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David Walker is well aware that large language models such as ChatGPT, which was trained on the entire internet, can hallucinate. They can even make up historical events that never happened.

“They can tell lies, they can make up information,” said Walker, who is chief technology officer of Westpac, in an interview. “They’re incredibly powerful.”

The bank, which is based in Sydney and has more than 12 million customers, can’t afford to let a public version of ChatGPT make up or hallucinate answers for customers or employees who use a virtual assistant. GPT (generative pre-trained transformer) models are artificial neural networks that are pre-trained on large data sets of unlabelled text, and able to generate humanlike content.

But Walker does want to give employees and customers the ChatGPT experience of humanlike answers to their questions — if it can be done safely, with assurance the answers are accurate. 

The bank is working with Kasisto to test its Kai-GPT, a large language model trained only on conversations and data in the banking industry. 

“Hallucination in public AI models is unavoidable and can get pretty bad,” said Zor Gorelov, CEO of Kasisto, in an interview. This is why banking GPTs need accuracy, transparency, trust and customizability, he said. 

This is also why banks like Westpac will focus on internal use cases for generative AI — giving it to front-line bankers, contact center agents and mortgage workers, Gorelov said. Westpac will train Kai-GPT on its proprietary content, and thereby dramatically reduce the risk that the system will hallucinate, Gorelov said. 

Walker hopes to provide more complete and more conversational help to customers and staff, for instance, in the mortgage lending process. 

“When people apply for a home loan, they have to fill in lots of forms,” Walker said. “We need to know who you are, we need to know all kinds of things about you. This is going to aid us in checking the quality of information coming in, so it’s going to stop us having to go backwards and forwards to our customers. It’s going to streamline the process. It’s going to help our customers, it’s going to help our lending staff, and it’s going to make things much more straight through and seamless.”

Other banks are likely to do similar experimentation over the next two years, according to Peter Wannemacher, principal analyst, digital banking at Forrester.

“Specialist tools built on top of a large language model will be launched by vendors, traditional financial institutions and fintechs,” Wannemacher said. “Most traditional financial institutions will start by focusing on employee-facing generative tools, rather than exposing a chatbot built on top of a large language model directly to the end user.” 

But he also thinks banks will proceed with caution. 

“Large language models have suddenly become both better and widely utilized, but they still fail spectacularly and can even generate totally wrong, even fraudulent outputs,” Wannemacher said. “Money is a highly sensitive area of people’s lives, and traditional banks will rightly resist launching anything customer-facing until they have a much better sense of what can go wrong and how to address it.” 

To prevent Kai-GPT from answering a question based on information from another bank that doesn’t pertain to Westpac, Walker is using what he calls layering. One layer of the model is trained on data and conversations from many banks. Another layer is trained on information specific to Westpac, such as its policy documents, forms and websites and recordings of conversations in the bank’s contact centers. 

“As it formulates an answer, to work out the intent of the question, it will draw on that industry layer,” Walker said. “It’s got the knowledge of all those conversations from all those banks and it’ll be smarter because of that. But it’ll draw even deeper down into the Westpac-specific model when you’re talking about terms of a home loan or a deposit interest rate. Those layers work together to formulate these really rich, wonderful answers, but in an accurate and concise way.” 

Using as much data as possible gives a richness and precision to answers, Walker said: “It’s still a matter of identifying what you want to train on and what knowledge you need the GPT engine to understand.” 

The bank is moving slowly for now to ensure the new technology fits within its responsible AI policy and “how we think ethically about protecting our staff and our customers,” Walker said. “We want to make sure that we don’t run ahead too fast and throw something out there that could do harm. We have the principle ‘do no harm.’ It’s sort of fundamental.”

The first go-live of Kai-GPT at Westpac will be in mortgage operations. Over the next few months, the bank will workshop the use of the technology in the loan application process to help borrowers know what forms they should use and what information the bank needs to receive, which should help speed up the process for the bank.

Once Walker’s team feels confident about Kai-GPT’s ability to help employees and customers and do no harm, he thinks he’ll be able to quickly deploy it to other areas of the bank.

The key advantage of a large language model over earlier generations of chatbots in use at Westpac is the richness of the answers it can provide, Walker said.

“It provides an answer in a way that’s more like a human talking to a human, so customers or employees feel like they’re getting the information they need rather than just sharp one-liners,” he said. “We think this is quite a game changer when it comes to this next generation of working with artificial intelligence.” 

Westpac already uses Kasisto’s Kai software as an orchestrator of other chatbots the bank uses in areas like service management, human resources and risk management. If an employee can’t remember which bot to go to for information, he or she can go to the orchestrator and get routed to the right chatbot.

“We thought that that was a very powerful way to handle conversation and we’ve found that really useful,” Walker said. “It’s a one-stop-shop entry point.”

Kai-GPT was trained on Kasisto’s own data, data from other banks Kasisto works with and information gleaned from financial websites, SEC filings and other sources. 

“Our goal is to create the best large language model in the world designed for banking and financial services and achieve what we call artificial financial intelligence,” Gorelov said. “We feel that our job is to help our customers of all sizes to have the highest performing large language model that is designed and built for banking that provides accurate responses and knows more about banking than most bankers do.”

Kai-GPT is transparent, Gorelov said, in terms of the data and methodology used for its training.

“It is trusted, because we’ve worked with banks over the past 10 years,” he said. “We know how precise they are, how demanding they are when it comes to personally identifiable information and proprietary content.”

The program is also customizable, so banks can inject their own content and make it work better on their own data sets.

The bigger the data set and the more questions a large language model is capable of answering, the more important and difficult to enforce guardrails become. 

“The world went from prescriptive AI, where every intent, every response needed to be designed manually to generative AI, where you no longer need to anticipate every user’s question and retrain the model when something new comes up,” Gorelov said. “It’s a different world we live in and we’re quite excited about it. But guardrails and the AI protection, transparency, visibility of sources, those issues become more and more important.”

