Original article can be found here (source): Artificial Intelligence on Medium
Big AI Trends That Will Revamp Fintech In 2020
Do you know Fintech space is one of the largest growing industries across the globe? Which technological forces are ruling in these industries? How AI comes into play here? What will be the AI trends in 2020?
Just like the other industries, technological disruption has affected the financial sectors too. This fusion of technology and the financial sector is called “Fintech” and has now become a mainstream term. The rising penetration of internet users has brought a storm in the market. There is a rapid shift to mobile devices for transactions or related action.
According to Mordor Intelligence, the estimated share of AI in the fintech market was USD 7.27 billion in 2019 and expected to reach USD 35.40 billion by 2025. The CAGR of 31.5% can be witnessed during the forecast period 2020 to 2025. The major players of this financial tech arena are IBM Corporation, Intel Corporation, Microsoft Corporation, IPsoft Inc., and Next IT Corp.
“The last ten years have been about building a world that is mobile-first. In the next ten years, we will shift to a world that is AI-first.” -Sundar Pichai
Now, know the best AI trends 2020 roaring in fintech industries:
A) End of manual underwriting and the rise of the ‘just-in-time’ lending paradigm
The future fintech industries will revolve around AI that automates the financial lives of customers and improves the financial results. AI can perform real-time analysis and make smart decisions. It will trigger the just-in-time lending model, and the customers will be given the best insurance policies at the lowest prices. Whereas the underwriters, lenders, money managers in any industry are at risk if it contains the crunching numbers to estimate a return.
B) The emergence of Fintech Cloud and Infrastructure (BaaS/IaaS)
A real BaaS platform- managed service for the developers and data scientists to create and run excellent machine learning models on the production. It enables them to develop their financial products together with a fintech cloud-like ML cloud. Even, it would be the next step in the fintech infrastructure evolution.
C) Reduced Financial Crime, NLP and Compliance Automation
The risk and compliance function suffers from the massive data load and exhaustive regulative demands. With NLP (Natural Language Processing) in fintech can help in understanding the Govt. regulations and create-sensitive policy tests. This policy test refers to an unambiguous set of the do and can’t make lists that every fintech has to follow in the jurisdiction.
Network analytics determine the connections between individuals in to evaluate the risky networks and parties. This leads to a reduction in financial crime due to increased transparency and liquidity that makes easier anomaly detection.
D) Platform shift and Voice-First Fintechs
Voice search is the ultimate need of every industry, so how can fintech be left? As we know, voice is a default UI, and there are huge benefits of voice-first fintech.
Let’s see how: On-demand micro-credit — “Alexa, can I borrow $500 from Mr.A?”
Transactions- “PNB, send Manish $200 from my IDFC account.”
Investments — “Alexa, buy $200 of Bitcoin for me.”
We are in the new age of intelligent applications. These are purpose-built, and the contextual signals like hardware, sensors, location, previous usage, and predictive computation kept in mind. In short, human-voice will be a primary interface in 2020.
E) AI & customer loyalty’s new battlefield
Personalized payroll, salary-linked offerings, and benefits will be the next trend of AI in 2020. Everyone manages their salary differently, and the limited options of the banks don’t solve everyone’s problems. In contrast, AI will ease this process, too, with the more in-depth analysis of transaction history that results in customization and contextualization.
F) AI+ Blockchain — The Ultimate Future
Both blockchain and AI include technical complexity, and their joint use can advance and improve the business models significantly. Blockchain’s immutable data doesn’t require any centralized verification, which could be vital for identity management. AI will enable the execution of complex and automated smart contracts, allowing the more blockchain use-cases to join the mainstream. Some of these applications would be Collective AI Investment Management Platforms and AI Marketplaces.
G) No payment intermediaries
With the ubiquitous transformation payment platforms, interoperability will be the next norm. The manual process will be automated completely in the payment process. In this transformation, interoperability will be the next norm. The manual process will be entirely automated in the payment process.
The advanced and intelligent machine will know-your-customer procedures, perform onboarding, run payment backends, scan millions of transactions as well as sales plus marketing. In the coming years, AI will be a central driver of the payment instance in the first instance.
H) Collaborative AI and collective solutions for shared problems
The collaborative solutions developed on shared datasets will radically increase the accuracy, non-competitive functions, timeliness, creating mutual efficiencies in the operations, and enhancing the safety of the financial system.