AI and Fintech trends in 2020.
2019 felt like the year when fintech reached a new level of maturity, and began to be taken more seriously alongside traditional banking and financial services models. A key reason for this was the continued deployment of artificial intelligence (AI) solutions, which allow fields such as trading, asset management, compliance, payments and customer service to operate much more efficiently. But what will the key AI and Fintech trends be in 2020? Missive’s resident AI enthusiast Flora Davies takes a look at the trends and innovations that are likely to have the biggest impact on the fintech and financial services industry.
Improvement to natural language processing technology
Natural Language processing applications (which can understand language to some degree) have been a key asset to fintechs. They are now not only advanced enough to simulate linguistic competence, but also to produce usable information to benefit businesses.
Arguably the most impactful applications in conversational AI are chatbots, which can make binary decisions during a conversation based on the response of the human participant. We are likely to see this customer service technology scale rapidly in 2020. In fact, forecasts from Gartner predict 25% of customer service and support operations will integrate chatbot technology across engagement channels by 2020, up from less than 2% in 2017.
The voice of banking and facial recognition advancements
According to Accenture, AI will add $1.2 trillion in value to the financial services industry by 2035. Banks are clamouring to capitalise, and 2019 saw algorithms rapidly improve and proliferate into virtually all aspects of financial services.
Taking inspiration from Apple’s Siri and Amazon’s Alexa, banks are now investing in voice and facial recognition technologies to become a reliable customer authentication method. In 2019 Lloyds Bank revealed it is testing Microsoft’s biometric authentication technology, whilst MasterCard continues to tinker with a feature it calls “selfie pay”. In Asia, Japan’s Seven Bank plans to outfit its ATMs with facial recognition technology.
However, biometric technologies such as these raise security concerns for the consumer. It remains to be seen what, if any, effect the California Consumer Privacy Act will have now it has been enforced, and if any cities will follow San Francisco’s lead in banning facial surveillance technologies. A revolt against a biometric technology company would likely have a ripple effect on financial services companies that have implemented the technology.
The intersection of AI and cybersecurity
AI is playing an increasingly important role in helping to prevent cybersecurity breaches. Following a 63% rise in sophisticated cyberattacks over the last three years, conventional cybersecurity methods, such as anti-malware software, are no longer deemed sufficient on their own. In the first six months of 2019, the percentage of global regtech deals increased to 42.6%, compared to the proportion of cybersecurity investments which grew from 14.4%-20.9% between 2014-2018. This highlights the growing need among businesses for support to comply with regulation in the face of a growing threat. Over the course of 2020, we expect to see AI and ML play an increasing role in the development of sophisticated cybercrime solutions.
2020 is shaping up to be an exciting year for artificial intelligence. As algorithms are adopted more and more, and the industry continues to evolve, we’ll be watching keenly to see how it enhances and overhauls not only complex industries, but our everyday life.
By Flora Davies, Missive
Flora Davies explores AI and Fintech trends
If you are a fintech looking for communications support, contact a member of our team.