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8 opportunities not to be missed by AI in the Fintech world

DIGITAL VENTURES December 08, 2016 2:19 AM


Despite the fact that digital data and information have been collected for decades, most of them are not well managed and not ready for data analytics. Such data and information are not yet optimized. That leaves a big room for Artificial Intelligence (AI) to grow its importance in all parts of the economy.

Matt Walters, the partner who invested in Mission VC that builds technology community and the Managing Director of runway Accelerator, granted us a chance to share with Digital Ventures Accelerator’s startup his view on opportunity and potential of AI in the Fintech world.

Why has AI been progressing quickly in the Fintech sector?

  • The world today is more ready to support AI, thanks to greater Internet access through devices (e.g. Internet of Things or IoT) and the social network. These are key “content creator” for AI.

  • For any business that needs to handle huge information, especially those collecting Big Data and unstructured information, AI is ideal.

  • AI analysis can lead to high efficiency work due to AI’s incredible capability in data analysis, calculation and summary.

  • AI not only provides you with greater capability in data processing, but also reduce your cost in data storage by 36% per year

These advantages have encouraged the use of AI in developing financial service industry. Many startup entrepreneurs have optimized the opportunity created by AI and generated multi-billion dollar business in the high-value Fintech market.

What’s AI’s opportunity in the Fintech sector?

  1. Predictive analytics

AI and Machine Learning have been deployed to forecast and search for future customers’ demand as well as customer behavior. For example, DataRobot, the provider of Machine Learning service to corporate customers, has helped its customers make accurate forecast in shorter time. Penny, for another example, helps customer monitor their income and expenses and providing personal finance coaching services.

  1. Market research and Sentiment Analysis

AI has the capability to analyze both structured and unstructured data. It can detect the trend that has influence on stock price fluctuation even before human notice. This is the social alpha that every business is searching for so as to become the market leader

  1. Financial Search/NPL

  • AI can search for financial information from various sources. AlphaSense, for example, is a financial search engine that collects financial information from over 1,000 researchers and 35,000 government bodies, including broker research and PR news releases.

  1. Systematic Investment

AI advancement has prompted people to pay more attention to Quantitative Trading. Many believe that computer will soon start a new way of trading that makes today’s super computer and complicated algorithm become obsolete, and perhaps brings the end to fund manager profession.

  1. Debt Monitoring

TrueAccord is an example of debt monitoring service that uses AI’s intelligent algorithm in searching, checking and categorizing through online tracking which is also a way to increase communication channel and assessing the reason why customers fail to respect the contract or pay debt.

  1. AI for Accounting and Customer Service

AI Bot has penetrating into the economic sector because many companies are looking for a new way to automatically communicate with customers. This also includes communication related to buyers’ decision making process and customer service. Fintech in particular will enable customers to improve their finance related decision making.

  1. Fraud Detection

AI can monitor steps and analyze transaction behavior, such as credit card and device usage. This enhances efficiency in fraud detection and prevention.

  1. Credit Score

At present, AI that is based on machine learning and big data analysis is used for predicting debt payment ability of customers and enabling a company to better understand its customers, which is important to credit and loan extension consideration process.

Matt Walters said that although we didn’t know how AI learns or makes decision because it doesn’t work only on the input we give, it however analyzes information from various sources. This can be both advantage and disadvantage as human gives the financial decision authority to AI. What we observe is that AI is increasing its role in financial industry and opening up huge opportunity for operators to generate more income from AI.

If you are interested in AI in other areas than Fintech,  you may read more articles on AI written by Khun Champ – Teepakorn.