FINTECH REPORT

SUBMITTED TO
Dr. AMIT NAGPAL

SUBMITTED BY
ANVESHA TYAGI
19009
FC
2019-21

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 ACKNOWLEDGEMENT
I thank Dr. Amit Nagpal who provided insight and expertise that greatly guided.

I would also like to show gratitude to the New Delhi Institute of Management
for giving us the platform to conduct our research, although any errors are our
own and should not tarnish the reputations of these esteemed persons.

Anvesha Tyagi

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 INTRODUCTION

Fintech is the integration of technology and financial services. The term is quite
broad, and includes several technologies that are wildly different from one
another.

The fintech landscape includes big tech companies and established financial
institutions, as well as the trailblazing young start-ups that are challenging the
dominance of both. One big thing that connects them all is a willingness to
overhaul traditional systems and processes and make things cheaper, faster and
more efficient. Many will use artificial intelligence and machine learning to
help hone in on customer needs with laser focus.

In the banking arena, the fintech revolution is well underway. Many new
technologies (like spend trackers, contactless payment and digital wallets) have
become such a big part of our daily routines that it would be difficult to imagine
life without them. Here are just a few that have emerged in recent years.

Examples of fintech

Budgeting apps: Gone are the days when you had to pore over a spreadsheet
and painstakingly log your income and expenses for the month. Now you can
rely on one of several budgeting apps out there to do the task for you.

Crowdfunding platforms: These platforms allow everyday people to raise

money to finance personal or charitable causes, business ventures, and creative
projects. Kickstarter, Patreon and GoFundMe are some examples of prominent
crowdfunding platforms.

Cryptocurrency: An internet-based form of currency, cryptocurrency functions

by removing banks from the equation and letting people transfer funds with one
another via blockchain technology.

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Open banking: It gives people greater access to their financial data (think
transaction records, repayment history, and credit card habits), rather than
leaving it up to the big banks to hoard for themselves. The goal is to help
Australians’ make better decisions when it comes to their money, eliminate
some of the obstacles involved in switching banks, and lower the hurdles new
entrants face when entering the banking space.

Payment services: Whether you’re looking to transfer some money to a friend

or after alternative ways to pay off big ticket purchases you’ve made, there are
hundreds of tech-based payment services available - like PayTm, PhonePe and
Google Pay.

Robo advisers: If the fees charged by a traditional investment advisor are a bit
too steep, you might want to consider using a robo advisor. These are systems
that rely on algorithms to make investment decisions, often at a much more
successful rate than humans.

Wealth and investment apps: There’s been a slew of investment apps to

emerge in the last few years that aim to demystify investing and make it
accessible to all kinds of people. Some like Raiz are geared towards casual
investors, and operate by rounding up purchases users make to the nearest dollar
and investing the difference, along with allowing for regular or one-off deposits.

Others, Online Investing App, are mobile versions of existing share trading
platforms, and allow people to monitor the share market and jump on
opportunities no matter what time of day.

EMERGING TRENDS OF FINTECH

According to PwC, “global investments in fintech have more than tripled since
2014 to over $12 billion” with no signs of slowing down. The funding

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combined with industry pressure will advance tech adoption more rapidly than
in previous years.
There are 8 emerging trends that has helped lots of companies save money and
emerge as leaders in their own fields

1. Platform as a service (PaaS): Institutions can adapt to changing needs

with customized infrastructure that allows them to embrace cloud
platforms fully. Data shows, competitive public cloud PaaS revenue will
reach 22.602 million in 2019, up from 13.872 million two years ago.
These services provide the infrastructure to perform a variety of tasks,
including:
a. Team collaboration
b. Resource management
c. Payment processing
d. Credit risk management
2. Non-Traditional Banking Services Gain Credibility: Virtual
institutions look to boost profits by offering supplementary services like
financial tools developed for new voice technologies. This uptick in
neobanks will challenge traditional institutions to improve their offerings
and deliver more value to consumers. Plus, as virtual banks embrace new
regulations and demonstrate flexibility, consumer confidence will grow.
While it’s unlikely digital-only banks will replace brick-and-mortar
institutions, they’ll pressure the industry to provide a more transparent
customer experience.

3. Increase in Dependence on Intelligent Technologies: The mixture of

artificial intelligence (AI), machine learning (ML), and robotic process
automation (RPA) provides multiple benefits to those in the financial
industry, such as:

