Swiss startup accepted into sandbox of financial regulatory body in UK

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23.06.2017
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The Artificial Intelligence start-up nViso will test emotion recognition in the FCA sandbox. The Financial Conduct Authority (FCA) is the conduct regulator for financial services firms and financial markets in the UK. FCA has recently unveiled the list of firms that were accepted to begin testing in the second cohort in the sandbox.

The regulatory sandbox allows businesses to test innovative products, services, business models and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected. It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers.

The FCA received 77 submissions for the second phase of the regulatory sandbox, more than applied for cohort one. 31 applications met the sandbox eligibility criteria and were accepted to develop towards testing. The current cohort consists of the 24 firms that are ready to begin testing shortly. Tests will be conducted on a short-term and small-scale basis and the FCA has worked with the sandbox firms to agree testing parameters, building in consumer safeguards. In addition to the firms below, seven firms were not ready to begin testing and may be part of cohort three.

Among the 24 companies is nViso, based in Lausanne. nViso’s application was focused around testing its Artificial Intelligence behavioural and emotion-recognition technology to prove whether it can help enhance financial services customers’ profiles for use in banking and insurance. The Financial Services lead product of nViso is called “EmotionAdvisor”.

Until now, customer profiling and risk assessments have relied on static questionnaires and dogmatic questions around financial ability and appetite to withstand loss. Whereas we know from leading academic research that client behavioural reactions to loss and finance more generally are also correlate to other more intimate characteristics such as thinking style.

In a blogpost Tim Llewellynn, CEO of nViso explains: “Our technology can “read” and interpret such thinking styles by observing pre-emotional expression reactions in response to a series of stimuli, for example a short video. It's important to note we are not measuring fully processed emotions, but what happens in the 20-40 milliseconds before a person thinks through and expresses a reaction to another human.

My goals out of the pilot are to further explore the use cases across Financial consumers’ life cycle with any given provider. We believe AI-driven emotional recognition has a number of important applications including prospecting for suitable customers, login and authentication, client profiling, creating active recommendations for products/services, and even as a more complete feedback loop to a client advisor and firm.”

(SK)

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