Meet Fintech innovators using AI to reinvent the financial industry

The world of finance, as we know it, is changing. From new currencies to new business opportunities, innovation has been unlocked with one key: artificial intelligence. Almost all new money management approaches have AI in their DNA.

Globally, the AI ​​financial technology (fintech) market is expected to reach $ 22.6 billion by 2025.

AI is the key to fundamentally changing the way people interact with and use money. Because currency is used every day and impacts all markets and industries, the impact of financial innovation via AI cannot be underestimated.

There are two key points: The world of finance is becoming more and more user-centric, but every fintech company faces a major threat.

The digitization and decentralization of finance

The main ways fintech has become user-centric are digitization and decentralization. If you haven’t seen an online statement or used contactless payment to checkout, you should understand that finances are now digitized. The entire cryptocurrency industry is one of the least concrete systems imaginable, and its products are certainly intangible.

This reality has changed some forms of financial transactions. The digital nature of finance means that some power is taken away from large banking institutions and given it directly to people. Even historically interactive financial transactions, such as stock trading, have been removed from several stages of a portfolio holder. Now, however, a simple app can give a trader full access to their holdings and the autonomy to do whatever they want with them.

An illustration: price prediction games for cryptocurrencies

A good illustration of user orientation in commerce is in business YOLOrekt. Funded in February, YOLOrekt takes advantage of gamification by offering price predictions (mostly smart games) in three-minute cycles. They are kicking off the second round of their platform with prizes for ETH, WBTC, Tesla, GameStop and others. Designed by degens for degens, this approach goes against the old-fashioned and painfully data-driven approach of traditional trading. It’s fun, it’s user-friendly, and it’s built on AI.

Co-founder Yogesh Srihari explains, “We were trying to create a cross-chain protocol, like other companies, but with a lot less capital. Other companies had raised hundreds of millions of dollars, and we had less than a million.

“We realized, however, that these companies don’t have adoption, even after raising so much capital. We had to focus more on the user. Binary options and nadex were two cool things I did all the time. It basically gave me the idea of ​​how to take traditional options trading and play it.

AI fintech is characterized by this kind of start-up, and Srihari’s efforts are a good example of how a small idea can make a splash, as long as it’s what people really want.

The world as a whole has embraced both digitization and decentralization. People who play money games are the antithesis of the old school “wear a connection to the bank” mentality. But irreverent approaches and new platforms have a major problem. Fortunately, there is an AI solution for this.

Finance as a service + cutting edge AI tools

User-owned online financial services are great – until they are rife with fraud. Unfortunately, they are often: The Federal Trade Commission (FTC) reported 4.7 million incidents Identity theft, impostor scams and online shopping scams in 2020. This amounted to $ 3.3 billion in fraud losses. It’s good that the people have power, but what about their protection?

Financial services are clearly rife with fraud, and a business is meeting the challenge head on.

Fraud Prevention as a Service (FaaS)

We are all familiar with SaaS (software as a service), but Sardine.ai is here to epitomize a new term: Fraud Prevention as a Service, or FaaS. Sardine.ai is powered by AI and provides intelligence that detects fraudsters based on their intrinsic behavior.

Picture this: A fraudster has a stack of fraudulently obtained (i.e. stolen) credit cards. They are starting to use these cards to spend money online. The algorithm built by the Sardine.ai team can identify someone using real credit card numbers and information as a fraudster.

It does this by tracking everything: device, location, VPN, and even behavior. The latter comes down to a granular level: the system can measure how hesitant or distracted the behavior is, compare typing patterns to those of legitimate users, and observe how someone types or scrolls. In other words, it sees everything and is an effective line of defense against fraud. This one-of-a-kind platform, designed specifically for financial institutions, is a game-changer.

Most fintech startups are so preoccupied with fundraising that they overlook the real and current threat of fraud. In fact, the co-founder and CEO of Sardine.ai, Ranjan Soups, saw this firsthand: “I was leading data science and risk for CoinBase and leading financial crime for a UK based bank. In those two places, every time there was a new product or territory launch, there was fraud. In fact, an American launch was delayed for more than six months due to fraud.

“They have been careful and have been very careful, but the scammers are very diligent. They get on a waiting list years in advance, waiting to strike as soon as the fintech platform launches. We launched Sardine.ai to ensure that financial technology and crypto companies in launch or growth mode can operate successfully without fraud. “

All of these innovations expand the gateways to the entire financial industry, and most businesses around the world can be a part of it.

Every company is a FinTech company

Any financial organization that wants to stay relevant must transform itself into some sort of financial technology company. It means infusing technology into all aspects of the business to create a better, more streamlined customer experience. AI is just one technology that is part of the larger fintech movement: others include blockchain, robotic process automation, and big data analytics.

The financing of fintech companies is exploding. The COVID-19 pandemic has revived the market so much that some analysts are calling it the 2nd wave of fintech. To be competitive, traditional players must invest heavily in technology and human capital in order to prepare for success.

However, not all fintech companies are able to secure massive funding, but that doesn’t necessarily mean their ideas are worth less. Often, minority small business owners struggle to obtain financing due to systemic biases and lack of resources.

David Price is the CEO of the financial services company Business payment that level the playing field between large and small businesses by allowing small businesses to meet all the payment needs of their service providers, allowing small businesses to hire better service providers – than alone big companies could afford until now.

“When a business can afford a better recruiter, accountant, lawyer, management consultant or digital marketer, it quickly improves its business. More money comes in and / or goes out less, generally much more than the cost of the service. So the problem is just the cash flow, its timing. David Price went on to say “As Bizpay gives businesses more pay time, by only having one quarter to come each month, the cash flow or timing issue is resolved, so they can use that better. service provider and get those benefits. ”

This innovative service ensures a more democratic and even distribution of talent in the labor market and is one of the few stabilizing forces that thwarts the perpetuation of powerful and wealthy companies grabbing the best service providers as they have for decades. centuries.

It also provides a framework for how other B2B companies can help strengthen and protect the US small business market, which has never been more at risk than it is now.

Who is in? An era of innovation in AI in finance

Analysts Deloitte describe three traits common to AI pioneers in financial services, namely:

  1. Integrate AI into strategic plans, with a focus on organization-wide implementation
  2. Focus on applying AI to customer engagement opportunities and revenue
  3. Adopt a portfolio approach to acquire AI

AI is available and early adopters are ahead of the competition. It’s safe to say that the evolution of AI for fintech is less of a trend and more of a new state of reality. Innovation in the financial world will continue at a rapid pace, and it is exciting to think about where the financial sector will be in 5 or 10 years. One thing is clear, a range of new AI-powered technologies are beneficial to consumers and retail investors.

About Janet Young

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