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Mobile Opinion

Besides Blockchain, Technologies That Are Still Reshaping the Banking Industry

Jan 7,2019 / By / No Comments

Over the years, financial institutions have evolved with and as a result of the current economic, political, and social forces at play. Legal and regulatory reforms matured, and the technology behind the banking world became more sophisticated. According to a recent study by Ernst & Young – “while the recent financial crisis and resulting regulatory reforms continue to play an important role in reshaping the structure and operating models of banks and markets more broadly, technology-driven innovation will lead to much broader, deeper and more rapid transformations in future years.”

Further a Fujitsu survey entitled “Transforming Britain Report” highlighted sentiments from over 2,000 individuals (including roughly 650 business leaders from various industries) that roughly 50% of finance industry leaders are convinced banks won’t be recognizable from their current format in 10 years.

As in most industries in 2018, digital transformation is forever altering the landscape of banking. While blockchain is certainly the most talked-about technology that experts have predicted will reshape this industry, other technologies such as wearables, machine learning and AI, and robo-advisors are creating a new age of digital banking for banks and clients alike.

As of July 2018, 3.2 billion people globally have access to the internet. Researchers estimate that over 50 billion devices will be connected to the internet by 2020.

Disruption is occurring at every level in the banking industry, from faster, more transparent customer service to back-end operations and inventory management. From new technology to new competition to heightened customer expectations, incumbent banks have become increasingly vulnerable to outside pressures. Prudent banks are spearheading digital ecosystems for more nuanced customer engagement and forward-looking technology in order to maintain strong client relationships and retain their competitive advantage.

Overview

Below, we explore how innovative technologies (apart from blockchain) are leading to digital transformation in the banking industry, with customer-centric solutions front and centre.

  • Artificial Intelligence & Machine Learning
  • Chatbots, Robo-advisors, & Voice Assistants
  • Big Data & Analytics
  • Internet of Things & Wearables

While these technologies are in different stages of development and adoption, they have varying and increasing degrees of potential to drastically transform how clients bank in the next decade. And with nearly 75% of consumers banking digitally, banks and financial institutions that haven’t adopted future-proofing technology strategies will find themselves obsolete.

Artificial Intelligence & Machine Learning

Artificial Intelligence (AI) is defined as technology that learns as it researches and analyzes good data. It’s currently being used in the financial and banking industries in areas such as risk and compliance management to better predict and make decisions “beyond human scale”.

Machine Learning (ML) “automates analytical model building, enabling computers to learn without explicit programming when exposed to new data.” ML technology can occur both supervised (using historical data) and unsupervised (finding patterns) to predict future events and to detect fraud, respectively.

Several notable financial institutions have implemented AI and ML technology to ensure they can streamline menial tasks and allow more time to help clients with a more bespoke approach to their finances.

For example, the AI assistant from RBC, NOMI (“know-me”), has over 3.6 million customers and facilitated a two-thirds increase in mobile app usage and a 20% increase in new savings accounts being opened in only eight months after launch. Discount Bank’s DiDi (“Discount Digital”) offers personalized advice and financial management services, along with suggestions to automate transfers of funds to maximize savings goals and to reduce costly transactions in the future (ie: unnecessary banking fees).

Artificial Intelligence

FINRA is testing new ML software to detect typical patterns and use a wide net to catch situations that merit a flag for suspicious activity before humans do, by learning which repeated scenarios have raised flags in the past due to legal action.

While many large banks recognize that banking is not a one-size-fits-all approach, using AI to automate tasks and ML to provide more accurate, up-to-date information about clients helps bank staff create a more nuanced approach to their clients’ financial questions and issues.

Robo-advisors, Chatbots & Voice Assistants

Nearly 4 billion people use at least one messaging app, such as Facebook Messenger or Whatsapp to communicate with their peers and businesses around the world. Banks can reach clients with chatbots or robo-advisors to engage clients ranging from Millennials to Boomers through platforms “like Facebook Messenger and Whatsapp without extending business logic.”

Chatbots & Voice Assistants

With technology in voice assistance and natural language processing (NLP) advancing at a rapid pace, banks can harness chatbots in messaging apps to deliver advice, assessments, and customer support in an environment rich with a user base that is already familiar with the technology.