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  A decrease in risk from loan defaults through the use of alternative
credit decisioning models (ACD) that use ML.
 Smarter risk management that uses predictive and proactive models
instead of reactive processes.
 An increase in operational improvements resulting from data
collection and analysis.
 Better customer experience through the adoption of virtual customer
assistants (VCA).
4. Mobile Payment Options Go Mainstream: Fintech trend covers a range
of payment options, including virtual currency and block chain. These
technologies are called “Internet of Payments,” and all of these choices
change how consumers view mobile banking and fund transfers.
 In the US, consumers feel comfortable with wallet-less options and
rally behind big players, like Google and Apple.
 On a global scale, access to payment options allows a greater number
of people to interact with companies and complete everyday
transactions without a traditional bank account.
 Payment options use blockchain technologies to verify identities for
greater financial inclusion.
5. New Benefits from Cryptocurrency And Blockchain Innovations: The
financial services industry currently spends $1.7 billion each year on
blockchain technology.” Blockchain investments aren’t expected to slow.
Data from PWC shows, “77% of officials in top management positions
expect to adopt blockchain as part of a production system or process by
2020.”
In fact, we see more blockchain-based fundraising for start-ups in the
financial industry and increased use of crypto technologies across sectors.
With a move towards Blockchain as a Service (BaaS), both institutions
and consumers will have increased access to this technology.

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6. Use of Regulatory Tech (RegTech) Grows: RegTech uses AI to
automate risk assessments while delivering insights on big data. As data
collection grows, the number of regulations increases. With increased
oversight, those in the financial industry feel the burden of compliance
with various new regulations.

a. Conventional Institutions: Traditional organizations face pressure

from upstarts requiring further investment in technologies to track
crucial information. RegTech companies offer solutions for
institutions. Advancements in the arena improve systems for
managing:

 Customer identification processes: Know Your Customer

(KYC) and Anti Money Laundering (AML).
 Regulatory and compliance issues.
 Ongoing data privacy and storage concerns.
capabilities of big enterprises increase as they shift into automated
processes, AI, and blockchain to manage regulations and data. In
its Banking and Capital Markets Outlook, Deloitte advises, “banks
should buckle down and make compliance modernization a priority
in 2019, focusing particularly on making regulatory systems
already in place more efficient for business strategy.”
7. Automation Differentiates Financial Services: automation and AI will
emerge in the next few years where machines will do up to 10 to 25
percent of bank work.” For the consumer, this means an improved (and
faster) banking experience. Whereas, financial institutions value the cost
savings and reduction in errors. Tech like RPA software, machines make
quick work of tedious and repetitive data entry. This allows companies to
focus on customer service improvements instead of being bogged down

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 by data collection. Companies typically see 40–100% ROI within 3–8
months. The annual cost of running a robot to help with automation is
nothing compared to the cost of paying someone to do the same tasks
much less efficiently. By delegating common tasks to AI, companies can
shift their attention to satisfying customer needs with significant results.

8. Conventional Institutions and Fintech Blend Services: With a need for

agility and an increased reliance on tech, traditional institutions continue
to invest in and acquire Fintech technologies. The rise of RegTech and
insurance tech (insurtech) along with smart contracts give conventional
organizations a way to update their infrastructure and cut long-term costs.
Plus, Fintech startups capture more of the market through strategic
partnerships and consolidation.

Advantages for Consumers Rise

Each of these trends gives consumers the upper hand. The push for a seamless
customer experience delivers new technologies that up the levels of
convenience and security. Customers benefit from improvements that provide:

 Access to bank reps through remote services.

 Kiosks that provide user-friendly options.
 Enhanced security measures that deliver better peace of mind.
 Voice biometrics give consumers more options for accessing financial
information.
 Faster payment and fund transfers speed up transactions.
 More apps that put all of your financial data in one spot.
Plus, Fintech technology trends help small to medium business owners gain
better access to financial support and lending. However, as those in the financial

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industry begin to see returns on their Fintech investments, that balance may
shift.

Fintech Trends Speed Up Adoption of Tech

Although in the past, the financial industry evolved slower, business

organizations are moving more rapidly towards agile workflows and systems.
This stems from a need to adapt for changes in consumer behavior and
regulations while facing threats from non-traditional competition. In the World
Retail Banking Report by Capgemini and Efma, “bank executives said non-
banking players are affecting the financial service (FS) value chain across all
lines of business.”
Delivering what customers want requires a total digital transformation in the
industry. Going forward, consumers benefit from improved user experience.
However, the rapid pace of Fintech innovations means more institutions can
realize advantages, like cost savings, sooner than later.

NEOBANKS

The term neobank first became prominent in 2017 to describe fintech based
financial providers that were challenging traditional banks. There were two
main types of company that provided services digitally, companies that applied
for their own banking license and companies that partnered with a traditional
bank to provide those financial services.

A neobank is a type of direct bank that is 100% digital and reaches customers
on mobile apps and personal computer platforms only Neobanks do not operate
traditional physical branch networks. Neobanks are technology-driven and may
adopt machine learning and artificial intelligence technologies whilst not being
constrained by legacy systems of traditional banking competitors.

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The ability to open an account via your smartphone or laptop is a key
characteristic of neobanks worldwide. While most commercial banks have some
sort of e-banking option, few have developed a way for new customers to open
accounts without having to go to a branch.

