The UK’s FinTech week recently came to a close. Wouldn’t it be nice if the deafening roar of digital transformation could pause a moment – so we can reflect on FinTech without falling behind? Ha! Not a chance.
The pace of change was palpable when Financial Services business leaders, government and media converged for the fourth Innovate Finance Global Summit – particularly when framed by the spectacular backdrop of Guildhall, a medieval monument of power.
The panel discussion ‘AI Innovation in Focus: Competitive Edge, Governance, Ethics and Regulation’ provided a broad international view on a heavy-weight topic. Manoj Saxena, CEO Executive Chairman of Cognitive Scale* kicked off the session with an impassioned keynote, calling for businesses to use a human-first approach to AI developments. Likening its power to a series of ‘Hiroshima bombs’ he believes that it needs to be regulated coalition style – he wants nuclear treatment.
With the world on their shoulders, the panel progressed with a lively discussion on what defines ethics and how regulation should be approached. Stuart Sherman, CEO of IMC, suggested that governments are slow-moving, and that business leaders under existential pressure to stay on top of AI ethics should self-police. Great, but what do we mean by ethics anyway? Sherman suggests our station in life defines our ethical values. Alas, this is not a ‘one size fits all’ issue – there is no easy solution.
Providing an Asian perspective, Dr Jian Guang Shen, Vice President and Chief Economist, JD Digits shed light on sentiment in China. Debate over whether to follow EU laws like GDPR – which can be perceived as too strict – is ongoing. He emphasised the trade-off when it comes to competition and regulation, using the difference between the UK and China as a case in point. He believes regulation should not come from government, but businesses themselves.
That is the important, macro view on AI. Any business regardless of industry must navigate these issues in order to steer the course of digital transformation in a manner that focuses on the betterment of society and is protective of citizen data. Ultimately, poorly guided decisions on AI applications could result in reputational damage, so I hope you are keeping up…
That is all great, but what does this really mean for Financial Services? What is this so-called hype and how is AI ‘getting real’? We all know the hype narratives by now, if you are not on board you might get dragged overboard – so jump on it quick! No, really. Don’t. The key message from the ‘AI in Practice: The A to Z of AI Applications in Financial Services’ panel discussion was to make the most of your own business data: ensure it is prepped and structured properly, remember the simpler applications are often best and always start with your true business needs.
So, what can AI actually do? Firstly, it can be intuitive, but it requires fresh data to take it beyond the usual demographic assumptions that pigeon-hole end-customers. We know that Prince Charles and the Prince of Darkness Ozzy Osbourne are very different people, but this is not automatically understood byan algorithm that is fed basic demographic data. Combine intuitive AI with the trend towards frictionless customer services, where form filling is no more and entire transactions and interactions take place on messenger platforms – and we have Intuitive Bots. A banking bot would certainly make life easier, don’t you think?
Seeing is believing. At the summit’s closing Pitch360 event, 24 start-ups competed ‘Dragon’s Den’ style with 3-minute pitches on their products and business, across a range of categories from FinTech for Good to Personal Finance and Robo-Advice. Meltwater* pitched its AI enhanced search engine designed to uncover missed investor opportunities and enhance decision making, while Ethecal* pitched its platform built on blockchain, which provides a one-stop money management system for fairer access to credit. However, it was Novastone* that stole the show and won the overall award. Its client messenger platform aims to make client interactions frictionless, focusing on ‘conversations not form filling’. Sound familiar?
The breadth of applications within the Financial Services industry for innovative solutions like AI are pretty exciting and varied. They are also not exclusive to London, with similar events taking place across Manchester, Leeds and Edinburgh. FinTech North and FinTech Scotland – established to champion hubs outside of the London sector – announced that they will join forces to form a national network, seeding innovation throughout the country. FinTech is not new, but it does feel like we are only just getting started.
How we communicate this progress is vital. In order to get the best out of AI in Financial Services, for example, goals and expectations need to be measured with neutral narratives. It is a complex technology currently shrouded in myth and once we fully understand it – from the c-suite to the customer – we will be able to truly apply it in ways that will better our lives. All those in favour, say AI.