Today’s technology can analyze and determine the nuances of our voices to grant us access to our bank accounts, and several large financial institutions have deployed speech analytics software to enhance sales personalizations, customer service processes, and regulatory compliance requirements.

Credit Suisse has offered individual clients and legal entities a completely digital onboarding experience since 2017, providing a convenient method to attain new clients. Since the launch of this Online Relationship Onboarding program (or ORO, for short), Credit Suisse has seen a 65% reduction in the number of data entry errors that typically plague bank employees during a conventional onboarding process.

Erica, the chatbot behind the Bank of America, helps customers through a variety of tasks, from showing the progress for financial milestones to helping track unnecessary payments and fees that could reduce the drain of their resources. The typical use case shared by Bank of America shows Erica sending a predictive text that outlines how a client might reduce their annual fees while also reducing their credit card balance: “Based on your typical monthly spending, you have an additional $150 you can be putting towards your cash rewards Visa. This can save you up to $300 per year,” she writes.

Chatbots in messaging apps

Image source

Technology like Erica offers clients much greater control over their finances and the sense of security knowing their bank is working diligently to anticipate and meet their needs.

While banking can be frustrating for many people, if technology is used intuitively, banks can leverage chatbots and robo-advisors to reduce errors and simplify signups and transactions for clients, freeing up valuable time and solidifying client relationships.

Big Data & Analytics

Big data enables “the sourcing, aggregation and analysis of large amounts of data,” while analytics is “the discovery, interpretation and communication of meaningful patterns within data,” giving banks the power to predict future trends and evolving client needs, and subsequently offer actionable items for areas such as risk management and personal goal tracking.

Based on research from IDC, over $20 billion was invested into Big Data in banking in 2016 alone; the amount of data created each second is predicted to increase 700% by 2020, with banking and financial data dominating that increase.

Big Data & Analytics

Today’s advanced data analytics tools harness valuable data related to customer spending habits, personal goals, and general financial activity. Digital strategies should not be focused on new UI, but rather on transforming how quickly and efficiently customers can be reached. Advanced Big Data and Analytics tools offer banks access to new customers and greater visibility into their behavior, to be able to predict future financial patterns and to suggest suitable products for their customers.

Programs such as GDPR (General Data Protection Regulation) are at present viewed rather negatively by Tier One and Tier Two banks because they are seen as restrictive and a barrier to be overcome in order to do business effectively. However, banks can and should see these regulations as a way to become a leader in the governance of their clients’ data and privacy.

GDPR compliance offers banks an opportunity to reform their data collection and storage systems, not only giving their teams a better understanding of the flow of data throughout the organization, but also instilling confidence in clients that their data is secure. Build your bank’s ecosystem and infrastructure around the needs of your clients, using what data they share with you to create a nuanced, tailored solution to their needs.

Internet of Things & Wearables

The Internet of Things (IoT) is a network of physical devices connected to one another through the Internet in order to collect, send, and share data across the web with people and other devices. IoT offers greater connectivity to the existing data being shared by clients and other industries, and creates more opportunities to use that information to improve and enhance their internal processes and external exchanges with clients and third-party vendors.

Also referred to as the Internet of Everything, IoT is the intersection of the physical and virtual worlds to allow people and technology work more seamlessly. While IoT is still in its infancy within banking, early adopters will focus on applying it to digital product enhancements and harnessing its capabilities for financial services to other industries (such as mobile payments).

Internet of Things & Wearables

Much like IoT, wearables have become commonplace in daily activities, supporting users as they search, process, and utilize data when and where they need it. The best example of wearable technology is smartwatches that connect to a user’s mobile phone, transmitting data in an easy-to-digest format. Through banking apps, clients can access their account data using a series of voice commands or simple clicks.

Australian bank Consumer Bank launched its own version of wearable tech PayWear through the Westpac Group in 2017, allowing users to arrange payments, alerts, and other account options hands-free and on the go. PayWear was developed after Apple banned a keyboard function which would have allowed users to pay through Facebook Messenger or Whatsapp. bPay in the UK allows users to pay for anything under 30£ using something as simple as a fob or a sticker at select retailers.

