Deep-dive into the world of AI from a FinTech Lens

Deep-dive into the world of AI from a FinTech Lens

AI has reached has finally reached its tipping point.
“The technology has finally reached its tipping point, AI, and its close relative machine learning, have taken a variety of industries by storm, bringing self-driving Ubers to the streets of San Francisco (and then carting them away); robotic vacuum cleaners to dirty household floors; and natural language processing to chat bots and IVR communications. With AI already embedded into these industries, it’s easy to find examples of how the technology is shaping fintech.” – A Fintech Filter for Artificial Intelligence in 2017 by Julie Muhn (@julieschicktanz)

The goal of AI is not to replace the human in the first place, but rather to remove the repetitive and time-consuming robot-like tasks from the stack and to empower the insurer to be more human again. 
“To make reliable predictions AI needs, apart from a clearly formulated question, are masses of clean data to learn from, highlighting another challenge for insurers, namely data quality, privacy issues and the integration into legacy systems. It is easy to let these challenges cloud our sight for the opportunities that lie ahead. With AI we can automate major parts of the process. The goal is not to replace the human in the first place, but rather to remove the repetitive and time-consuming robot-like tasks from the stack and to empower the insurer to be more human again.” – Artificial Intelligence: the new kid in town by Insurers.AI

Even though AI feels like it’s going mainstream, consumers don’t yet fully trust it.
“Artificial intelligence is booming. The success of Amazon Echo and Google Home smart speakers show there is a healthy appetite for AI assistance. Autonomous, self-driving cars are in being tested by the likes of Google and Tesla. AI-powered platforms such as IBM Watson and Wipro Holmes are able to diagnose cancer, analyze retail data, and communicate through ordinary spoken and written language. But even though AI feels like it’s going mainstream, consumers don’t yet fully trust it. A study of more than 12,000 people in 11 countries reveals that people aren’t quite ready to surrender control to silicone and microchips. Research reveals a lack of understanding and trust in fintech that is stalling mainstream adoption of innovative new services which could make millions of people’s daily lives simpler and more secure.” – Rise of the Machines? Consumers Say They Don’t Trust Financial AI By Jeffry Pilcher

The real threat of artificial intelligence is not a cyborg armageddon but unprecedented economic inequalities and even altering the global balance of power.
“Too often the answer to this question resembles the plot of a sci-fi thriller. People worry that developments in A.I. will bring about the “singularity” — that point in history when A.I. surpasses human intelligence, leading to an unimaginable revolution in human affairs. These are interesting issues to contemplate, but they are not pressing. They concern situations that may not arise for hundreds of years, if ever. At the moment, there is no known path from our best A.I. tools (like the Google computer program that recently beat the world’s best player of the game of Go) to “general” A.I. — self-aware computer programs that can engage in common-sense reasoning, attain knowledge in multiple domains, feel, express and understand emotions and so on. This doesn’t mean we have nothing to worry about. On the contrary, the A.I. products that now exist are improving faster than most people realize and promise to radically transform our world, not always for the better. They are only tools, not a competing form of intelligence. But they will reshape what work means and how wealth is created, leading to unprecedented economic inequalities and even altering the global balance of power. Or to put the matter more optimistically: A.I. is presenting us with an opportunity to rethink economic inequality on a global scale. These challenges are too far-ranging in their effects for any nation to isolate itself from the rest of the world.” – The Real Threat of Artificial Intelligence by By Kai-Fu Lee

A world without money, AI and promise of big data, blockchain control and next gen finserv – FinTech Summary 80

FinTech Summary 80

This Monday we had our first Fintech dinner and I’m pleased to say that it was very successful. I was so impressed by the people attending, thank you very much for making it happen, and for reading fintech summary! We all learned something new, met someone fascinating and had fun in the process. While this was the first, it certainly won’t be the last fintech dinner. Just reply to this email if you want to join the list to attend any of the future ones. I’ll keep you in the loop 🙂

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,
Alex

 

A world without money
By Chris Skinner

Before this seismic change, money didn’t matter. We shared beliefs that allowed us to live together in relative peace, but the creation of money changed the balance of humanity. Some of us became more powerful, whilst others weaker. In fact, the biggest change between the first age and the second age is that it is no longer muscle that wins. It’s brains. The reason I’m writing this is that I’m wondering about the future of money. If money is a myth, created by governments to control the masses.  Then what happens if we have no money in the future? Stripping the world of the wealth focus and monetary controls could be an interesting future nirvana … or it could be anarchy and destruction.

