While various FinTech startups and incubation groups at established financial organizations are changing the financial services in variety of ways, from mobile only checking accounts to blockchain-based ledgers. I personally believe that in the near term biggest opportunity for FinTech lies in improving the efficiency of our credit and risk underwriting system.
The application of AI, to the Terabytes of data on consumer's financial behavior everyday that we can tap into, offers an unprecedented opportunity for us to reimagine financial underwriting. Unlike traditional banking products, this will enable millions of consumers get access to the financial products they truly deserve.
At the same, this will also help financial
institutions expand their reach to new consumer segments without changing their
Looking at the broader AI trends, I believe majority of the breakthroughs we will see in industries where structured data is in abundance, such as finance, manufacturing, supply-chain, travel etc. Some other industries such as a transportation and healthcare are also seeing a great deal of AI activity.
However, I believe in the near future scenarios such as cost/yield management, risk assessment and work-force optimization will be disrupted first. More complex scenarios where expected outcomes are less structured such as self-driving cars, natural language understanding and drug discovery will still take longer for any meaningful level of disruption.
I strongly believe 'Autonomous Finance' is the future we are heading towards, which will fundamentally transform the financial services as we know and interact with today. A long envisioned personal financial assistant is starting to take a shape now and over next couple of years this will truly become a reality.
An AI powered personal financial assistant that can help consumers make right decisions from choosing the right financial products (loans, insurance, credit cards) to automatically shifting their balances to optimize cost of borrowing for them while ensuring the longer term financial progress possible for them.
Over 70% of consumers are still making financial transactions offline, because they find it more trustworthy and personal when interacting with human representatives at a bank or over phone.
As AI developments make digital financial
assistants more capable and personalized, we will see an exponential shift in
the consumer behavior in relying on these new assistants for their financial
needs. At macro level we will see gradual reduction in mis-priced financial
products for consumers. The future financial products will be designed with
priority towards consumer benefits rather than optimizing for yields.
There are 3 key suggestions I would make any organization exploring to adopt AI in their business:
1) Relentlessly look for strategic data sources.
2) Gather experts and train your work-force to become AI ready and
3) Look for the unique ways in which AI can serve your customer's needs.
Over the next 3-5 years basic building blocks of AI are bound to become commodity and the only way organizations will be able to craft a winning strategy is by leveraging above mentioned 3 key resources.
Join us in the Accelerating Digital Transformation Conference at FinTech Connect 2018 to discuss the increasingly evolving nature of the financial landscape and the impact of new lending, saving, investing and funding platforms.