Summary

Banking leaders that prioritize a digital-first strategy to carry them into the next decade with a clear path to customer-centric solutions understand that embracing technology won’t make banks redundant. Implementing the right technology offers security, more personal interactions with clients, and more intelligence for issues that arise. With financial markets in turmoil as we near the end of 2018 and consumers losing confidence in large financial institutions, banks need to prioritize client relations now more than ever…and technology can help tremendously.

“The whole notion of customer experience for banks is so, so critical right now,” said Daniel Latimore, Senior Vice President of Celent. “They have challenges like security and being bulletproof — but consumers don’t care about all the constraints. They just know they can get great experiences elsewhere and they want it from their bank too.”

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Blockchain Healthcare

How blockchain technology is transforming the healthcare industry

Dec 6,2018 / By / No Comments

In 2017, there was a nationwide crackdown in the U.S. on healthcare fraud, in which around 412 healthcare professionals were arrested for doing fraudulent transactions worth $1.3 billion. According to a global study conducted by IBM and Ponemon Institute, in 2017, the healthcare industry was a major sufferer of such incidents, with the highest toll in terms of the cost of breaches, the cost of breaches in healthcare was 2.5 times the global average when compared to other industries.

These issues have brought the entire world face to face with the glaring need of a secure healthcare infrastructure. While the healthcare industry has made advancements in areas pertaining to research, diagnosis and even efficient cure, it is at the back seat when it comes to creating a secure, unified healthcare system.

Challenges of the healthcare sector that blockchain technology can address of the current challenges that healthcare industry faces are:

  • Prevalent conventional Data collection, lack of a secured infrastructure which can allow a fast interoperability of transactions between various data points
  • Accessibility to PHI (protected health information) sets limit progress in research.
  • Data privacy and Data security

Let’s dig deeper. One of the major setbacks that the healthcare industry faces is the scattered patient data across channels, departments and systems. This prevents from crucial data to be accessible when needed. With multiple players and abrupt processes current healthcare system isn’t unified. Moreover, data security breaches also bring to light the inadequacy of the system in handling the exchange of information securely.

All of this is preventing healthcare organizations from delivering appropriate patient care and high-quality services. Let’s look at some statistics :

  • Nearly half of clinical trials in the US are unreported
  • Up to 40% of healthcare provider data records are filled up with errors or misleading information
  • Healthcare data breaches in organizations are estimated to cost around $380 per record in the current times. 2.5 times the global average when compared to other industries.

Outdated systems for keeping patient records is a major issue. These systems hold local records of the patient data at multiple touch points. This scattered availability of abrupt data can make the diagnosis difficult and time-consuming for the doctors, and tedious for patients. A lot of new-age technologies are helping the industry in dealing with and minimizing these challenges and blockchain is one of the promising ones amongst them.

As stated by BCG, healthcare experts are looking to blockchain as a possible solution for some of these critical issues that the healthcare industry in facing. They predict :

  • Blockchain can pave way for powerful new capabilities and a potentially massive disruption of current approaches to services, care, and accountability.
  • Blockchain has the potential to speed up and improve R&D, care delivery, and care management, and to reduce costs.

What is blockchain technology?

Blockchain technology, is a distributed ledger based system where the information is stored in a distributed ledgers and can be accessed with a key, which makes the data immutable. The cryptographic and multi-participant validation system of blockchain makes it one of the technologies that various industries look forward to in terms of data security.

While the major use cases of blockchain technology has been talked about in the financial services other industries are also exploring the possibility of deploying blockchain to increase efficiency and security, and healthcare could soon be reaping the benefits of this technology in full scale.

The three basic principles on which blockchain technology is based on can help in overcoming the above-mentioned challenges. These three principles are:

Private key cryptography — Use of a secure and private key is as a variable along with an algorithm to encrypt and decrypt the code. While the algorithm is open the key is not revealed and is secret. Creating a reference of the secure digital identity, while the transactions are on the open network.

Distributed ledgers — A distributed ledger is referred to as a network of shared records. This ledger is updated in real time and the authority is decentralized, where network of participants keep the ledger updated. Any changes made in the ledgers reflects in the network in almost real time.

Authentication — In a Blockchain, all the transactions are authenticated before getting added to the chain. The algorithms used in blockchain validate and verify all the transactions. After the encryption, this information is digitally signed and stored post which its authenticity is sealed.

