Data Driven Society

Artificial Intelligence and Blockchain for FinTech

 4-MINUTE READ + TEDtalk

While currency of this century is still money, the most influential commodities are data and knowledge. Technology transforms all the information around humanity in data making the world manageable through science. The similar process is going on with FinTech sector. This article explores Artificial Intelligence, Blockchain, and the ways these innovations will affect life and businesses.

Better usage of
financial data

Big Data was the most gossiped term of the previous year. Now, in 2016 and 2017, it will be all about Artificial Intelligence (AI). And before getting deeper into the subject, it is crucial to understand the difference between Automation and Artificial Intelligence. Automation has relieved people from repetitive "copy-paste" tasks. In general, the automation processes have been around since industrialization period when machines started to perform workers duties on factories. On the other hand, Artificial Intelligence is more than just a technical solution. AI is used for collecting and interpreting, analysing and learning data and processes advancing existing algorithms and improving decision-making.

The FinTech sector applies Artificial Intelligence in several ways, all of them are directed towards satisfying more advanced customer needs rising from digitalization realm. Customers are getting less patient and more demanding. They want to have advanced solutions and get then at the moment of need. One of the examples of applying AI technology in improving services is Wealthfront, investment management and online financial California-based advisor. Wealthfront utilizes artificial intelligence to provide deeper analysis and thus customized financial advice for its clients. Welthfront's AI tracks account activity, analyzes spending habits, investing decisions, and performs constant deep-learning of client's actions.

Luvo knows what is
the best customer service

Banks start own initiatives to improve client service using AI. Royal Bank of Scotland (RBS) reported about a successful trial of the AI, called "Luvo". Luvo helps RBS employees with customer queries communicating with the staff through web chat. Luvo digests customer questions and scrolls through a tremendous amount of information in a split second. More complex problems are redirected to employees. Moreover, Luvo has unique human personality. It is approachable, creative and learns on the go. According to company's management, next step is to allow Luvo to interact straight with customers reducing the waiting time and improving the quality of the service.

Simon McNamara, RBS Chief Administrative Officer is excited about possibilities AI brings to customer service: “Luvo is a really exciting new technology that brings artificial intelligence to life and will help our staff serve customers better by resolving their questions and problems much more quickly. Its potential is huge and, we’ll be exploring if Luvo could talk to customers directly to answer straightforward questions, freeing up time for our staff to answer complex issues.”

Transaction time
from 10 days
down to 4 hours

Innovations are all around financial sector. Today, besides security, the speed of the transactions plays an essential role in the industry. Starting with customers who want financial operations to be performed immediately, finishing with the large trade transaction where time and transparency of the action becomes a fundamental requirement.

Blockchain takes away the third-party verification actor allowing all parties to track the documentation through a secure network. The technology is one of the perfect solutions existing nowadays. For example, according to blockchain.info, the number of confirmed Bitcoin transactions grew from 75,000 in September 2014 to 235,000 in September 2016. HSBC, Bank of America Merrill Lynch, Barclays and other financial institutions experiment implementing blockchain for its transactions. Experts estimate that widescale adoption of blockchain is only five-ten years away.

This year Barclays in cooperation with Israel-based start-up has taken blockchain experiments out from labs and performed first real trade transaction using the technology. The deal like $100,000 export agreement between Ornua, Irish agri-food co-operative, and Seychelles Trading company would usually take up to 10 days to execute. Wave, blockchain platforms developed by Barclays, accomplished the operation in 4 hours. "We've proved the reality of this technology and the client, Ornua, has asked us when they can do the next transaction in this way, which proves how user-friendly the entire process was," said, Baihas Baghdadi, Barclays' global head of trade and working capital. Moreover, this transaction is paperless which is highly beneficial for the environment, supply chain, cost reduction and error-free documentation.

Shifting existing values
and the whole system

Blockchain technology is going to change the value system and empower self-expression of humanity. It will drive the new stage of development that comes after post-industrialism. People will become more independent, interaction more transparent, and "brain creation" will be the most valuable while other operations will perform effortlessly and cost-free. As The Economist puts it, blockchain is "a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.”

In his TEDtalk, Don Tapscott, co-author of Blockchain Revolution book, explains the radical change Blockchain will bring to society. He argues that blockchain will make business and cooperation de-centralized empowering each person to perform own job and sell it without a third party engagement. Moreover, it will fix intellectual property issues in the emerging technology time. Watch the whole speech to get deeper insights on the changes:

Insight Box

Artificial Intelligence fuels sectors like consumer banking, advisory services, personal finances, and investments. AI will provide a deeper understanding and solutions for investment decisions, customer service, and other banking activities. It will totally reinvent the consumer experience in whole. In addition, blockchain will make the world more transparent and each person more independent. AI and Blockchain together will change the working and organizational processes, which might cause the world of entrepreneurship. Will you be the one to catch the trend or to follow?

#Artificial Intelligence #Blockchain #AI #RBS #Don Tapscott #Barclays #FinTech #future trends

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About the category

Nowadays humanity produces twice as much data as through all the time till 2007. Existence of massive volume of structured and unstructured difficult to process data is the game changer. Big Data is a statistical instrument with potential to improve world’s operations, increase its speed, make more intelligent decisions, and, consequently, forecast the future.

Punda investigates how Big Data influences on our daily life and business environment, which obstacles does it bring and ways to overtake them.

Eventually, world turns to data-driven society. It is essential to know how to operate and use the data we produce.

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