news


IBS Journal October 2015


Blackrock swoops on Futureadvisor to gain robo-advisor tech


Asset management firm Blackrock is in the process of acquiring financial services start-up Futureadvisor, in a deal valuing the latter at $150-200 million. Blackrock is hoping to snap up the


next generation of investors. San Francisco-based Futureadvisor is one of the new breed of ‘robo- advisors’ – companies that combine information about their clients’ investment goals, income and taxes to create automated portfolios for investment. Traditionally charging lower fees than a broker or finan- cial advisor, they’ve been described as industry disruptors for the millennial age. Futureadvisor, founded by two former


Microsoft employees, raised $15.5 million last year with Sequoia and Canvas Venture Fund among its backers. It chose Blackrock, according to chief executive Bo Lu, to pro-


duce new features faster for its clients. Frank Porcelli, head of Blackrock’s


wealth advisory unit, describes how the


Bank of America and Visa launch new biometric banking innovations


Bank of America and Visa have announced new biometric innovations for their prod- ucts, continuing a trend of new ways for consumers to access their data, accounts and cash. A series of improvements to custom- er mobile and online banking systems has been promised by Bank of America, most notably the introduction of fingerprint and Touch ID sign-in and an Apple Watch mobile banking app. The new sign-in features are eligi-


ble for Android, iPhone and iPad custom- ers and will enable them to log into their accounts using a fingerprint. The technolo- gy was built from the ground up, says Bank of America, in line with FIDO (Fast Identity Online) regulatory standards. The release of the new sign-in method also coincides with a banking app launch for the Apple Watch, which will link with the existing mobile app. Visa, meanwhile, has introduced a new


24 © IBS Intelligence 2015


specification to enable biometric authen- tication with chip card transactions. The framework will allow palm, voice, iris or facial biometric compatibility with Europay, Mastercard and Visa cards. Biometrics are in high demand, espe-


cially as the technology’s reliability increas- es, says senior vice-present of risk and busi-


ness intelligence at Visa, Mark Nelson. Solu- tions need to be scalable and based off of open standards to be successful, he adds. South Africa-based Absa Bank, a sub-


sidiary of Barclays Africa Group, will be the first bank to use Visa’s specification to develop a proof of concept.


Alex Hamilton IN BRIEF


Royal Bank of Canada (RBC) has been granted a patent on its mobile payments technology by the United States Patent Office. The new technology, named Secure Cloud, will enable RBC clients to make secure


transactions through a mobile device at contactless payment terminals. Private data about the customer remains with the bank, as opposed to being stored on the phone, with substitute data being transferred and decoded locally at point of sale. ‘We knew we needed to create a solution flexible to future technologies,’ says Lin-


da Mantia, executive vice-president of digital and payments, RBC. When the project first started, she adds, it was a limited release on a small number of Android phones – now it will work on all models and all networks in Canada. —Alex Hamilton


Blackrock HQ, New York © Americasroof, Wikipedia


younger generation of investors ‘in an age of texts and chat’ might prefer a soft- ware-based solution over sitting down with an advisor. Robo-advisors have begun to impact


the traditional market in a significant way. The new kids on the block, they snatched $9.5 billion worth of business from estab- lished wealth managers in the first six months of 2015, according to IBM’s Likhit Wagle. By going after a customer base large- ly ignored by the big names in the banking industry, he adds, they’ve been able to carve their own unique niche into the market. Futureadvisor will continue to offer its


retail product under its current name and model, while Blackrock is understood to be keen to expand the technology outwards to its institutional clients.


Alex Hamilton


www.ibsintelligence.com


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