Applications of blockchain in healthcare

Here is how blockchain technology can reshape various aspects of the healthcare ecosystem to create a more secure and efficient system.

1. Solving for interoperability in healthcare ecosystem for EMR, EHR, and PHR data

Blockchain can help healthcare providers in creating the next-generation system coupling health data with decentralized, distributed, and immutable qualities. According to IDC, Blockchain’s interoperability could underpin data exchange, serving as an alternative to today’s health information exchanges (HIEs); essentially, it would act as a network for transmitting secure, real-time patient data for healthcare providers, including the pharmacies, insurance enterprises and clinical researchers.

Booz Allen recently helped the US Food and Drug Administration’s Office of Translational Sciences to develop and implement blockchain technology based data sharing solutions. It eased the process of identifying safety signals in FDA and non-FDA safety report databases for the FDA.

LA based start-up Gem uses blockchain technology to address the trade-off between personalized care and operational costs by connecting the healthcare ecosystem to universal infrastructure. They create global identifiers to link together data belonging to a person or asset. It eliminates time consuming reconciliation, providing real-time transparency, reducing risk and creating better outcomes.

Gem health blockchain model

2. Securing supply chain

Blockchain technology can be used to reshape the supply chains across the healthcare sector. Transactions on blockchain are recorded in a chronological, unalterable, validated ledger through which blockchain can help supply chain vendors in healthcare like pharma and medtech enterprises track the journey of raw materials, compounds, or components at individual step of the supply chain, from the source to company facilities to the consumer or patient.

As the supplier logs in information into a blockchain ledger, the data can be accessed by the stakeholders, where they can validate and identify counterfeit materials, malfunctions, or environmental breakdowns thus confirming a tamper-free cold chain.

The MediLedger Project, backed by pharma giants like Genentech and Pfizer, has piloted a program using blockchain tools provided by Chronicled, a US-based startup, to track medicines.

Modum.io combines sensors and blockchain technology to monitor products requiring cold-chain handling to improve pharma supply-chain efficiency. BlockVerify tracks QR codes on packaging on a blockchain (for pharmaceuticals, precious stones, electronics, and luxury items), to authenticate products.

3. Giving patients control of their data

Blockchain technology can enable patients to take control of their data. Technology has made it possible to record nearly all the medical data of a patient. Each of the transactions can be maintained on a blockchain record, which could enable patients to maintain a complete audit trail of every doctor, provider, payer, medical device, health information exchange (HIE), or any person or entity that has had access to their data.

This access will also give patients diagnosis and treatment related benefits. It will also help in maintaining data security in case patients inadvertently share, or companies gain access to, more data than is desired or intended.

Some enterprises are already working in this direction. For e.g. Google’s DeepMind, is working with Britain’s National Health Service (NHS) on developing a blockchain distributed within a closed network of participants to create robust audit trails that track exactly what happens to personal data. The objective is to enable the NHS and also patients to track personal data access and use in real time.

MIT Media Lab has developed MedRec, which is a decentralized record management system for EMRs (Electronic Medical Records) that uses blockchain technology to manage authentication, confidentiality, accountability, and data sharing. MedRec is the combination of a social need with a technological enabler: a system that prioritizes patient agency, giving a transparent and accessible view of medical history.

4. Point-of-care genomics management

Point-of-care tests are defined as “medical diagnostic tests”, performed at or near the site of patient care. These tests support clinical decision making by delivering results in real time (usually in less than 90 minutes). Most available POC genomic devices provide limited results indicating the presence or absence of a certain pathogen or antimicrobial resistance gene. NorthShore University HealthSystem has built a digital platform called Flype that delivers genomic data to providers at the point of care. It is an informatics platform that allows the organization to securely accept data from multiple sources, send orders to a variety of destinations, and perform secondary analysis and annotation of genomic data.

During the pandemic, the platform has been able to translate data as well as lab and diagnostic tests across systems – including COVID-19 test results.

Nebula, a Miami based organization, uses Blockchain technology to offer users permanent ownership of their genomic data on a publicly-readable ledger.

5. GDPR and HIPAA compliance

FDA states for electronic data exchange -’ 21 CFR Part 1’1 needs to be followed. It is mandatory for healthcare enterprises to be HIPAA compliant in the U.S. and GDPR compliant when it comes to dealing with patients based out of Europe.