Source: nationalmortgagenews.com

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Generally speaking, value stocks are shares of companies that have fallen out of favor and are valued less than their actual worth. Growth stocks are shares of companies that demonstrate a strong potential to increase revenue or earnings thereby ramping up their stock price. The terms value and growth refer to both two categories of stocks and two investment “styles” or approaches of investing in stock.

Each style has pros and cons. When value investing, investors can buy shares or fractional shares of a company that has strong fundamentals at bargain prices. However, investors must be careful not to fall in a “value trap”—buying stocks that appear cheap, but are actually trading at a discount due to poor fundamentals.

What Are Value Stocks?

When investors hunt for value stocks, they are looking for stocks that are relatively cheap, unfashionable, or that they believe aren’t receiving a fair market valuation. Value investors try to identify value stocks by examining quarterly and annual financial statements and comparing what they see to the price the stock is getting on the market.

Investors will also look at a number of valuation metrics to determine whether the stock is cheap relative to its own trading history, its industry, and other benchmarks, such as the S&P 500 index.

For example, investors often look at price-to-earnings (P/E) ratio, which is the ratio of price per share over earnings per share. Some experts say that a value stock’s P/E should be 40% less than the stock’s highest P/E in the previous five years.

Investors may also look at price-to-book, which is the price per share over book value per share. A stock’s book value is a company’s total assets minus its liability and provides an estimate of a company’s value if it were liquidated.

Value investors are hoping to buy a quality stock when its price is in a temporary lull, holding it until the market corrects and the stock price goes up to a point that better reflects the underlying value of the company.

What Could Make a Stock Undervalued?

There are a number of reasons that a stock could be undervalued.

•   A stock could be cyclical, meaning it’s tied to the movements of the market. While the company itself might be strong, market fluctuations may temporarily cause its price to dip.

Recommended: Cyclical vs Non Cyclical Stocks

•   An entire sector of the market could be out of favor, causing the price of a specific stock to dip. For example, a pharmaceutical company with an effective new drug might be priced low if the health care sector is generally on the outs with investors.

•   Bad press could cause share prices to drop.

•   Companies can simply be overlooked by investors looking in a different direction.

What Are Growth Stocks?

Growth stocks are shares of companies that demonstrate the potential for high earnings or sales, often rising faster than the rest of the market. These companies tend to reinvest their earnings back into their business to continue their company’s growth spurt, as opposed to paying out dividends to shareholders. Growth investors are betting that a company that’s growing fast now, will continue to grow quickly in the future.

To spot growth stocks, investors look for companies that are not only expanding rapidly but may be leaders in their industry. For example, a company may have developed a new technology that gives it a competitive edge over similar companies.

There are also a number of metrics growth investors may examine to help them identify growth stocks. First, investors may look at price-to-sales (P/S), or price per share over sales per share. Not all growth companies are profitable, and P/S allows investors to see how quickly a company is expanding without factoring in its costs.

Investors may also look at price-to-earnings growth (PEG), which is P/E over projected earnings growth. A PEG of 1 or more typically suggests that investors are overvaluing a stock, while PEG of less than one may mean the stock is relatively cheap. PEG is a useful metric for investors who want to consider both value and growth investing.

Investors jumping into growth stocks may be buying a stock that is already valued relatively high. In doing so, they run the risk of losing a potentially significant amount of money if an unforeseen event causes prices to tumble in the future.

How Are Growth and Value Strategies Similar?

While growth and value investing are two different investment strategies, distinctions between the two are not hard and fast — there can be quite a bit of overlap. Investors may see that stocks listed in a growth fund are also listed in a value fund depending on the criteria used to choose the stock.

What’s more, growth stocks may evolve into value stocks, and value stocks can become growth stocks. For example, say a small technology company develops a new product that attracts a lot of investor attention and it starts to use that capital to grow its business more quickly, shifting from value to growth.

Investors practicing growth and value strategies also have the same end goal in mind: They want to buy stocks when they are relatively cheap and sell them again when prices have gone up. Value investors are simply looking to do this with companies that are already on solid financial footing, and hopefully, see stock price appreciation should rise as a result. And growth investors are looking for companies with a lot of potential whose stock price will hopefully jump in the future.

Using Growth and Value Strategies Together

The stock market goes through natural cycles during which either growth or value stocks will be up. Investors who want to capture the potential benefits of each may choose to employ both strategies over the long term. Doing so may add diversity to an investor’s portfolio and head off the temptation to chase trends if one style pulls ahead of the other.

Investors who don’t want to analyze individual stocks for growth or value potential can access these strategies through growth or value funds. Because of the cyclical nature of growth and value investing, investors may want to keep a close eye on their portfolios to ensure they stay balanced — and consider rebalancing their portfolio if market cycles shift their asset allocation.

The Takeaway

Growth and value are different strategies for investing in stocks. Investing in growth stocks is considered a bit riskier, though it also may provide potentially higher returns than value investing. That said, growth stocks have not always outperformed value stocks.

As a result, some investors may choose to build a diversified portfolio that includes each style so they have a better chance of reaping benefits when one is outperforming the other.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
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Source: sofi.com

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Swiping your magnetic-stripe credit card will soon become a thing of the past.

In the wake of widespread consumer data breaches like those at Target and Home Depot – plus increasing rates of counterfeit fraud – credit card companies nationwide are issuing new smart chip-enabled cards to improve payment security and provide consumers with greater protection against fraud.

Have you received your new chip-equipped credit cards in the mail yet? If not, you will soon: October 2015 is the “liability shift” deadline between banks and merchants. If a business doesn’t offer chip-enabled transactions after October, the liability for any resulting credit card fraud will fall to the business-owner and no longer the bank.

