she becomes one of the few African American women to head a fintech company.