The HIPAA Privacy Rule and the HIPAA Security rule, establish national standards for the protection of certain health information. HIPAA Security Rule, are national set of security standards, that protect certain health information held or transferred in electronic form. The Security Rule operationalizes the protections contained in the Privacy Rule by addressing the technical and non-technical safeguards.

According to GDPR – the definition of of personal data covers any information associated with an “identified or identifiable natural person,” including computer IP addresses, photos, credit card data and the like. Further, GDPR gives the patient the right to erasure, which implies that a patient can choose to have their data erased from the records of the enterprise.

Both HIPAA and GDPR strengthen the security requirements to ensure protection of patient’s data by implementing pseudonymization and redundancy, along with routine pen testing and intrusion detection measures. And, under both the rules, organizations will need a continuous process to evaluate its security measures. Blockchain allows a creation of immutable environment which is auditable and security friendly.

6. Smart contracts and automation of manual processes

As stated earlier in the article, one of the major issues that the healthcare sector faces is interoperability, and the outdated healthcare repositories is a critical aspect of that. Blockchain technology can be a solution for this issue by the means of ‘smart contracts’ – scripts that self-execute based on predetermined rules.

For instance, once a patient fills out paperwork at a physician’s clinic then, a few months later, say he goes to a different physician or a specialist, a smart contract could automate the transfer of patient data based on pre-set rules that the patient could control.

According to Mutaz Shegewi, IDC’s research director for provider IT transformation strategies,

“One big pain point for providers and payers is preauthorization and availability checks – running processes to ensure a patient is eligible for a care option or treatment or intervention”.

Blockchain enabled smart contracts can with predetermined rules can help in automating the process, make it error free and efficient. Further, these smart contracts can also help in fastening the payment process and reduce any point of contention between patients, healthcare provider and insurance agencies due to a single source and standardization of the transaction data between the three parties.

7. Accelerating R&D

Research and development is one of the major disciplines in healthcare. With not just healthcare enterprises but technology giants also entering this area, investments in R&D has seen an upward trend in the past few years and the sector is poised to become largest R&D-spending industry by 2020. Blockchain technology can help in streamlining the R&D processes, make it more cost effective and boost innovation. Here is how it can help achieving all of this –

  • Blockchain technology can automate the validation, coordination and maintenance of adherence to trial protocols by pharma and medtech companies.
  • It can ease the process of recruitment where patients or volunteers can self-identify and enroll for trials and the system can automatically assess and verify their eligibility.
  • Data gathering process of researchers can be made easy and error free. Since blockchain technology can help store all data in a consistent, accessible infrastructure in which patients grant access to others by sharing public and private keys; the clinical data gathered will be reliable and verified.

All of the above can enable faster and cost-efficient completion of trials through more efficient patient recruitment and data sharing across multiple sites, decreased preprocessing of data, and faster regulatory approvals. Academic institutions across the globe pharmaceutical enterprises are exploring ways to realize this potential. For example, researchers at MIT are developing the OPAL/Enigma platform, which enables parties to jointly store and analyze data with complete privacy.

Some blockchain companies reviving healthcare industry capabilities

#1 Akiri: Akiri operates on a network-as-a-service model specifically for the healthcare industry. It helps protect patient health data when transporting it. Akiri ensures that healthcare data remain secured and shareable only with authorized parties.

#2 Guardtime: Guardtime is helping healthcare companies and governments implement blockchain into their cybersecurity methods. It has recently partnered with Verizon Enterprise Solutions to deploy several platforms based on Guardtime’s Keyless Signature Infrastructure (KSI) Blockchain.

#3 Avaneer: Avaneer uses blockchain technology to improve healthcare efficiency by utilizing a public ledger to support better claims processing, secure healthcare data exchanges, and keep provider directories maintained and up-to-date.

#4 Robomed: Robomed provides a combination of AI and blockchain to offer patients a single point of care. It uses chatbots, wearable diagnostic tools and telemedicine sessions to collect patient information and share it with the patient’s medical team.

#5 Embleema: Embleema is a virtual trial and regulatory analytics platform that uses blockchain to fast track drug development. It stores secure, untampered data of users in Embleema’s blockchain and then analyzes the data.