Here’s the scoop on what you need to know about chip-enabled cards, or as they are more formally known, EMV cards:

What’s EMV?

EMV cards – named after its original developers Europay, MasterCard, and Visa – are nearly identical to the typical American credit card, but they are encrypted with a small computer chip rather than a magnetic stripe. You will notice a small gold or silver metallic square on the front of your card. While this square contains the same information as magnetic stripe cards, such as name, card number, and expiration date, each transaction generates unique, dynamic data. This is the game changing technology that makes it difficult for anyone but the rightful owner to use the card, and it protects against the creation of counterfeit cards.

EMV cards have been the standard around the world for decades, but America is finally catching up: half of the world’s credit card fraud occurs in the US!

How Do EMV Cards Work?

Instead of swiping your card, you’ll insert your card into a terminal slot. This action is called “dipping”! The data then flows between the card chip and the issuing financial institution to verify the card’s legitimacy. Because these cards are read in this new, different way, you should know that the transaction is not as quick as a basic swipe; expect a slightly longer time at the point of sale. Though most of the world operates on a “chip and pin” system, Americans will still sign credit card receipts for the time being.

Keep in mind, your card will still have an magnetic stripe, too. Not all businesses will support “dipping” by October. In fact, a recent Intuit survey found that 42% of small businesses haven’t heard about the deadline yet!

Can I Still be a Victim of Fraud?

Though this new technology should give you greater peace of mind, smart-chips do not entirely eliminate credit card fraud. You will still need to monitor your credit card accounts and credit score diligently – at least once a month. That’s the best way to detect fraud in the early stages and keep your identify safe.

– Vera Gibbons, Mint Contributor and Personal Finance expert

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Source: mint.intuit.com

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The story of the banking industry is, in many ways, the story of America. Immigrant successes, Westward expansion, rebuilding after massive losses, inventing new technology… American banks have been part of all these efforts and more.

This is especially true of the largest banks in America. With international presence and massive amounts of wealth, these banks play an important role in the history and future of world finance.

What’s Ahead:

1. JP Morgan Chase

  • Assets: $3,380,824M
  • Number of U.S. branches: 4,828
  • HQ: Columbus, OH

JP Morgan Chase’s ancestor institution, The Bank of The Manhattan Company, began as a water supplier. In 1799, New York Assemblyman Aaron Burr led an initiative to bring Manhattan residents fresh water. The entrepreneurial Burr used his state charter to start both a waterworks and a bank, which would outlive the water company and merge with Chase Bank in 1955.

Two other large institutions gave the bank its name. Famous financier J. Pierpont Morgan joined an 1871 merchant banking partnership to support American industrial growth. Publisher John Thompson established Chase National Bank in 1877, naming it after friend and Supreme Court Justice Salmon P. Chase. By 1930 Chase National Bank was the world’s largest.

Morgan spurred his firm’s growth by financing the railroad industry in the late 19th century. Struggling railroads like the Erie and the Northern Pacific got “Morganized” with cost-cutting measures and restructuring. Other companies that would later be a part of JP Morgan Chase founded American engineering projects standing today, like the Brooklyn Bridge and the Statue of Liberty. In 1904 J.P. Morgan & Co. financed the Panama Canal with a record-breaking real estate transaction of $40 million.

Later, JP Morgan Chase-affiliated institutions spearheaded 20th-century banking technologies including cash dispensers — the ancestors of ATMs — and home banking services.

2. Bank of America

  • Assets: $2,440,022M
  • Number of U.S. branches: 3,895
  • HQ: Charlotte, NC

Bank of America began in San Francisco as Bank of Italy. It traces its roots to 1904, when founder Amadeo Giannini, an Italian-American, had a vision for a new type of bank.

At the time major banks only catered to the wealthy. The Bank of Italy provided loans to middle and working-class Americans, immigrants, and farmers. Giannini convinced his neighbors, many of whom were fellow immigrants, to keep their money safely in a vault and earn interest. He began operations in a former saloon.

Giannini’s bank grew quickly and changed its name in 1930 to a name he felt better described his mission: Bank of America.

Bank of America continued to make inroads beyond its West Coast headquarters. By Giannini’s death in 1949 the bank was the world’s largest with $6 billion in assets.

In 1958, Bank of America issued the first bank credit card. By 1991, Bank of America had purchased a major California competitor and become the first bank to operate from coast to coast in the United States.

The 2009 acquisition of Merrill Lynch helped turn Bank of America into the largest wealth-management corporation in the world.

3. Citigroup

  • Assets: $1,720,308M
  • Number of U.S. branches: 666
  • HQ: Sioux Falls, SD

When the First Bank of the United States lost its charter in 1811, several of its investors decided to charter their own banks. One of these new banks was the City Bank of New York, founded in June 1812.

It was led by Samuel Osgood, a former member of George Washington’s cabinet and a Revolutionary War veteran. The bank was one of the first institutions to set up an office on Wall Street before the street became a financial hub.

City Bank saw opportunities in the early transportation industry. In the 1850s, bank president Moses Taylor invested in railroads and steamships.

City Bank was also the first American bank to open a department abroad. By 1915 it was the nation’s primary international bank. Texas entrepreneur James Stillman became bank president in 1891 and started trading with countries like Spain, Japan, and Brazil.

After a series of mergers, the former City Bank branched out into a holding company (Citigroup) and a banking business (Citibank) in the 1970s, forming Citigroup Inc. in 1998.

4. Wells Fargo

  • Assets: $1,712,535M
  • Number of U.S. branches: 4,739
  • HQ: Sioux Falls, SD

The California gold rush inspired investing partners Henry Wells and William Fargo to open a new venture in San Francisco in 1852. Wells, Fargo & Co. operated a bank and express delivery service for gold. As gold miners spread to cities and camps throughout California, Wells Fargo & Co. followed.

The company made its name in transportation. Prospectors needed to get their gold from coast to coast. There was a huge market for other transit needs, too, like communicating messages.

