The financial industry is revolutionized with the integration of artificial intelligence. It not only enhances the precision level but also speeds up the query resolution period. With the help of enhanced efficiency and accuracy, human problems are solved with the help of AI.
FinTech firms have revolutionized the computational arms race in the last two decades.
A broad range of advanced technology, including Artificial Intelligence (AI), Machine Learning and Neural Networks, Evolutionary Algorithms, and Big Data Analytics, has allowed computers to cruise diverse, and profound data sets.
But one question should be a subject of discussion: is this man-made technology actually reliable or not?
Finance + Technology = FinTech
FinTech is the abbreviation of Financial Technology. The term Fintech is used in general terms as finance partners with technologies for improved goods and effective processes. It is used as a noun for starting of Fintech and as a verb. Although the term evolves from banking to other practices such as insurance, reciprocal funds, and personal finance management, Fintech does not have a specific meaning.
The most important and major reason for the rise in technology is an industry is “demand and supply”. The customer drives the market drivers for Fintech services. Supply factors have been primarily from former banks and technology giants, nowadays start-ups from Fintech.
The young generation today has grown up in an era where the world is innovated by technology.
Losing Privacy is Easier But …
FinTech providers focus primarily on the collection of in-depth customer knowledge and behavior. This has culminated in financial services becoming the most intensive data customer. FinTech champions say that consumers take advantage of custom goods and lower costs, allowing greater knowledge of customer tastes to be feasible.
Critics claim that it not only increases the level of privacy violations but can also exacerbate financial isolation because customers who are perceived as unsafe or who have no digital footprint can be priced out.
Based on the actions of other customers with similar buying patterns to you the reputation risk could also climb.
A credit card business in the U.S. has deemed a credit liability to their customers because, based on reviews with other borrowers and redemption history, they were likely to pay for marital counseling, rehab, or reparation programs using their cards.
… Losing Wallet is Harder
While cash still accounts for roughly 85 percent of customer transactions, worldwide cash-free transactions rose by nearly half between 2009 and 2014. Some of the largest tech companies have now settled down with Apple Pay getting a market share of 57 percent, followed by Samsung Pay and Android Pay.
Digital payment services are also trying to convince customers to use their payment channels. Their new payment strategies were fulfilled by 49 percent of customers.
How AI and ML are Combating Scams in the FinTech Industry
The market has been changed by the introduction of AI and ML in the financial sector. Since fintech is an emerging market, it needs solutions unique to the industry in order to achieve its objectives. Here, AI tools and machine learning can be amazing. You’re interested in learning the effect on Fintech of AI and ML? They are useful not only for the enhancement of clarity but because different proven innovations also speed up all financial processes.
Financial solutions focused on AI concentrate on the critical needs of the modern financial market, including enhancing consumer service, cost-effectiveness data convergence in real-time, and improving security. Adopting AI and its applications together allows the industry to build for its clients a healthier and more stimulating financial environment.
In reality, some 50% of financial services and insurance undertakings now use AI globally, according to a Forrester research group report. And with recent technical developments, the number is expected to increase. Financial and bank activities were facilitated through the use of AI and ML. Fintech businesses offer personalized products and services to satisfy the demands of the changing market through such smart technologies. FinTech is adopting following services to prevent fraud.
To prevent data breaches, financial sectors are arming themselves with identity verification service as everything is prone to digitization in this modern innovative world. Cyber attacks are rising in parallel with innovative technologies. Customer authentication has been a must for a long time in financial sectors. It guarantees the inclusion of real clients and the absence of companies of fraudsters.
Per year there are breaches of the data by banks, insurance providers, fintech businesses, and numerous other industries. The number of breaches has made automated consumer on-board verification not only a competitive priority but also an important method for data processed during on-board verification in the cloud.
Identity verification also involves age verification, document authentication, geolocation, and consent verification.
Strong security action is required because of the growing amount of cyber threats and internet fraud. Cyber-threats are common nowadays because of unchecked internet access. Registered entry is the only viable way for online companies to engage in the digital field by allowing licensed organizations.
In-situation approaches for checking the identification of consumers with anti-spoofing steps require better customer verification.
Facial recognition technology is one of the leading tools for coping with digital fraud in unsupervised authentication solutions. Advanced biometric security systems will counteract the advanced spoofing activities of fraudsters who want to achieve unauthorized access to user accounts. Facial recognition uses a 3D animation detection feature to identify the user’s remote presence at search.
There is no hint of slow-down account acceptances, bot attacks, and spoofing attacks, and as we reach a new decade, businesses will begin to find that they are no more secure in defending online accounts through these conventional authentication approaches.
In order to ensure that the digital identity of the customer suits their real-life identities and protects data from the hands of the fraudulent, companies are expected throughout all sectors to start to explore and implement some form of password-less or biometric authentication.
For advanced biometric authentication schemes, liveness detection defends against rapidly increasing spoofing attacks. For starters, scammers are today using the photograph, videos, or even a basic mask to circumvent the selfie preamble, which is often needed to substantiate the digital identity of a government-issued document such as a passport and driver’s license.
Technology is designed to provide comfort and speed. Yet in addition to these advantages, internet fraud is still growing. In the end, financial institutions and Fintech firms invest in AI and machine learning to defeat fraudulent transactions.
Solutions for AI and machine learning are powerful enough to answer in real-time and to analyze additional data fast. The organization, for various types of machine learning, may identify effective models and recognize fraudulent processes. Fintech can help develop stable financial tools and applications using these technologies.
An immense number of data for improved implementations can be processed and optimized with AI and ML. Fintech is also the right field where AI and machine learning technologies have a bright future.
Choose Wisely
Emerging technology such as artificial intelligence and deep learning remains vital to the Fintech industry, as the market continues to expect simpler and quicker transfers.
AI and ML-based technologies have tremendously strengthened the Fintech industry. As a result, financial institutions now provide clients with quality better banking services.
Worldwide, leading finance and banking companies find an industry more stable and automated using the ease of artificial intelligence.
Image Credit: shutterstock–1845151204
Jeff Parker
Jeff Parker is an identity fraud expert and author of various blogs writing about advanced technologies including artificial intelligence, machine learning and data science. Previously, he has worked as a consultant, often assisting small businesses in digitalization and online fraud prevention.
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!
Radek Zielinski
Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.
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!
Deanna Ritchie
Managing Editor at ReadWrite
Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.
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!
Deanna Ritchie
Managing Editor at ReadWrite
Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.
