July 28, 2016

Fintech Exploiting AI and Blockchain Technology

By Jennifer Klostermann

AI and Blockchain Technology

The field of artificial intelligence (AI) had progressed rapidly in the last ten years, though first recognized in the 1950s. From autonomous motor vehicles to digital personal assistants, the technology is making its way into a variety of industries, enabling better task automation, language processing, and data analytics. But more recently, AI is evolving to allow for experiential learning and improved functioning. The financial industry recognized the benefits of AI early on, and AI driven analytics across big data already provides us with insights into financial performances through intelligence that might otherwise be considered unrelated.

AI Cultivating Superior Traders

Some fintech startups are already encouraging the use of AI in the retail sector, and it’s suggested that combining such technology with hands-on experience will produce ‘enhanced traders.’ As financial institutions invest in advanced forms of AI, technology that uses deep Machine Learning and cognitive systems, complex algorithms allow for reasoning capabilities capable of improving business performance. Already Google DeepMind’s AlphaGo and IBM’s Watson have demonstrated their expertise, training and learning from their mistakes much as people do, but evolving beyond the experts. 

Fintech Advancing with AI, Big Data, and Blockchain

In collaboration with Nest Hong Kong, DBS Bank Hong Kong has launched its second DBS Accelerator program, supporting innovative fintech startups. Says Sebastian Paredes, CEO of DBS Bank Hong Kong, “Fintech innovations in artificial intelligence, big data, blockchain, and more are spurring many exciting breakthroughs that will shape the way consumers and corporations transact and interact.

But it isn’t only dynamic startups coming up with original fintech projects. IBM is currently working to merge AI and blockchain into a powerful prototype. Tim Hahn, IBM’s chief architect in charge of Internet of Things security, has spent the first part of this year focused on bringing together AI computer Watson and the blockchain. Says Hahn, “What we’re doing with blockchain and devices is enabling the information those devices supply to effect the blockchain…You begin to approach the kind of things we see in movies.” Though Hahn notes that it’s still “early days” and the team is still experimenting with prototypes, an early feature investigated allows device owners to register on the blockchain using smart contracts, create varied tiers of access, and provide differing functionality to users through personalization.

Security, of course, is a constant concern, and at 2016’s InterConnect conference on mobile and cloud technology, Hahn discussed how the Watson Internet of Things platform might help avoid business risks. Says Hahn, “I don’t think blockchain and security are synonymous. They might be related, but they’re certainly not synonymous functions. One does not beget the other. There’s plenty ways to insecurely use the blockchain.”

Fintech AI Solutions Already in Play

Several AI solutions already exist in the fintech sector. Wealthfront, a California-based robotic advisor tracks account activity with its AI capabilities, analyzing how clients use and invest their money with the goal of providing more suitable financial advice. And Luvo, a technology developed by RBS, helps service agents answer customer queries, not only quickly searching through databases but using its artificial intelligence and ‘human personality’ to learn and improve itself. Though ideas and early innovations are now more regularly coming to light in the fintech environment, it’s safe to say that for the moment, a collaboration of both human agents and AI imbued robots offer the soundest solutions, and for a little while yet, the most comfortable.

By Jennifer Klostermann

Jennifer Klostermann

Jennifer Klostermann is an experienced writer with a Bachelor of Arts degree majoring in writing and performance arts. She has studied further in both the design and mechanical engineering fields, and worked in a variety of areas including market research, business and IT management, and engineering. An avid technophile, Jen is intrigued by all the latest innovations and trending advances, and is happiest immersed in technology.
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