Wells Fargo used steamships, ponies, railroads, telegraphs, and stagecoaches to make deliveries across the developing West. They operated the western leg of the Pony Express in 1861 and expanded with the transcontinental railroad in the 1870s.

By 1888, Wells Fargo, using the mottoes “Ocean-to-Ocean” and “Over the Seas,” ran the U.S.’s first national express company and looked towards global expansion. They also boasted the world’s largest collection of stagecoaches and served areas where railroads didn’t run.

5. U.S. Bank

  • Assets: $582,253M
  • Number of U.S. branches: 2,251
  • HQ: Cincinnati, OH

Like most banks on the list, U.S. Bank is the product of multiple mergers. The combined power of several original “legacy” banks across the country, from Oregon to Ohio to Colorado, helped make U.S. Bank the success it is today.

U.S. Bank’s oldest legacy bank, Firstar of Milwaukee, was founded in 1853 as Farmers and Millers Bank. And the administration of President Abraham Lincoln approved the charter for the First National Bank of Cincinnati (later Star Banc) in 1863, in the midst of the Civil War.

San Miguel Valley Bank in Colorado, later part of U.S. Bank, earned its own claim to fame when it was robbed by Butch Cassidy in 1889 — the first bank the outlaw ever robbed.

As American prospectors and businesspeople went West to seek profits, U.S. Bank expanded westward as well. The United States National Bank of Portland opened in 1891 in Oregon. It later formed a holding company called U.S. Bancorp. U.S. Bank locked in its name before a 1913 law prohibited other banks from using “United States” in their names.

Over a century later, in the early 2000s, Firstar of Milwaukee — now much larger and wealthier than the Farmers and Millers Bank of 1853 — combined with U.S. Bancorp. More regional mergers and acquisitions in the 1990s and 2000s added Star Bank, along with regional banks in Missouri and Minnesota, to the U.S. Bank fleet.

6. PNC Bank

  • Assets: $534,347M
  • Number of U.S. branches: 2,639
  • HQ: Wilmington, DE

PNC stands for Pittsburgh National Corporation. In some ways, PNC hasn’t strayed far from its Pennsylvania roots. The company still does business in the same Pittsburgh location where the First National Bank of Pittsburgh opened in the mid-19th century Civil War era.

The bank continued to serve the community during the Great Depression in the 1930s, partnering with Peoples-Pittsburgh Trust Company to finance local improvement projects. They established a simple process for home and auto loan approvals and opened branches in small Pennsylvania manufacturing towns.

In 1983, PNC merged with the bank Provident National Corporation, taking advantage of new laws that permitted statewide banking. At the time, this was the largest merger in U.S. banking history. Conveniently, the two companies had the same initials.

As technology took on a larger role in banking, PNC established a common platform for each of its member banks in 1990. This way, customers had consistent access to the same services. A 1999 acquisition of an investor services group helped PNC branch into the worldwide investment industry.

7. Truist Bank

  • Assets: $532,080M
  • Number of U.S. branches: 2,117
  • HQ: Charlotte, NC

A company with proud Southern roots, Truist began in Atlanta, Georgia, as the Commercial Travelers’ Savings Bank in 1891, with a grocer as its first president. The bank moved into an eight-story building a few years later (the first “skyscraper” in the South) and became Trust Company of Georgia (TCG), focused on investment banking.

TCG also played a role in financing one of the country’s favorite drinks. In 1919, TCG purchased the Coca-Cola company and received $110,000 of shares in Coca-Cola stock.

After becoming a full-service commercial bank in 1933, TCG expanded through Georgia and the southeast. They merged with Florida-based Sun Banks, Inc., in 1985, the largest bank merger in the American southeast at the time. The new company, SunTrust, became one of the first banks to use electronic check transactions in 2004.

A much larger merger followed in 2019, as SunTrust combined with fellow Southern bank BB&T. To start fresh as a new institution, the now-larger bank hired a branding company to come up with an original name. As American Banker reports, many customers thought the name Truist was strange — but this doesn’t seem to have impacted the company’s profits.

8. Goldman Sachs

  • Assets: $501,906M
  • Number of U.S. branches: 3
  • HQ: New York, NY

Marcus Goldman, a German American shopkeeper living in New York City, found a niche in the banking market in 1869. His “commercial paper” trading business helped merchants and small businesses get short-term funds without paying for pricey bank credits. In 1882 his son-in-law Samuel Sachs joined the firm.

The newly named Goldman, Sachs & Co. was trading on the New York Stock Exchange by 1896. Business started booming. They scored big-name clients like Sears, Roebuck & Co., bought overseas banks, and started trading in international currency.

Goldman Sachs is known for pioneering the initial public offering or IPO, a process where a company offers shares of its stock for investors to buy. The IPO has since been essential to the growth of hundreds of companies and is one of the main ways companies raise capital.

9. TD Bank

  • Assets: $405,223M
  • Number of U.S. branches: 1,159
  • HQ: Wilmington, DE

TD Bank has Canadian roots. As the grain industry became more profitable in Canada, a group of merchants and grain millers founded the Bank of Toronto in 1855. A decade later in 1869, The Dominion Bank opened to serve Canadians, and both banks expanded across the country in the early 20th century.

After World War II, the two banks decided to merge in response to the challenges of the postwar economy. Their new combined name, Toronto Dominion (TD), has lasted since 1954.

Post-merger, TD Bank added substantially to its products and services, branching into mutual funds, discount and full-service brokerage, and commercial real estate. In 1987, the bank opened Toronto Dominion Securities Inc. for corporate investors.

Their expansion into the United States began in 2007-8 when TD Bank acquired the U.S.-based Commerce Bancorp. Commerce was known for its convenient hours, open seven days a week and almost 365 days a year. In its new incarnation, TD Bank adopted the tagline “America’s most convenient bank” throughout the U.S. and Canada.