A blockchain enabled future of healthcare

According to a recent article by IDC, investments in blockchain remain stable in Europe even a year after the pandemic. From a technology perspective, IT services and business services (combined) will account for more than 65% of all blockchain spending in 2021, increasing their share throughout the forecast.

However, there is still a massive 80% who won’t be leveraging the technology. The prima facie reason for this is that the technology in itself is at a nascent stage and its potential has been seen only in the BFSI sector thus far. Other industries, will take some time to warm up to the technology. Like any other new technology blockchain also comes with its fair share of challenges which will impede its deployment. According to a PwC research, some of these are:

  • Lack of trust and uncertainty about the technology – 47% of healthcare of companies say lack of trust a barrier to implementing blockchain and 39% feel regulatory uncertainty is limiting its adoption.
  • 61% of blockchain projects challenged by lack of blockchain expertise.
  • 31% of healthcare companies say cost of deployment is also a major roadblock to adoption of blockchain technology.

While there are obvious challenges while it comes to leveraging blockchain in healthcare, now. The Industry does realises the potential it has in reshaping and changing the redundant and outdated processes. For the very same reason, it is expected that by 2025, blockchain in healthcare will grow over $5.61 billion and researchers project that 55 percent of healthcare applications will have adopted blockchain for commercial deployment.

For the healthcare industry, while the perfect application of blockchain seems futuristic, conversation around its potential and deployment at certain primary levels like creating smart contracts, should happen now to reap the benefits of blockchain in the near future.

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Mobile Opinion

5 Key Takeaways from LendIt Fintech 2018

Apr 17,2018 / By / No Comments

Last week’s LendIt Fintech event was a great gathering of Banking, Fintech and Lending professionals from across the globe.

Industry experts covered everything from the future of the banking industry in a digital age, to blockchain and the application of AI and machine learning in the financial services domain.

Here is a roundup of some of my key takeaways from the event:

Banking in a post-digital age – being always present for the always-on customer

The banking and the financial services industry is going through a pivotal time. The most critical reason is the changing digital preferences of the always-on customer. Owing to the changing customer preferences and innovations happening in the industry, financial enterprises and banks are compelled to re-imagine the conventional way of connecting with their customers.

Digital is where today’s generation spend a vast majority of their day and the vast majority of their time. An average adult spends about 4 hours a day on the digital platform, checking their smartphone 150 times a day. And, smartphones are not the only connected devices customers are present on – there are wearables, smart speakers, smart cars, smart TVs and the list goes on. It is expected that by 2020 there will be 30 billion connected devices. It is no longer about being present on the digital medium; it is about building a personal relationship with the customers.

As Avid Modjtabai, of Wells Fargo, points out in her talk:

‘It is about developing a profound level of insight into every customer and connecting with them when and where they need us — with experiences that make a difference in their lives.’

Today’s customers share a great deal of information about themselves with enterprises, with the trust that these enterprises will manage and leverage this data to make their lives simpler. This gives enterprises the opportunity to go beyond the transactional relationship with their customers and make it personal.

Banks have to make sure that they are innovating at the same pace as their customers see in other walks of life.

Here are the few ways banks can achieve this:

 

Image source: Lendit.com

Smarter Data

Enterprises have access to over 375 petabytes of data on customers’ behaviour and preferences. To put that into context, one petabyte can store the DNA information of the entire US population and clone it two times over.

With bigdata, we can make this data work and work harder on behalf of the customers.

According to PwC – 46% of the banking customers are digital-only. This is a huge opportunity for the industry to deliver a contextualized, hyper-personalized experience at the moment wherever they are.

In the future data and AI together can:

  • Enable customers to manage their money with just voice.
  • Give intuitive tips that would help customers plan their finances.
  • Help in underwriting and fraud management.
  • Look at the cash flow patterns of customers and give relevant in-the-moment insights.

Next-Gen ID management

Customers trust banks to secure their assets. Identity management is a core component to manage that trust. With customers linking their IDs and financial accounts to a lot more apps and devices, ID management has become more and more complicated and important.

There are about 60 records that are lost or stolen every second, and that adds up to a humongous 5 million records every day.

With a growing number of security and identity breaches, it has become essential for banks to verify every customer at each and every interaction. Today, financial institutions are moving away from knowledge-based authentication to more advanced processes like biometrics, geolocation tracking, device finding technologies, leveraging AI to look at patterns, etc. This combination of technology is making the process much simpler and secure for customers.

