The rapid pace of technological development combined with a stream of regulations and requirements from the federal government has been stressful for financial institutions.

So says Peter Gwaltney, president and CEO of the N.C. Bankers Association.

“The regulatory environment has made it challenging (for banks) to introduce new technology, (including) third-party relationships with fintech companies because banks are held to a very high standard as to those relationships,” he said. “Third-party vendor management is a major issue in banking today from a regulatory perspective. The challenge is a bank’s capacity to manage those relationships and the speed at which they can deploy.”

To become a financial institution’s single source of operations software, nCino is incorporating some of that third-party technology into its cloud-based platform. In 2024, it acquired or partnered with three financial technology companies to help its clientele of banks, credit unions and stand-alone mortgage providers increase efficiencies and better understand risk while adhering to compliance and other regulations.

Artificial intelligence (AI) is at the heart of many of these enhancements.

Sean Desmond, nCino’s chief product officer, said it’s “super exciting” that AI is available. He recalled wishful discussions he and nCino CEO Pierre Naudé had when nCino was still a young offshoot of Live Oak Bancshares.

“Pierre and I had these conversations 10 years ago … if we could start bringing all this data into the platform and exposing it to our customers in a more meaningful way,” he said in mid-October. That conversation took place soon after nCino announced a partnership with Wilmington-based Lumos Technologies that incorporates Lumos’ predictive credit scoring model into the nCino platform.

Despite fears in some quarters that the use of AI threatens all kinds of human interaction as well as human workforce needs, nCino officials are bullish on its potential for financial institutions.

“We didn’t see it coming,” Desmond said of his early conversations with Naudé, “but we are (now) in the era of AI and have the opportunity to take advantage of it.”

Taking the example of Lumos’ PRIME + predictive credit model, Desmond said that use of AI gives Lumos the ability to take data from a variety of relevant government agencies and feed it into a model and interpret it. Without artificial intelligence, that work would be slow, painstaking and labor intensive.

Now, a lender uses the model to pull relevant data on a prospective borrower to, according to Desmond, “autogenerate that credit memo. But there is a human in the loop; we don’t say the bank is going to automatically make that decision.”

The Lumos partnership happened soon after nCino acquired FullCircl, a UK-based fintech that helps financial institutions streamline onboarding of new clients and improve client lifecycle management. Earlier in 2024, nCino acquired DocFox, a South African fintech that helps banking clients all over the world handle the complex onboarding of commercial clients. Now, those technologies are part of nCino’s offering.

Naudé, during nCino’s third-quarter earnings call in early December, described how the incorporation of FullCircl’s data capabilities boosts nCino’s capabilities.

“Today, onboarding, which is the process by which financial institutions verify the legitimacy of a prospective client or business for the prevention of things such as money laundering and fraud, is a highly manual and time-intensive process with a lot of complexity, particularly when onboarding larger and more sophisticated organizations,” he explained.
“FullCircl aggregates a premium data supply that our customers would otherwise be gathering from fragmented sources,” he continued. “Access to this data within the nCino platform will enable financial institutions to streamline those application processes and improve client life cycle management across other processes being performed on nCino, yielding a powerful combined integrated offering.”
At its APAC (Asia-Pacific) Summit this past November in Sydney, Australia, nCino officials showcased the latest financial industry technology.

Anthony Morris, the company’s global chief innovation officer, spoke about the increasing importance of AI in the banking and financial services industry. Artificial intelligence “serves as a tool to reshape how businesses operate,” nCino’s website quotes him as saying. AI also “tackles some of the biggest challenges companies face, like navigating vast amounts of data, managing compliance and risk, cutting costs, and improving the customer experience.”

The website summary emphasizes that innovation must be measurable and clearly tied to business goals. In banking, the “four pillars” that drive banking innovation are speed, value, transparency and productivity.

“For AI to truly work, businesses need strong systems in place that can grow and adapt with their needs. The next few years will be crucial for companies to take advantage of these chances to innovate,” the summary states.

Also featured at the summit was Ben Hamer, a futurist who hosts the podcast ThinkerTank.

In his view, artificial intelligence is designed to augment, not replace, human capabilities. These capabilities range from language translation to improving global communication. As the financial services sector, like many industries, becomes more global, AI has a role to play.

Hamer said AI can also increase efficiency in the workplace, with tools that can summarize or transcribe meetings, mediate discussions and produce insights from complex data. Companies can reduce the time their employees spend on repetitive tasks.

Hamer predicted a $10 trillion valuation of AI and Metaverse (virtual reality) technologies by 2030, with companies increasingly recognizing their value. Another key element in the rapid growth of these technologies, according to Hamer? Nearly half of Gen Z consumers are comfortable and “more authentic” in virtual environments.

In early December, nCino published a thought leadership paper on AI that urged financial institutions to assess their own progress on the AI journey. The company referred its clients to the Evident AI Index, a worldwide benchmark focused on the artificial intelligence maturity of banks.

The index is produced by Evident, a platform that tracks AI adoption across the financial services industry, and evaluates a financial institution’s status in using AI in the areas of talent, innovation, leadership and transparency.
Why does this matter to nCino?

“Although nCino is not a financial institution, we are partners with over 1,800 FIs, including community banks, credit unions, independent mortgage banks and the largest financial entities globally,” the paper states. “Because nCino offers a trusted platform of best-in-class, intelligent solutions for the financial industry, these four AI pillars are just as important to us as they are to our customers.”