10. Capital One

  • Assets: $388,440M
  • Number of U.S. branches: 296
  • HQ: McLean, VA

Compared to the other big banks in the United States, Capital One hasn’t been around for long at all. It wasn’t founded until 1988.

How did Capital One experience such rapid growth in only a few decades? Part of the answer is its niche expertise as a credit card company. Though Capital One has offered loans and consumer banking since 2005, its greatest profits in its early years came from customers’ desire for credit cards — which were more novel and exciting in the 1990s than they are today.

Capital One was pretty clever at growing its credit card business. The company used data to target customers with personalized offers, and grew its customer base by offering secured cards and joint accounts to customers with less-than-perfect credit. Additionally, Capital One offered the standout feature of letting cardholders design their own cards.

Catching up for its late start, Capital One acquired several other banks and increased its presence in the United States and Canada. By 2016, Capital One was the third-largest credit card issuer in the United States.

Nowadays, in addition to its booming credit card trade, Capital One has consumer banking and commercial banking divisions — including its Capital One 360 services that adapt checking, savings, and money market accounts for the digital age.

11. Bank of New York Mellon (BNY Mellon)

  • Assets: $365,102M
  • Number of U.S. branches: 29
  • HQ: New York, NY

The original Bank of New York (BNY) dates all the way back to 1784, when it was founded by Alexander Hamilton. BNY loans helped finance U.S. infrastructure projects like the Erie Canal and the subway in New York City.

Its future partner, Mellon Financial, got started in 1869 as a wealth management firm. Though the two companies are combined today, they still maintain a separate wealth management business.

In 2006-7, the Bank of New York acquired Mellon Financial and took on the new name BNY Mellon. The new company focuses primarily on corporate banking, including securities and asset management.

This focus is one reason for its huge profits; many of America’s large foundations, pension funds, and other Fortune 500 power players do business with BNY Mellon. By the end of 2020, the bank was servicing more money in assets than any other company in the world.

12. State Street Bank & Trust Co.

  • Assets: $296,434M
  • Number of U.S. branches: 2
  • HQ: Boston, MA

State Street’s predecessor banks date back to the 18th and 19th centuries. In 1792, Union Bank (later National Union Bank) was approved by Massachusetts Governor John Hancock and started business in Boston. They opened a headquarters on Boston’s State Street.

A century later in 1891, their competitor, the State Street Deposit & Trust Co., opened nearby. The two Boston banks merged in 1925 and kept the name of the street they had in common.

One major factor in State Street’s expansion was its embrace of technology and software. In 1973, when computers were still being developed, State Street acquired part of Boston Financial Data Services and began using data processing to improve their accounting and customer service.

When a 1974 law increased companies’ responsibilities to report pension plans to the government, State Street worked on software that helped companies maintain these records. That same year, the bank opened its own data processing headquarters in a Boston suburb.

Summary

The 12 biggest banks in America all have different stories, but also many things in common: savvy entrepreneurs behind them, massive growth fuelled by mergers and banking innovations, and a whole lot of assets in their vaults.

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Source: moneyunder30.com

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How will artificial intelligence — Chat GPT and image-generating programs such as DALL-E — change the way the home furnishings industry does business? A handful of home décor executives, some of whom are experimenting with the technology and others who are still in watch-and-see mode, shared their thinking with Home Accents Today:

Jamie Merida

Jamie Merida

Bountiful Home

As far as it being an AI tool for writing and language, I don’t see it being an asset to us, but I am intrigued by AI photo generators as a brainstorming tool. Typing in a few prompts, like “pinecone toile” or “modern red living room” creates dozens of interesting results that could help sync a client’s vision with my design.

Maura Dineen

Maura Dineen

Creative director, Moe’s Home Collection

Moe’s is an innovative and forward-thinking company, always searching for new ways to approach our work. We’ve been utilizing AI across multiple teams, and Chat GPT has become another tool in our tool kit. Like any tool, it’s excellent for some things but not everything. Without giving anything away, we strive to provide a seamless experience using the most cutting-edge technologies, and Chat GPT is no exception. We’re excited to see how AI evolves in supporting our business.

Brian Berk

Brian Berk

President, Howard Elliott Collection

I am not super familiar with the capabilities or limitations of Chat GPT. I think that it might be helpful for writing product content.

Brownlee Currey

Brownlee Currey

President Currey & Company

It already has! Chat GPT can’t duplicate a specific written voice, but it is a whiz for keywording, formatting and laying out written documents. Personally, I’ve been using it since early this year to ease the writing process and get words on paper quickly.  In the not-so-distant future, we will all be integrating software such as Chat GPT into our workflows, for a variety of purposes.

Alyssa Abrams

Marketing director, U.S., Eichholtz

At this time, no. We have an incredible team of customer service reps that are knowledgeable and friendly, but furthermore, are an extension of our brand experience. There is no replacement for human interaction when it comes to building relationships with customers!

Emma Lowry

Emma Lowry

Vice president of product development, Elk Home

Yes. Absolutely, there are a myriad of ways ChatGPT is going to change our business. I have been using it for marketplace analysis, meeting agendas and product descriptions. We are looking into how it could be used for digital marketing strategies, data analysis and the list goes on. We have also been playing around with DALL-E which generates AI images for new design concepts.

Pam Cain

Pam Cain

President, Chelsea House

Chat GPT is one of the most mind-blowing technology releases I’ve seen, which is backed by both the number of users it’s generated quickly and the number of use cases it supports. Running a brand in the design industry requires a delicate balance of business savvy and design-eye, and there’s no doubt Chat GPT can make companies in any field more efficient and process-oriented. For every task it can easily handle, we free up more time to discover trends, design thoughtful and beautiful furnishings, and connect with our audience in meaningful ways. We’ve already begun using it!

