It’s clear that artificial intelligence (AI) is already one of the defining trends in fintech in 2017 and an increasingly popular buzz word in the industry.
Businesses are gradually understanding the importance and benefits of machine-learning technology. Self-made billionaire Mark Cuban has boldly claimed that the “the world’s first trillionaire will be an AI entrepreneur.” He goes on to say that faster computer processers and large data sets have the ability to push AI into a wealth of industries and services.
He has a point. We have access to more data today than ever before, and with the increase of solution-finding apps that help consumers find patterns in their habits, businesses and start-ups, the bars are now high for the fintech industry.
As computers and robots begin to replace human efforts, even the most desirable jobs could be at risk. The financial services sector has been integrating machine learning into its practices primarily to cut time, cost and energy.
According to a report published by Accenture, investment in fintech has risen by 10% globally to reach $23.2 billion in 2016. The report also shows that the US holds the highest economic benefits for the integration of automated services, increasing its annual growth rate from 2.6% to 4.6% by 2035. In the UK, AI could reportedly add an additional $814 billion to the economy by 2035.
Rise in innovation
Machine-learning is predicted to disrupt the way businesses integrate their services both on and offline. Automation will lead to better accuracy and can be used to predict behaviours, not to mention speed up back office process, which usually take up a hefty amount of time and labour.
Innovation in technology is becoming widely accepted and setting the standards for fintech markets. Amazon’s Alexa was the e-retailers best-selling online product following the Thanksgiving holiday in 2016. Google Home demo-ed late last year and has already set its sights to take on Alexa’s record breaking title in popularity for a home automation system. Google’s home automation system goes one step ahead of Alexa by combining users’ internet history of making voice queries through Google browsers and apps, providing better data for understanding patterns and algorithms. Experts believe that Google could overtake Amazon’s Echo device with the integration of algorithms and data.
And it’s not just clever home automated devices that are changing the way we interact as consumers either. RBS recently developed Luvo, a technology that assists the banks service agents in finding automated answer to popular customer queries. Mobile banking apps such as Monzo and digital payment services make it easier than ever before to understand payment habits, and can even assist the consumer to create healthy spending habits.
The best purpose for AI is essentially removing the need for human interaction and letting machine-learning technology do the work. The rise in innovation is slowly letting automation replace mundane tasks that businesses nowadays face, and is gradually replacing human decision making with more compelling technology. These algorithms can determine and predict decisions, and can also be integrated into business-models to recognize patterns to save time for repetition.
Competition gets tougher
“AI is poised to transform business in ways we’ve not seen since the impact of computer technology in the late 20th century,” says Paul Daugherty, chief technology officer, Accenture.
“The combinatorial effect of AI, cloud, sophisticated analytics and other technologies is already starting to change how work is done by humans and computers, and how organizations interact with consumers in startling ways. Our research demonstrates that as AI matures, it can propel economic growth and potentially serve as a powerful remedy for stagnant productivity and labour shortages of recent decades.”
Adaptation of machine-learning is going to create stiff competition within workforces. Within ten years, experts predict that machine-learning will be a valuable and desirable part of fintech businesses. The potential to boost productivity in labour and its cost, especially in developed countries, has seen the need for AI rise significantly.
The fintech sector
The fintech sector is starting to use artificial intelligence in different ways. The crossover between AI and fintech comes where AI is creating disruptive technology for the consumer. Payments and digital transactions are the key areas for successful integration of AI services to enhance the consumer experience.
As artificial intelligence eliminates the possibility for human error, the system can really get to understand the consumer, where human efforts can be inconsistent and lack good service, and has the potential to make traditional banks exist and influence a digital surge.
Whilst integrating AI into digital banking and finding solutions is a primary focus, there are other uses he use of AI that serve a better purpose than human interaction can. California-based fintech company Wealthfront has recently integrated AI technology to assist tracking account activity within its own products. Kensho uses AI to filter through copious amounts of data and market information, to find correlations between real world fluctuations and impact on consumer’s assets and personal finance. The fintech sector can make great use of allowing the technology to provide customized advice, decision-making, assisting with collaboration and enabling end-to-end data integration.
FFB is a not-for-profit platform that engages different types of financial institutions of the country; assist them in their journey to reach next level