posted by Collin Canright on June 5, 2017 - 10:04am
This week's report focuses on some of my long-time favorite sources of banking and FinTech news and insight. I follow the industry through reports from media organizations and industry experts I respect and trust. I started thinking about my sources and methods after reading Ron Shevlin's post "FinTech influencer lists have jumped the shark."
FinTech Rising is designed for busy financial executives who want to know about the technology trends changing the face of financial services. Most of my readers are one or two steps removed from the technology insiders and thought leaders who create and invest in FinTech products and advise and influence financial institutions.
Here's what some of my FinTech favorites had to say about the business last week:
This is how financial services chatbots are going to evolve
Chatbots are still relatively new in the United States in general and financial institutions in particularly. Most U.S. consumers are not especially keen on the technology, but that is expected to change as simple question-and-answer programs evolve, as they already are in China and Japan. "Today’s simple question-and-answer programs will evolve, experts say, to become sophisticated conversational agents, which will help customers transact and may even be capable of understanding emotional cues," writes Brian Patrick Eha in American Banker.
Unshackled algorithms: Machine-learning promises to shake up large swathes of finance
Machine learning is the primary technology powering current and next-generation chatbots. The Economist provides a concise summary of the technology's use in finance today, reporting that "Innovative fintech firms and a few nimble incumbents have started applying the technique to everything from fraud protection to finding new trading strategies—promising to up-end not just the humdrum drudgery of the back-office, but the more glamorous stuff up-front."
Banking must move from mobile-first to AI-first
The importance of machine learning and artificial intelligence in banking is underscored by the Jim Marous in his coverage of a new Accenture report for The Financial Brand. "Today, AI is moving beyond process improvement, becoming the new user interface (UI), underpinning the way financial organizations transact and interact with systems. Machine learning will adapt to data and interactions to improve areas like fraud detection, and will leverage AI-enabled tools (like digital assistants and chatbots) to create more contextual interactions with customers.
What should be priority for banks
It shouldn't be the repeal of Dodd-Frank, although that's what they want and what the Trump administration is working to deliver, suggests leading financial service seer and author Chris Skinner. Rather than risk another meltdown, how about that banks "embrace technology and change the boardroom. Banks are led by bankers, but banks are fintech firms too. Banks should therefore have a good balance of technologists and bankers in the boardroom. If a bank’s leadership team cannot understand the difference between machine learning and deep learning or between blockchain and a distributed ledger, how can they possibly lead the bank into this digital future?"
The best Meeker 2017 Internet Trends slides and what they mean
Every year, Mary Meeker presents "the most highly anticipated slide deck in Silicon Valley," in the words of the Recode blog. The partner in VC firm Kleiner Perkins Caufield & Byers analyzes the most important trends in technology, including smart phones, media and advertising, ecommerce, technology investments, and the companies and countries leading the business. Recode presents an overview of the report, and TechCrunch pulls out the 56 most important trends from the 355 slide deck.
The Ant goes marching
Much U.S. reporting on Donald Trump's withdrawal from the Paris Climate treaty mentioned that China is stepping right up to fill the U.S. void. The Meeker report notes that China far and away leads mobile payments. The venture firm FinTech Collective adds its perspective in its report on Ant Financial, which has the dominant FinTech market position in China. While "fintech startups in the U.S. have successfully unbundled financial services" they have also left a gap for the consumers that want "the simplicity of a “one-stop-shop.”" Ant Financial's "international ambitions" are starting to look like just that approach.
Soup and warm blankets for the fintech revolutionists?
In its coverage of Accenture U.K.'s report "FinTech" Did someone cancel the revolution," The FinTech Revolutionist suggests that the real reason FinTech firms and financial institutions are cooperation has more to do with co-option than easing regulatory burdens and customer acquisition. Beware that "paternalistic support may well prove smothering to many would-be disruptors," the Revolutionist reports. "Because coziness and coup d’etats just don’t mix."
This was a big week for blockchain. Jeremy Epstein, CEO of Never Stop Marketing, reports on the Consensus conference and the Token Summit. "Almost universally, people at these events were saying just how FAST things seemed to be progressing. The rate of innovation in various blockchains and solutions was mindboggling," he writes, in a post full of good links to companies and announcements.
Why the blockchain needs more failures to succeed. Failure is not exactly a welcome word in financial service yet it is critical to innovation, yet there have been few major failures in the blockchain market, writes blockchain investor and author William Mougayar. "Failures are important because their sum results in a new body of knowledge that is rich with useful insights and best practices. An aftermath of real failures can make the whole blockchain ecosystem more resilient, because it will result in revealing the boundaries and realities of what’s possible, useful, absurd, impossible, repeatable and scalable; out of everything that appears plausible and innovative at the beginning."