ieDigital recently announced the acquisition of ABAKA, the Artificial Intelligence (AI) recommendation engine platform which predicts which financial services products are the most likely to be bought by the customers of banks, building societies and credit unions. Following the announcement, Fintech Zoom sat down with the CEO of ieDigital, Jerry Young, to find out more about what the incorporation of AI analytics into ieDigital’s range of digital solutions means for the fintech sector, both in the UK and across the world.
Jerry, many thanks for speaking with Fintech Zoom. Tell us more about ABAKA, and why ieDigital has acquired it.
ABAKA deploys AI-Next Best Action solution leveraging machine learning and behavioural persona-based segmentation software to enable financial services providers deliver hyper-personalised sales and marketing campaigns at scale.
It was founded by Fahd Rachidy and Benoit Launay to harness the huge ability presented by the arrival of big data, AI, & machine learning to revolutionize financial services marketing and the customer journey management process. The gathering, analysis, and application of large amounts of behavioural and demographic data are providing companies with a richer understanding of their existing and target customers.
ABAKA’s Next Best Action significantly accelerates how banks can access and mine data to deliver hyper-personalized digital experiences to their customers at scale.
ABAKA presented itself as an ideal acquisition for ieDigital. Our Interact suite of products is already well established as a digital experience platform enabling banks and other finance companies to provide superb digital banking solutions. The addition of AI-driven analytics will enable our clients to additionally benefit from essential ultra-personalised insights, something that will enable them to get inside the exact mindset of their customers.
ABAKA deploys AI-Next Best Action solution leveraging machine learning and behavioural persona-based segmentation software to enable financial services providers deliver hyper-personalised sales and marketing campaigns at scale.
Jerry Young, CEO, ieDigital
Why are ultra-personalised insights so important?
Exact, specific data that really drills down into customers’ behaviour patterns is an incredibly useful, valuable commodity for banks, building societies and all financial services providers operating in today’s technology-fuelled environment.
ABAKA’s AI technology analyses thousands of data points for millions of customers at the same time to accurately predict their needs and demands.
For example, ABAKA’s Next Best Now solution can pinpoint the exact moment a customer will be the most receptive to hear about purchasing a specific product, such as a mortgage, or open a savings account. The data can therefore benefit both the customer, who receives the product they want at the most appropriate time in their life, and the provider, who can supply another product – and will furthermore benefit from increased brand loyalty in the eyes of this customer.
Its full stack modular platform also enables financial services firms to provide contextualized engagement and personalised product offers while streamlining operations and processes.
What is the size of the AI market?
Spending on new technology across the banking and insurance market is expected to reach USD $1 trillion by 2025, with spending on AI-driven technology specifically set to reach $220 billion per year by 2028, largely driven by the US market.
The opportunities are therefore vast, which is why the acquisition of ABAKA proved to be so attractive for ieDigital. It made even more sense when you consider we have recently expanded into the US market too with our acquisition of Connect FSS, so these recent additions to our business have been made at a strong, strategic time.
ABAKA’s data is already proving to be a substantial asset to clients. One of our banking clients has reported a high level of conversion rates, with almost 30 per cent of its customers taking the next step into making substantial transactions based on the personalised recommendations that ABAKA provided to the bank.
It’s been a busy time for ieDigital lately – tell us about other recent developments, including the US growth that you mentioned.
ieDigital has been growing both organically and through making some significant acquisitions in recent months – we are currently pursuing an ambitious growth strategy to become a global leader in financial services digital software.
In addition to the recent acquisition of ABAKA, towards the end of 2023, ieDigital purchased Connect FSS, the US-based digital banking Software as a Service (SaaS) technology provider which specializes in providing digital banking solutions to credit unions in the US. This acquisition was the result of a strategic decision to increase our US footprint and to gain substantial traction in its powerful credit union sector.
Connect FSS was founded in 2007 and has carved out a reputation as the go-to provider of systems which elevate digital experiences by deeply integrating with credit unions’ core and other systems. CEO and President of Connect FSS, Grant Parry, remains committed to the business and has assumed the leadership role of Executive Vice President of Strategy where he will maintain his existing, close client relationships and steer the business on its continued growth track.
The acquisition will bring together the expertise of both companies, signifying a shared vision to deliver new and improved digital software solutions and exceptional customer service to financial services firms and credit unions.
There may well be further news to share soon. Watch this space!
ieDigital is a portfolio company of Parabellum Investments – tell us more about this relationship.
As a portfolio company of Parabellum Investments, the family office of founder and chief executive, Rami Cassis, ieDigital benefits from having access to some significant resources as it continues to look for further potential strategic acquisitions in the global fintech sector.
Indeed, the recent acquisitions of both Connect FSS and ABAKA form part of Parabellum Investments’ strategy of acquiring and integrating leading mid-market b2b businesses that operate within specialist and high-demand niches to provide their clients with global end-to-end solutions.
Parabellum Investments continues to seek acquisitions to grow its combined fintech and enterprise software platform. As the family office of Rami Cassis, it takes a hands-on approach to growing businesses through operational experience and sets itself apart from other acquirers as it deploys its own capital and can therefore make fast and informed decisions.
Let’s turn to the wider fintech industry. Do you think the demands of financial services customers are changing?
The rise of digital-only platforms, and the fact we are seeing many “traditional” players such as building societies invest substantially in their online offering, has revolutionised the financial services sector. Indeed, statistics reveal that more than nine out of ten British people used online banking services or mobile banking in 2023.
This has led to a complete step-change in what customers now expect. They expect a seamless experience across all channels, from mobile apps to in-person branches. We will therefore see even more financial institutions investing in creating integrated platforms and personalised services during 2024 and beyond that cater to individual preferences.
Another important area that customers are increasingly looking at is sustainable and responsible banking. Environmental consciousness is a rising trend, pushing demand for green finance products and services.
We are therefore seeing an increasing number of financial services providers adapting their offerings and demonstrating their commitment to sustainability.
How important is the power of emerging technology in financial services?
Emerging technology can make or break any fintech firm.
We are already seeing how embracing hyper-automation will be crucial for streamlining operations, enhancing efficiency, and extracting meaningful insights from vast data sets. This includes leveraging AI for tasks like fraud detection, credit scoring, and personalised financial advice.
After all, customers are becoming savvier than ever – they only expect to hear from their bank or financial services provider with offers that are relevant. If a bank relies on a scattergun approach, such as sending out offers for retirement savings to every single person, of all ages, on their database, this could potentially do more reputational harm than good, and lead them to look elsewhere.
Additionally, the rise of quantum computing poses a potential threat to existing encryption methods, demanding investment in advanced cyber security measures to protect sensitive financial data.
This is just a brief snapshot of some of the key aspects of the fintech sector right now – but based on the speed of change recently, it is important to remain on constant alert for the next big trends.
Jerry Young, CEO of ieDigital, many thanks for speaking to Fintech Zoom.