 

Artificial intelligence: fulfilling the failed promise of big data
By David Weldon

The topic of artificial intelligence is dominating discussions of data management this year. But while a growing number of organizations are interested in AI, many don’t fully understand what the technology can do to help boost their customer engagement or the bottom line. AI promises to automate the process of understanding customers and anticipating their needs, then delivering the right experience to them at the right time. Organizations are hoping to impact the top line by acquiring new customers and increasing the value and lifetime of existing ones, and they’re hoping to impact the bottom line as well by reducing costs through automation. The primary challenge is and will always be the data. Data is the lifeblood of AI.

 

Who controls the blockchain?
By Patrick Murck

Blockchain networks tend to support principles, like open access and permissionless use, that should be familiar to proponents of the early internet. To protect this vision from political pressure and regulatory interference, blockchain networks rely on a decentralized infrastructure that can’t be controlled by any one person or group. Unlike political regulation, blockchain governance is not emergent from the community. Rather, it is ex-ante, encoded in the protocols and processes as an integral part of the original network architecture. To be a part of a community supporting a blockchain is to accept the rules of the network as they were originally established.

 

Financial services – the next generation … where is it?
By Chris Skinner

We have three major fintech models, each with their own unique blend of thinking. You have the Legacy West, the Growth East and the Innovative Emerging. If you’re looking for the next-generation financial system, you definitely will not find it in the Legacy West. That will show you the next generation of the existing system. You need to look to the emerging markets specifically, as they’re leapfrogging all of us. A great example is that the emerging economies will show us the next digital identity scheme, as this is critical to inclusion.

Future vs Past

Future vs Past - FinTech

One of the landmark political changes has happened on Friday. I don’t want to go into details of that event but I just want to share a short write up by Albert Wenger, a VC from Union Square Ventures. This is something I deeply agree with:

 

The Fight of Our Lifetime: Past against Future

Many of the people in power or currently grabbing for it are trying to maintain the recent past or even go back further. This is the fight of our lifetime. The Past against the Future. It is NOT: left against right, rich against poor, black against white, Islam against Christianity, men against women.

Do not let yourself get dragged into these fights, that for now just serve to keep us in the past. Yes, there are vast injustices in the world that need to be addressed, but if we get stuck in the past we will have no chance of ever doing so.

The past wants: less innovation, less automation, less science, less tolerance, less diversity, less democracy, less transparency, more nationalism, more fear, more greed

The future needs: more innovation, more automation, more science, more tolerance, more diversity, more democracy, less nationalism, less fear, less greed

The past scarcities were: food, land, capital.

The future scarcity is: attention.

Do not live in the past. Do not enable people who want to take us back further into the past.

Fight for the future!”

 

We can’t afford to stop progressing towards a better future.

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,
Alex

 

The Use of AI in Banking is Set to Explode
By Jim Marous

With an origin rooted in risk and fraud detection and cost reduction, AI is increasingly important for financial services firms to be competitive. The digital consumer is being trained by firms that are becoming masters of AI (Amazon, Google, Facebook and Apple) and expect the companies they use to know them, understand them and reward them through personalized communication. This is just the tip of the iceberg. Soon, all financial services firms will leverage the power of AI to deliver better experiences, lower costs, reduce risks and increase revenues.

 

Fintech Is Entering The Third Wave And This Will Be A Wild Ride
By Bernard Lunn

Financial Services is a big % of GDP, of employment and of corporate profits. Many big companies, that are not labelled as Financial Services, make a lot of their profit from Financial Services. Almost all of this can be digitized and is therefore susceptible to disruption. In short, there is a lot of money at stake. That also means that a lot of money is spent to persuade people that nothing will change and the status quo will remain. Perception does impact reality (aka mindshare leads to marketshare). However, this is PR. The reality is that incumbents can no longer dictate the pace of change. They can benefit from change or be hurt by change, but what they cannot do any longer is dictate the pace of change.

