Artificial Intelligence

AI and Machine Learning boosting FinTech

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Boosting – Yes for sure industry is using AI and machine learning to increase returns, lower costs and improve customer experience. The companies still not open to welcome and adopt changes brought through new electricity called as Artificial Intelligence will slowly die because of no power.

 

Artificial intelligence & FinTech

Artificial intelligence is poised to transform the financial industry. This intelligence will be built on modern software platforms that combine data from different sources. Data sources can be from platform which generate data i.e social media or from data collection platform i.e back end system of any industry.

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So for responding to 2 main questions as mentioned below around AI in FinTech

  • Where do all these AI trends fit into the FinTech & finance industry?
  • How machine learning algorithm will transform financial technology services?

We need to go into little details about Finance, Banking, MNO provided financial services, Financial Technology, Blockchain, AI, Machine Learning and data science to put them together on one photo frame.

 

Banking

Digitization gave banks the opportunity to take customer service to the next level. At the same time offering the possibility for higher automation. The related cost efficiencies are now taken care by AI , chat bots and machine learning.

Essentially, digitization took banks from just being product providers to service offering, continuous contextualized services and helping customers to better understand their financial and commercial affairs and make smarter decisions.

Bank Inclusion Then and Now.png

 

 

MNO led Financial Services

Banks lost out on revenue from mobile transactions as MMS became increasingly popular.

Major success factors of MMS being the flexibility to transact at anytime, anywhere and with access to make payments to utility bill companies, airtime sellers and merchants. To maintain relevance, banks started working on technology based payment solutions in collaboration with card companies and opened their doors to all customers and services.

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AILabPage’s FinTech Series – MNO Led Model

This brought about the merger of mobile money services, mobile financial services and mobile banking services. With this fusion, cross border remittances, peer-to-peer transfers, utility bill payments, internet & DTH subscriptions and income tax transactions completion within seconds.

 

Little History on Financial Technology – FinTech

FinTech or Financial technology, is an industry combining and grouping companies that are making financial services including insurance services more efficient and advanced; with use of technology.

FinTech Evolution – Companies coming in FinTech domain are startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software but more on Banking as a Platform(Baap) and Banking as a Service(BaaS).

AI and Machine Learning boosting FinTech

Artificial Intelligence and Machine Learning in Finance, Regulation and Central Banking needs to be taken and adapted as basic need. Sadly till date most of machine learning algorithms today cannot offer reasoning. At the same time all of them predict assuming past will be repeated if all other factors in business environment will remain constant.

 

Blockchain and Digital Payments – PaymentIntelligence

Blockchain is a new approach to managing/monitoring financial and other transactions. Main features for block chain are

  1. Shared single point of truth
  2. Immutability
  3. Non-repudiable  – This means once transaction is committed cannot deny later.

 

Digital Payments – Digital transformation of payments into secured PaymentIntelligence was biggest break through after 2008 financial crises or recession.

PaymentIntelligence

AILabPage’s FinTech Series – PaymentIntelligence

 

One View – AI, ML, Blockchain & FinTech

To put all of them in picture is not a an easy job though. We don’t have any successful model which has all these niche technologies in photo frame. Lots of banks and FinTech are working to bring this amazing product which is fully functional and working into life.

Banking as a Service – BaaS – This is need of time. This will have security of blockchain, intelligence of machines and algorithm and eyes of AI. To draw the rough sketch just to give one view it might look like as below.

DeepLearning method are helping time-series data processing and prediction for financial markets. These techniques for traditional feature extraction via intelligent trading decisions. are supporting FinTech system. The used techniques are applied to several technical indicators and expert rules to extract numerical features. Algorithmic trading framework with use of deep convolutional neural networks is good start for FinTech

 

 

Books + Other readings Referred

  • Research through Open Internet – NewsPortals, Economic development report papers and conferences.
  • Personal experience of  @AILabPage members.

 

Sign-tConclusion- The financial services including insurance industry is facing a long pending wave of digital disruption. In the future; expectations are that the new methods and algorithms under deep learning framework could be applied to FinTech world. This would generate innovative applications in the next financial technology generation. This disruption has started to reshape the entire banking/payments sector allready anyways.

Todays’s need of payment industry is Payment as a Service – (PYaaS). PYaaS or now I call as PaymentIntelligence can solve current issues like high cost, slow-speed and bundles of papers for kyc. New concept of BaaS with AI will revolutionise the market. We have too many payment companies in market with zero or no experience but still doing good on gratitude basis as talent and education may not needed here. Banks has platforms, but it’s probably fair to say it’s more like the yesterday’s platform. What is needed is Intelligent banking platform on clouds.

 

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