Giovanni Marra

Giovanni Marra

Director of marketing and digital strategy, Nourison

We’ve experimented with Chat GPT. It might help with research and some simpler tasks, but it can’t really write for you in your brand’s voice. It is interesting to test but we’ll keep focusing on our talented writers for our main content creation.

Shari Kline

Shari Kline

Owner and creative director, TL at Home

If I’m being perfectly honest, I think I’d probably enjoy using it to help jumpstart the process of writing product descriptions. But I think overall it’s probably more insidious than helpful in the long run.

Monty Rathi

Monty Rathi

Chief operating officer, Kaleen

It’s an innovative idea and it definitely would help out our business as we continue growing. We haven’t experimented with it yet but we will soon, and we hope to find ways we could use it in the future.

Austin Craley

Austin Craley

Vice president of sales, Loloi

I don’t know if it will be an asset, but it will change a lot in our industry, and quickly.  Many jobs will become simpler and easier to do.  The long-term implications are still to be determined.

Emily May

Emily May

Director of advertising and public relations, Feizy 

Yes, when you have a very small team, even having a rough draft of content created can be incredibly helpful. Some projects, like collection copy or brochure language for a specific program still require a lot of human oversight, but templated communications are a great way to embrace this new technology. I could really see this being helpful to distribute companywide communications, re-weather-related closures, changes in personnel and company policies.

Greg Jordt

Greg Jordt

Executive vice president Sales and marketing, Harounian Rugs International

The fact that I had to Google ‘ChatGPT’ probably tells you and me, that we will not be offering it any time soon. ChatGPT is a natural language processing tool driven by AI technology that allows you to have human-like conversations and much more with the chatbot. The language model can answer questions and assist you with tasks. At this time and in the foreseeable future, I don’t see how this technology will enhance the capabilities and the service of our current customer service department.

Ned Baker

Ned Baker

Key account manager, Tamarian Rugs

I suppose it could be a tool for dealing with some of the “hard facts” of the rug industry; history, production info, sales/trend gathering, etc. But it seems to me there would be a limit in the creative aspects of the work and would remove the human interaction that is the “secret sauce” to the high-end rug market. I also feel something is lost in the “authenticity”, again, because the human element is removed. There is little left of a “journey” to achieve something, therefore less is learned, less is gained.

Source: homeaccentstoday.com

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Executives from two major AI companies asked senators on Tuesday to pass regulations for the ground-breaking but nascent technology as rapid innovation raises ethical, legal and national security questions. 

Speaking to a Senate Judiciary subcommittee, OpenAI CEO Sam Altman praised the potential of the new technology, which he said could solve humanity’s biggest problems. But he also warned that artificial intelligence is powerful enough to change society in unpredictable ways, and “regulatory intervention by governments will be critical to mitigate the risks.”

“My worst fear is that we, the technology industry, cause significant harm to the world,” Altman said. “If this technology goes wrong, it can go quite wrong.”

Read more:  How advisers can embrace AI tools without sacrificing human connection

IBM’s chief privacy and trust officer Christina Montgomery focused on a risk-based approach and called for “precision regulation” on how AI tools are used, rather than how they’re developed. 

It’s unclear whether Congress is up to the task. Political gridlock and heavy lobbying from big technology firms have complicated efforts in Washington to set basic guardrails for challenges including data security and child protections for social media. And as senators pointed out in their questions, the deliberative process of Congress often lags far behind the pace of new tech advancements. 

Demonstrating AI’s power to deceive, Senator Richard Blumenthal, the Connecticut Democrat who chairs the panel, played an AI-written and produced recording that sounded exactly like him during his opening statement. While he urged AI innovators to work with regulators on new restrictions, he recognized that Congress hasn’t passed adequate protections for existing technology. 

“Congress has a choice now. We had the same choice when we faced social media,” Blumenthal said. “Congress failed to meet the moment on social media. Now we have the obligation to do it on AI before the threats and the risks become real.”

Read more:  Is your manager trying to replace you with AI?

As Tuesday’s hearing got underway, senators questioned the potential for dangerous disinformation and the biases inherent in models trained on internet content. They raised the risks that AI-fabricated content poses for the democratic process, while also fretting that global adversaries like China could surpass US capabilities. 

Blumenthal asked about “hallucinations” when AI technology gets information wrong. Tennessee Republican Marsha Blackburn asked about protections for singers and songwriters in her home state, drawing a pledge from Altman to work with artists on rights and compensation. 

Missouri Senator Josh Hawley, the ranking Republican on the subcommittee, asked whether AI will serve to be as transformative as the printing press, disseminating knowledge more widely, or as destructive as the atomic bomb. 

“To a certain extent, it’s up to us here and to us as the American people to write the answer,” Hawley said. “What kind of technology will this be? How will we use it to better our lives?”

Much of the initial discussion focused on generative AI, which can produce images, audio and text that seems human-crafted. OpenAI has driven many of these developments by introducing products like ChatGPT, which can converse or produce human-like, but not always accurate, blocks of text, as well as DALL-E, which can produce fantastical or eerily realistic images from simple text prompts. 

But there are boundless other ways that machine learning is being deployed across the modern economy. Recommendation algorithms on social media rely on AI, as do programs that analyze large data sets or weather patterns. 

Read more:  No more ChatGPT? Here’s what the ‘pause’ on generative AI means for the workplace

Required Registration

The Biden administration has put forth several non-binding guidelines for artificial intelligence. The National Institute of Standards and Technology in January released a voluntary risk management framework to manage the most high-stakes applications of AI. The White House earlier this year published an “AI Bill of Rights” to help consumers navigate the new technology. 

Federal Trade Commission Chair Lina Khan pledged to use existing law to guard against abuses enabled by AI technology. The Department of Homeland Security last month created a task force to study how AI can be used to secure supply chains and combat drug trafficking. 

