COVID-19 has changed nearly every aspect of our lives. We are gradually adopting the ‘new normal.’ For example, virtual meetings are replacing in-person meetings; people are shifting to digital shopping, and much more.
Let me tell you; these changes don’t exclude banking, either. The industry noticed a significant shift to digital banking during the pandemic. McKinsey’s recent report states that our country has advanced five years ahead in consumer and business digital adoption in only eight weeks.
Wells Fargo Securities analyst Mike Mayo told American Banker, “What we’re seeing is the greatest acceleration of digital banking in history.”
Fintech has been an integral part of digital banking. But what exactly is that?
Well, it’s a combination of the term “financial technology.” Fintech refers to the implementation of various technologies to offer financial services to customers without any hassles.
A World Bank report shows that the fintech market reports rapid growth during the pandemic.
However, the customer satisfaction level has been reduced due to digital banking.
A 2020 study by J.D Power revealed that overall customer satisfaction of the banks declined due to the transition from branches to online banking.
So, banks need to use fintech in a more customer-friendly way after the pandemic. In this way, the satisfaction levels of customers won’t be affected.
Virtual voice assistants
Traditional banking rarely provides customer service 24/7. But artificial intelligence virtual assistants can offer customer service round the clock.
Most virtual assistants help you with tasks like checking your account balance, paying bills, managing credit and debit cards, etc.
But what if the banks implement virtual voice assistants?
You might have used voice-activated devices like Siri or Google Assistant to play music, get directions, call someone, etc.
Banks also need to use virtual voice assistants for offering services. By doing so, you can save time that you would have spent typing and finding the solutions to your questions.
But very few banks have voice-enabled virtual assistants. For example, in the U.S. Bank Mobile App, you will find U.S. Bank Smart Assistant. You can use various commands for making transactions, like “What is the balance in my account” to know your balance.
Detailed view of your finances
Virtual assistants mostly help you carry out transactions and other banking-related tasks. But if you want to gain control over your finances, you need to know where your money is going. Based on that, you may need to change your spending habits.
So, banks should use fintech that helps the customers understand their spending habits. For example, take a look at Bank of America’s virtual financial assistant, Erica. Apart from standard banking services, it helps you to:
- Get a weekly snapshot of your month-to-date spending.
- Monitor recurring charges.
- Receive notifications of the changes in your credit score.
In short, you can get a clear picture of your financial life. It helps you manage your money in a better way.
Digital banking is indeed more convenient. So, more and more people are adapting to it. But, unfortunately, because of this, fraud is on the rise, too.
Ryan Leblond, manager of fraud prevention and investigations for ESL Federal Credit Union in New York, says, “Fraudsters are getting much more advanced in their approaches.”
But thanks to artificial intelligence (AI) can help to protect sensitive data. AI follows a set of rules. Based on that, it reviews transactions and spending behaviors. If the AI detects any irregularities, it can send an alert to the customer.
Let’s say you usually make purchases of small amounts. But suddenly, your account shows a purchase of a huge amount. Of course, AI would flag it as a fraud and contact you right away.
So, banks need to use fintech to offer robust security, so their customers feel comfortable using digital banking.
Convenient payment methods
During the pandemic, a huge number of people shifted to online shopping. People who visit stores for shopping are increasingly using cashless and contactless payments through digital payment platforms.
So, banks should use fintech to upgrade all the physical debit and credit cards and implement the ‘tap to pay’ technology. By doing so, you can make contactless payments and save time as it’s faster than swiping or inserting your card.
Banks should also implement e-wallets due to their immense popularity and usage. Many e-commerce platforms and brands like Amazon and Starbucks are coming up with their e-wallets. These companies offer attractive cashback and reward points for using their e-wallets.
So, banks need to partner with various brands to attract more customers. Also, the customers will find it beneficial to use e-wallets instead of using cash.
Banks are installing biometric sensors and iris scanners to provide ATM (Automated Teller Machine) services. So, you don’t need to carry your physical card or have to worry about remembering your pin.
The biometric-enabled ATMs use fingerprint sensors along with eyes and palms to check authenticity. But the problem is, fraudsters can create synthetic fingerprints or use fake irises to breach security.
But thanks to fintech, banks can use finger and palm vein readers to authenticate their customers.
The vein scanner illuminates your finger or palm with infrared light. Then your hemoglobin absorbs it to create a profile. Its liveness detection helps to detect whether or not the fingerprint is accurate.
The bottom line is, fintech has brought a revolutionary change in the finance industry. Banks should use it to offer a wide range of services to their customers. During the pandemic, fintech provides various tools to help even tech-shy customers who are gradually learning to use apps to manage their finances.
So, once we return to our normal lives, some of our habits, like contactless payments, online banking, etc., are likely to remain. Fintech will play an essential role and become commonplace even after the pandemic.
Image Credit: anete lusina; pexels; thank you!
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!