 

The Catch 22 of Banking
By Chris Skinner

We live in a Catch 22. In every developed economy, there is a core group of banks who control everything. The result is that in some countries we are seeing a whole new raft of digital and physical banks launching. People call these challenger banks. They’re not. I call them neobanks, and here’s the Catch 22. A neobanks will grow in a niche. If it ever breaks out of that niche into the mainstream and challenges the large incumbents, what will happen? The big banks will just let them do it? I don’t think so. When banks see a true threat they either buy it, copy it or kill it.

 

Trust, Not Tech, Is Fintech’s Advantage Vs. the Banks
By Grace Noto

As the world grows more comfortable with digital, the key to retaining customers is not going to be the technology, but through customer trust. That means the biggest advantage fintechs have over banks isn’t technological innovation, but a lack of that legacy of distrust. Technology is easier to grow than consumer trust—building an omnichannel digital banking service is not quite as difficult as it was just a couple of years ago, even if a bank has to strip a legacy system to do so. Coming up with a stellar integration of both—in other words, growing trust through technology—is what’s going to keep fintechs top of mind for consumers.

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FinTech Weekly Summary | July 03 – 10

The nature of financial service companies is to wait and see. Be prudent. Most of the technological innovation is adopted after it has already ‘gone mainstream’. This is a safe approach and is adopted across the industry. A prisoner’s dilemma of sorts. But what if one of the participants really committed to implementing the new big thing before everyone else, for example, Artificial Intelligence. Could that shift the balance of power within the industry? I would love tech to seen as a competitive advantage rather than compliance-driven implementations to provide reports of higher granularity.

Have a wonderful week,
Alex

 

Artificial Intelligence In Banking – A Pain In The Bot?
By Luis Rodriguez

The bots of today, regardless of the industry, are indeed a bit of a pain, and with very limited added value for me as user in comparison to alternative UI. But IMHO, they’ll undergo exponential improvement and will definitely become part of our overall banking experience, not as an either/or choice, but almost certainly as some kind of hybrid model. So, in spite of the hype and overload of bot-related articles (including this one), banks would do best to start thinking about not when, but how to design a user experience of a natural language interface that fits their institution, because AI technology for finserv is nearly ready for primetime.

 

The Future Of Financial News
By Scott Tindle

Most financial news remains inaccessible. The jargon-filled writing assumes its readers have a relatively sophisticated knowledge of financial markets. The articles are also of considerable length. The combination does not make for easy reading — and leaves most professionals unwilling to engage with the content, despite its importance to their work and their lives. We think the future of financial news consists of a trusted brand that provides high-quality content but does so in a way that’s easy for people to understand. Curation and explanation make financial news accessible — and relevant to our readers. There is a new wave of companies such as Finimize that do just that.

 

FinTech To Halt Or Grow After Brexit?
By Khojinur Usmonov

Many companies in the EU, including fintech companies, use a mechanism known as “passporting” to access Europe (the European Economic Area) by getting licensed in a EU nation to be able to sell products and services across the bloc. If the passporting privilege is lost, companies will have to submit applications in every single country they wish to operate in, which is time consuming and cost prohibitive. Brexit is likely to make it costlier and more complicated for start-ups to attract and retain talent. Plus, other EU members, such as Ireland, probably want start-ups and talent to come to their cities, not stay in the UK.

 

Blockchain: The Answer To Life, The Universe And Everything?
By Alex Hern

The core of the idea is to get computers burning energy in order to prove that they are trustworthy, and stamping that trust on the “blocks” of recorded transactions. You could still lie to the network – but you’d need to burn more energy doing so than every honest participant, combined. Even for those uses where it can be transformative, blockchain technology still comes with its downsides. More fundamentally, sometimes centralisation can be a good thing: a fraudulent credit card transaction can be reversed by the card company, but stolen bitcoins are gone forever.

 

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