Today we are joined by Taras Chaban from Sybenetix.
Sybenetix’s Enterprise Behavioral Analytics software enables financial institutions to deliver higher returns and comply with growing regulation. Proprietary behavioral algorithms analyze exactly how investment professionals make decisions using multiple sources of data to build unique behavioral profiles that are used to make more skillful decisions and detect misconduct.
Our questions are in bold.
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Who are you and what’s your background?
I’m Taras Chaban and studied computer science and artificial intelligence, and ending up as principal consultant at software company Mathworks Inc. I wanted to apply knowledge of advanced analytics to deliver innovation in capital markets so I joined Dresdner Kleinwort as a quantitative trader and then Credit Suisse. While working as a portfolio manager at GLG Partners I had the idea of applying analytics to data so we could see how and when we could improve our investment decision-making skill. That’s how Sybenetix started and we’ve grown to help more financial institutions improve conduct and performance at the same time.
What is your job title and what are your general responsibilities?
As CEO I work with a unique team of experts in technology, behavioral science and finance that brings diverse thinking and cross-industry experience to help solve some of the biggest challenges in financial services; how to systematically measure and manage behavior across the organization. As we enter our fast-growth stage my responsibilities are a mix of focus on product development and commercializing in major markets. We’re solving some very old problems in innovative ways, so I also spend time explaining the benefits of Enterprise Behavioral Analytics to mix of financial institutions, regulators and potential investors.
Can you give us an overview of your business?
Sybenetix’s Enterprise Behavioral Analytics software enables financial institutions to deliver higher returns and comply with growing regulation. Proprietary behavioral algorithms analyze exactly how investment professionals make decisions using multiple sources of data to build unique behavioral profiles. Software identifies cognitive biases affecting performance and delivers real-time insight to counter these biases and enable more skillful decision making throughout the investment process. The system uses this ‘behavioral fingerprint’ to also identify abnormal behavior in the context of suspicious activity. A highly accurate behavioral heat score provides smarter, faster detection and investigation of potential misconduct, saving time and money for compliance while improving their engagement with the front office.
Tell us how you are funded.
We are boot strapped, for now.
Why did you start the company? To solve what problems?
As a hedge fund portfolio manager, I could see the opportunity to use existing data to generate greater insight into how investment skill can be identified and improved. My colleagues in compliance saw how the same core analytics of decision making could provide insight to abnormal individual behaviour to provide a much smarter, faster detection and investigation of suspicious activity. Financial institutions face greater cost pressure to comply with new regulations and investor pressure to deliver investment performance with greater transparency. Sybenetix solves both these problems better than existing systems through a single that enables firms to generate more returns and be more compliant at the same time.
Who are your target customers? What’s your revenue model?
Our customers range from hedge funds and asset managers on the buy-side to broker/dealer businesses on the sell-side in global capital markets. We have a flexible license revenue model providing our software on the client side, hosted through a secure cloud or a hybrid model according to customer needs.
Some customers use our compliance software while others use our performance products. Once one product is in we find that the other product gets deployed as customers look to get value from both across the back and front office. To quote one customer, “We now have proactive self-reporting to compliance before the next day flag has even been raised. This is completely unheard of behavioural change.”
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
Accelerate collaboration between policy makers, regulator and financial institutions to transform financial services to low-risk high performance industry. It’s happened in other industries, and we’re starting to see the right framework being put in place through initiatives such as project innovate in the UK.
What is your message for the larger players in the Finance industry?
Most discussion in FinTech has been around the disruption to incumbent business segments and models such as peer-to-peer lending and robo-advice. But the potential for FinTech to transform the operating model of financial services has only just begun to be explored. Financial institutions have a huge opportunity to bring in a next-wave of of smart enterprise software ad technologies to transform the remaining 90% of financial services.
What phone are you carrying and why?
Sony because its dual card and open standards which means its operates globally with great performance and efficiency – like us.
Where do you get your industry news from?
I really like to mix a macro and micro view of the world so his means Economist, FT and WSJ combined with tech and financial services publications with journalist that understand the fast-moving dynamics of FinTech.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
@Chris_Skinner – Chris Skinner’s breadth and depth of financial services background combined with his network. Part of the self proclaimed ‘FinTech Mafia’.
@annairrera – Anna Irrera does a fantastic job at bringing the most salient FinTech news from London. Sign up to her weekly newsletter.
@elileentso – Eileen Burbidge provides an investor view and perspective as UK’s Treasury envoy for FinTech.
What’s the best FinTech product or service you’ve seen recently?
FundApps is great companies redefining how financial services meet the growing cost of compliance through shared expertise delivered through the cloud. Automates shareholder disclosure reporting in 85 countries.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Around 10% of financial services has been impacted by FinTech to date. Advanced analytics, block chain and the broader of adoption of cloud computing will lead the transformation of the other 90%. The cost od regulation and expectations around transparency are strategic and even systemic problems. So expect to see RegTech lead the charge in solving these problems.
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