In Tuesday’s hearing, Altman focused his initial policy recommendations on required registration for AI models of a certain sophistication. He said companies should be required to get a license to operate and conduct a series of tests before releasing new AI models. 

Montgomery said policymakers should require AI products to be transparent about when users are interacting with a machine. She also touted IBM’s AI ethics board, which provides internal guardrails that Congress has yet to set.

“It’s often said that innovation moves too fast for government to keep up,” Montgomery said. “But while AI may be having its moment, the moment for government to play its proper role has not passed us by.”

Source: nationalmortgagenews.com

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Home renovation is one of those things that are necessary from time to time, regardless if there is a genuine need to fix a problem or just to make your home look and feel better.

But renovations can be expensive depending on the type of work you are planning to carry out, which is why a lot of people decide to put it off for as long as they can.

Renovating on a budget can be easily doable if you devise the right plan. If you are thinking about how you can accomplish that, here are the best money saving tips that you can use to help you renovate your home on a budget.

Set a Budget

The first thing you need to do is obviously set a budget for yourself. However, that budget needs to be realistic and reflect the nature of work you are planning to carry out. After all, you can’t plan to refloor the entire house on a $500 budget.

To set a budget, first, see how much you can invest. Then evaluate the most important things that need to be done in order of priority and cost.

The money you can spend might not match what you are trying to achieve which is why planning is a must. See what you can do yourself and what would require a contractor. Contact some of the local contractors and ask for a quote so you can match expectations with reality – they can easily provide you with a quote by using an estimate app.

Reuse What You Have

Clearly, getting everything brand new when renovating is the ultimate dream. However, if you are on a tight budget it might be difficult to achieve that.

Look around your home and see what you can reuse. Some of the items might be in a good condition yet the external appearance might be worn out.

Look around to find ideas of how you can refresh old flooring and furniture, even bedroom and bathroom tiles and save money by fixing what you have instead of replacing the items.

renovating your home on a budget
Photo by Charles 🇵🇭 on Unsplash

DIY Is Your Friend

When it comes to renovation, the optimal thing to do is just go on holiday and let someone carry the work out for you. We all know that due to finances that’s not possible for the majority of us. So factoring in some DIY is what can save you a lot of money when renovating your home.

Doing the paint job or buffing the old flooring and repainting it is something that you can definitely do yourself. It doesn’t take a lot of skill, you just need the right tools for the job.

Still, buying the tools and equipment will ultimately cost you less if you have some time on your hands, plus you will get to keep the equipment for future projects.

home renovation on a budget diy
Photo by Milan Popovic on Unsplash

Wait for Sales

Time plays a crucial role when it comes to renovation but in order to save money, you need to find the right time. Different things you will need for your renovation project go on sale at different times of the year.

That’s why gradually buying the things you need is a good idea, plus it won’t feel like a big burden on your budget as opposed to buying everything at once.

For example, Black Friday is a good time of the year to buy new technology items, the end of the summer is good for gardening tools and American holidays are the best time to buy appliances. Don’t rush but rather take time to buy things at the best price – store them somewhere in the meantime and once you have everything, the remodeling can begin!

Home renovation can be a pleasurable experience, especially if you invest your time in it to add your own personal touch. At the end of the project, you will be happy to look at the outcome and see what you have managed to achieve.

Marie Erhart is a Success Manager at FieldPulse, creators of field service software that lets you run your entire contracting business from a single app. She works with contractors to help them grow their business using best practices.

More helpful tips

The Kid-Friendly Home: Creating A Safe Haven For Your Little Explorers
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Top 10 Ways to Increase the Value of Your Home
7 Great Ways to Bring More Light into Your Bedroom: A Guide to Bedroom Lighting

Source: fancypantshomes.com

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Editor’s Note: Lending Club no longer offers peer-to-peer lending on it’s platform. 

You’re probably already familiar with Lending Club, the largest peer-to-peer lending platform in the US. Since the site began operating in 2007, it has funded almost $16 billion worth of loans. It does this by bringing together borrowers and investors – who will be the ultimate lenders – on the same platform to make loan arrangements that will benefit both parties. This provides a form of direct borrowing/lending that effectively removes the “middle man”, which in traditional loan arrangements is the bank.

Borrowers benefit because many of them either pay lower interest rates on their loans, or are able to borrow money that would not be available from banks. But investors have perhaps an even bigger advantage – they are able to invest money in those loans and earn interest rates that are substantially higher than what they can ever get through the banks and other conventional fixed income investments.

The peer-to-peer universe, and especially Lending Club, are now drawing billions of dollars in investment capital from investors who are eager to take advantage of those higher returns.

Lending Club provides the perfect platform for the creation of new loans on a continuous basis. However one function that Lending Club doesn’t provide is the direct ability to buy or sell an existing loan note. For that, they are working with Folio Investing, an investment service that provides everything you need to buy and sell peer-to-peer loan notes on the secondary market.

And it all takes place through the Lending Club platform.

What Is Lending Club Folio?

Lending Club itself is solely responsible for the origination of new peer-to-peer loans. Investors can purchase entire loans, or they can purchase a small part of a loan, both of which are referred to as a “note”. You can purchase a loan note in denominations of as little as $25. This will enable you to diversify an investment of a few thousand dollars across a very large number of notes, limiting the amount of loss that you will suffer when a single loan defaults.

But if you want to sell a note before the end of the loan term, or if you want to purchase existing notes, Lending Club enables you to do that through its affiliation with Folio Investing.

McLean, Virginia based Folio Investing began operations in 2000, determined to bring about investing innovations that will help investors benefit from smarter investments. The company has developed new technology to help investors that have resulted in 19 patents. And the company is committed to developing even more.

You can actually open an account with Folio Investing for the purpose of investing through other platforms, in addition to Lending Club.