Frictionless payments

Technology has transformed the commerce and transactions landscape. Today consumers want their transactions to be integrated and seamless and expect the payments’ process to be done in the least possible steps.

Technology has reinvented commerce. For instance, in Sweden, cash accounts for only 2 percent of all the payments and half of Swedish bank branches are cashless today.

It is imperative for industries to develop simpler and fast-moving money movement capabilities and experiences. Banks have the capability of being pioneers in this area, and some are raising the bar higher, e.g. Zelle P2P payments from Wells Fargo, helps customers transfer money between participating bank accounts in real time.

Transcending channels

Today customers are always connected, and they expect that from enterprises they deal with as well. Customers want to talk to their banks in the moment of their need – this model is changing the way financial institutions have been thinking about channel and distribution.

Also, banks have to make sure that they are not just available when the customers need them; they also give the customers the choice of communicating with them in the way they wanted, e.g., Apple announced Apple business chat with Wells Fargo. It enables customers to chat with their banks through the same messaging app in which they are talking with their friends and family.

Fintech collaboration

Today technology is not just an enabler but is a differentiator for enterprises across industries. And, hence Fintech collaboration is becoming increasingly important for banks. In the coming years, most product innovations will come from fintechs and banks working together.

Finding the right ‘Product Market Fit’ in Fintech is important:

In this digital era, Fintech is more about the ‘Fin’ and less about the ‘Tech’. A lot of financial enterprises build products with ancient infrastructure with a thin layer of UI on it. It is important to find out the right Product Market Fit in Fintech. Instead of looking for a market first, enterprises should aim at finding out the problem that they are going to solve, build a great product around it and then focus on consumers where the product is a right fit.

Here are few tips from Andy Rachleff, co-founder and executive chairman of Wealthfront, to make sure that you find the right Product-Market-Fit:

Understand the What, Who and How before building a product

Three crucial pillars of building a great technology product are finding the answers to these three aspects:

  • What – what are you going to build?
  • Who – for whom is it relevant?
  • How – what is the business model?

Most enterprises do not realize that they shouldn’t iterate on the ‘What’ too much. It is essential for entrepreneurs to identify an inflection point in technology and build a great product around it and then identify the market that needs the product.

Be unconventional

Trying to do better what someone else does is a path to mediocrity. In a technology-led industry, it is important that enterprises innovate and create differentiation for themselves.

Customer delight is the greatest form of advertising

In the journey of product-market fit, paid advertising and customer acquisition can mislead enterprises into thinking that their products are doing well when in reality they aren’t. Further, advertising is a fixed cost, and for small and medium-sized enterprises it means investing in that fixed cost hoping that the market is big enough to take care of that fixed cost. Enterprises should aim at exponential and organic customer growth and invest in infrastructure and build a robust technology first. A great product will delight customers, and that will ensure word of mouth and organic growth of customers.

Not every product idea will work

It is important for enterprises to realize that not every product idea works, some of them are bound to fail. However, it is critical to identify the ones that work and doing all that you can to make those successful.

Bitcoin and cryptocurrency – a vision for the future

In January 2009, the Bitcoin network came into existence with the release of the first open source Bitcoin client and the issuance of the first Bitcoins, with Satoshi Nakamoto. Since then, the number of businesses accepting Bitcoin continues to increase, and along with it, the industry expectations on the currency continue to be bullish. In fact, even the Mt. Gox fraud of Bitcoins, led to just a drop of 15% in the value of the currency.

How Bitcoin will change the future of banking

The transactions that happen beyond the medium of the banks mostly remain unbanked. Bitcoins can help in bridging this gap and make the unbanked transactions a part of the real economy. Further, Bitcoins help the movement of the currencies easily from one country to another without the need to convert it. Also, it is easier to catch fraud if a transaction is happening via Bitcoins.

Governments across the globe will recognize Bitcoins’ potential

There are a lot of regulatory issues around Bitcoin as of now. However, in the coming few years governments will make it easier for the people to deal with Bitcoins since governments compete for money, entrepreneurs and people, e.g. South Korea made Bitcoins illegal and then they realized that 40 percent of their population already has a Bitcoin wallet, so they had to ease out their regulations. Since the regulatory requirements are not so stringent in the developing economies, they are a potential market for Bitcoins.

Bitcoins will be the new normal

While established financial and payment enterprises aren’t supporting Bitcoins since they already have an established system, companies like Coinbase will become the banks of the future.

Applying AI and Machine Learning to Financial Services Using the Google Cloud

In 2010, Deepmind a start-up created a neural network that learns how to play video games in a fashion similar to that of humans and Neural Turing machine.

Google foresaw how neural networking and AI would change the future of technology forever and acquired the company in 2014.  They started experimenting with this technology and reinvented how Google works internally.  Initially, Deep Learning was used in image recognition through Google photos. In 2015, the technology advanced to not just recognize the targeted image but also the environment (or pixels) around it and further change it.

Deep Learning

Applying AI and Machine Learning

Image Recognition

Image Recognition

Image source: Lendit.com

In the coming years, the technology was used for reading and writing through an auto response to Gmail and voice recognition.Today Google is using AI and Machine Learning to identify user behavior patterns and give output accordingly on Google’s ad network.

User Behaviour Patterns

Image source: Lendit.com

How AI and Machine Learning can change the financial services landscape

Machine Learning can ingest a humungous amount of customer data, structure it, process it and convert it into tensors. These tensors can be then used to train a machine learning system and deliver customized results.

How AI and Machine Learning can change the financial services landscape

Image source: Lendit.com

Financial services can use these techniques of Machine learning and AI to

  • Analyze their customer lifetime value (CLV) better.
  • Define where enterprises can target campaigns to engage most with their customer set.
  • Prioritize customer interaction based on the CLV.
  • Build more efficient processes by using the technology see and fill forms; and also work on quality assurance processes.
  • Read documents and analyze compliance with documents.
  • Listen and speak to customers and shorten the time from enquiry to resolution.

The emergence of the Internet of Value

The Fintech space is evolving very fast. With technologies like blockchain coming up, the fundamental shift that is expected to happen in the coming few years is the emergence of Internet of Value.

This means that financial assets and money will start moving as efficiently as data has been moving in the last 25 years.

The biggest change that blockchain will bring is the complete inter-operability between all the money, systems and the ledgers of the world.

Correspondent banking will dissolve

Today, if someone wants to transfer money across the globe, they have limitations of taxes and time. This issue becomes more prominent when the transaction amount is smaller. Technologies like blockchain will bridge this gap.

Interoperability of data will fasten the pace of globalization

There are three main keys to achieving true Globalization

  • Interoperability of data
  • Interoperability of good
  • Interoperability of money

While we have been able to achieve the first two, we are still lagging behind when it comes to interoperability of money. Blockchain will help in achieving this. The interoperability of money will also be followed by the emergence of IoP or Inter ledger protocol, which is IP or standardization process for ledgers.

Convergence of technologies will make Fintech simpler

The number of smartphone users has been rising and will continue to grow in the coming years. According to the World Bank, in the coming few years every adult in the world will have a digital bank account on their smartphone.

Today, there is the technology and the device, however finding out a link that will wire all of this together is missing. In the coming years, the Fintech industry will figure that out through the interoperability of monies.

Regulators are supporting systems that make sense

Governments across the globe are working towards inclusion of the people and developing economies which are not connected to the world economy today. Digital currencies and enabling regulations by these governments will help in achieving that. Most payments will be machine to machine once the interoperability and developing world problem is solved.

Data security and privacy will be of utmost importance

As the demand for digital assets grows, governments will also make sure that data privacy issues are addressed. New and stringent laws will be introduced. California consumer privacy act is coming out this year and EU GDPR privacy laws etc. are some steps in this direction. We are in the best of Fintech regulatory environment right now.

Currencies will have more use cases and will be more liquid

ICOs are problematic because currencies need to be as liquid as possible and have as many use cases as possible.That will drive value and utility. The early beta of this is cross-border payments but this is just the beginning, and we will see more such use cases of currencies coming up.

Conclusion

The banking and the financial services is at a turning point right now. This year’s LendIt conference gave us a detailed view of the future the industry is moving towards. With changing customer behaviour, technology advances and innovations there lies exciting times for the industry ahead.

You can find more about the event here.

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