How Lending Club Folio Works

If you want to buy or sell existing notes, you first sign up for a Lending Club investor account and then move to the Note Trading Platform. There you can buy or sell notes from and to other Lending Club investors.

The Note Trading Platform is operated by Folio Investing through the Lending Club site. In order to participate on the platform you must have an account with Lending Club, and you must also open a Folio Investing trading account, which you can do through Lending Club. Folio is a member of both FINRA and SIPC.

If you want to buy or sell a note, you can offer it on the Note Trading Platform. There you will set the asking price. Potential buyers can browse through the list of notes available for sale, including your note, as well as get detailed information about each note. If a buyer is interested, he or she can choose the note, and place an order to buy it.

Pricing a note. The price of a note that is offered for sale is determined by the seller of the note. There is a marketplace rule however requiring a note not be priced at a markup greater than 70% of the total value of accrued interest and outstanding principal, or that would otherwise produce a negative yield to maturity.

Trades typically settle in one business day. Borrower payments made after the trade settlement go to the buyer, including principal and interest accrued before the sale of the note. The payments will be received from Lending Club, not Folio Investing.

In each sale, the transaction fee is paid by the seller, not by the buyer.

If you want to buy existing notes, rather than brand-new ones, you simply need to go to the Note Trading Platform and browse through the notes that are offered. There you can choose to buy any notes that meet your investment criteria.

We’ll discuss the reasons why you might want to invest in existing notes, rather than brand-new ones, below.

Features and Benefits

There are a number of benefits to selling existing notes, and selling them through Folio.

Liquidity – One of the limitations of peer-to-peer investing is the lack of options to sell a note once you buy it (it is one of the only real complaints about lending club). Not only are you unable to sell directly through Lending Club (other than through Folio), but you can’t sell them through a traditional investment broker either. At least at the current time, peer-to-peer loan notes exist only on peer-to-peer lending platforms. But through Folio, Lending Club provides you with an outlet to sell your current notes. That provides you with a solid measure of liquidity, that makes investing through Lending Club even more advantageous.

Portfolio management – With the ability to sell notes, you have an enhanced capability to manage your note portfolio. Let’s say that you invested in a note that met your criteria at the time you purchased it, but it no longer does; Folio provides you with the ability to sell it out of your portfolio and to move on to other notes. Perhaps this happens because the note does not perform as expected, or because you have changed your investment criteria since purchasing the particular note. As is the case with investing in any type of asset, it’s always best to have the option to sell the security after the fact.

Potential profit – Though it isn’t a common investment activity (yet), but it may be possible to earn extra income on a note if you can sell it at a price above par. For example, if you have a note with $75 remaining to be paid on it, but you can sell it for $77, you have an immediate additional profit of $2 on the investment. That may not seem like a lot of money, but if you can multiply the activity across many notes on a monthly basis, you could increase your investment returns considerably.

Fees – When you sell a note through Folio you are charged a fee of 1% of the purchase price. If you aren’t satisfied with the performance of a note, you may be happy to pay such a small fee in order to get out of it.

There are also a number of benefits to buying existing notes, and buying them through Folio.

Short-term investing – New notes purchased on Lending Club range from 36 months to 60 months. But let’s say that you don’t want to tie up your money for up to five years – you can buy existing notes through Folio that will have shorter terms due to the fact that they are already in progress. For example, you can purchase a 60 month term loan that has been in existence for three years; that means that the loan will have just 24 months remaining until it is fully paid. In this way, you can choose the maturities of the notes that you invest in.

Investment opportunities – You may be able to purchase existing notes that are priced below what you think they are actually worth. This could have something to do with the performance history on the note, or it can simply be that the current noteholder wants to dump it and move on. Whatever the reason, an underpriced note will offer you an opportunity to earn some extra principal on on it, in addition to the remaining interest due on it.

Loan “seasoning” – This is actually a term that is common in the lending industry. “Seasoning” refers to the fact that a loan is existing, and therefore it has an established payment history. This makes the integrity of the loan a known commodity. It is important to understand that there is no way to know with absolute certainty how a loan will perform when it is brand-new. Even borrowers with AAA credit profiles occasionally default on loans. But with existing loans, you have a better idea of the borrower’s willingness and ability to repay the loan. And since the loan has a shorter remaining term, that also serves to reduce the risk of the investment.

Access – There is simply no other source where you can buy existing Lending Club notes. They are not available through traditional investment brokers, despite the fact that they can represent profitable investment opportunities.

No Folio fees – Folio does not charge a buyer for purchasing existing notes. The only fee in the transaction is charged to the seller of the note.

Summary

If you are going to invest in peer-to-peer lending, as thousands of people now do, then it’s an excellent idea to sign up with Folio Investing through the Lending Club site. Folio will give you the ability to sell any notes that you are no longer comfortable owning. And if you decide that you would like to diversify your note holdings by adding existing notes to new ones, you will have that ability.

Liquidity – the ability to sell an investment – is a welcome feature in any investment portfolio. Not only does it reduce the risk of holding a note that you no longer consider to be investment-worthy, but it also gives you the ability to create the exact kind of portfolio that you want.

Once you become an investor set up a Note Trading Platform through Folio Investing, even if you don’t think you’ll use it. Chances are good that you will, sooner or later.

Source: goodfinancialcents.com

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I write a lot at Get Rich Slowly about Financial Independence, by which I essentially mean early retirement (or semi-retirement). That is, accumulating enough money that I no longer have to work. To me, escape from work has always seemed like the ultimate goal.

This is probably because my father held out retirement as a sort of Promised Land. He worked hard — if not always effectively — and he always made retirement and the end of work seem like the goal of life. And the sooner one reached retirement, the better.

But whenever I write about early retirement or Financial Independence, I get e-mail and comments from readers who never want to stop working. They love their jobs. Others write to say that we’re not supposed like the work that we do, but we’re supposed to do it anyhow. It builds character, and helps us pay the bills.