When you open a bank account with a bank, the process typically looks like
this: you go to a branch with all your documents (proof of address,
identification documents, employment contracts, etc.), meet with an associate,
who will then send your application off for review. Then it’s a waiting game for
anywhere from 2 weeks to several months. For a business bank account in Hong
Kong, you’ll also have to prepare paperwork such as audited financials,
contracts, business history, and need to have a minimum amount of starting
capital ready. This can take anywhere from one to six months. Neobanks, on the
other hand, have been able to build new digital processes that cut down on wait
times and friction.

They often take advantage of technology like AI and facial recognition to

streamline and automate the account opening process – without compromising
on stringent compliance and regulatory requirements. For example, Neat is a
FinTech that provides multi-currency businesses accounts, known for its 15-
minute online application. Approved accounts are opened within a week. Their
digital-onboarding process integrates with the Hong Kong Companies Registry
directly, so they can get any necessary documents straight from the source – in
other words, the applicants don’t have to gather official paperwork themselves
or meet with anyone to deliver it in person. In fact, Neat won an award from the
Hong Kong government for its fully-digital Know Your Customer process in
2017.

 58% of small businesses mention low fees as a criteria for selecting a

business banking partner, while only 34% are looking for an “established

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 financial brand”. Neobanks offer not only transparent pricing but lower
fees than incumbent banks – one of the ways they do so is by eliminating
branches.
 Depending on the licences they have, neobanks often start out by offering
a very specialised service – such as loans, credit cards/prepaid cards, or
virtual accounts. They often target a specific niche, such as expats,
students, or SMEs, to build a product that’s specifically catered for that
audience.

OVERVIEW OF FINTECH 2019

1. High level of regional variation in fintech disruption: Winners in

fintech are primarily emerging at a regional rather than global level, similar
to traditional retail banking. Regulatory complexity within countries and
across regions is contributing to regional “winner take most” outcomes for
disrupters. Firms need to invest more in regional compliance rather than
launching a global effort on day one. For example, in money transfer,
regulatory approval in a single EU country can be passported across the
other EU countries. This encouraged many cross-border payments start-ups
to expand into neighboring European countries before moving across the
Atlantic, which requires additional regulatory investment. Individual US
states require licenses for money transfer, which makes US expansion more
cumbersome for European operators. In China, where regulation has been
more accommodating, ecosystems were formed by technology giants which
have directly entered and are reshaping many financial sectors including
digital payments, loans, and wealth and asset management. In the US and
Europe, which have stringent regulatory requirements and well-established
banking offerings, efforts have been more fragmented and large technology
players have been limited to payments offerings and some small-scale
lending offerings. As fintech markets mature, attackers that have established
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a regional presence are now eyeing international expansion. To successfully
enter new markets, they must adapt to new sets of market dynamics and
government regulations and select new markets based on a clear
understanding of regional variations.

2. AI is a meaningful evolution, not a great leap forward for fintech: The

buzz surrounding artificial intelligence (AI) applications in fintech is intense,
but to date few standalone use cases have been scaled and monetized.
Rather, we see more advanced modeling techniques, such as machine
learning, supplementing traditional analytics in fintech. While AI shows
great promise, it is likely to be more of an evolution than a great leap
forward into new data sources and methods. while consumer lending
platforms are increasingly incorporating iterative machine-learning
approaches to steadily improve existing performance, they do not need to
take a quantum leap in AI to do so.

3. Good execution and solid business models can trump exotic

technology: The most successful fintechs have evolved into execution
machines that rapidly deliver innovative products, with dynamic digital
marketing campaigns to match. Notably, winning start-ups often succeed
without using completely new technology. Data-driven iteration, coupled
with early and continuous user testing, has led to robust product-to-market fit
for these firms. While cutting-edge technology is exciting, it can also be
complex; demand is also untested, which can result in long lead times with
little opportunity to validate the business model. As an example, consider
cross-border money transfer, a market that has traditionally been dominated
by large incumbents such as Western Union. Despite much hype about
fintech—particularly blockchain-based solutions.

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4. Scrutiny of business fundamentals is increasing as funding grows more
selective: Years into the fintech boom, after many highs and lows, investors are
becoming more selective. While overall funding remains at historically high
levels, technology investors globally are increasingly investing in proven, later-
stage companies that have shown promise in attaining meaningful scale and
profits. Data compiled by PitchBook show that despite a clear increase in total
VC funding, investments in early-stage fintechs decreased by more than half
from a peak of more than 13,000 deals in 2014, to around 6,000 in 2017. The
bar for funding is quickly rising, and companies with no clear path to
monetization are going to have a harder time meeting it.Indeed, several well-
known and well-capitalized fintechs have yet to develop a sustainable business
model and may need to find a path to more meaningful revenues quickly to
continue to attract capital. This is especially evident for challenger digital
banks. Some have raised significant sums but still struggle to monetize their
products effectively; others have not yet delivered a current account product due
to complications around licenses and regulations.

5. Great user experience is no longer enough; Back when banks had

cumbersome websites that didn’t render on mobile, it was easy for fintechs to
win over customers by building a half-decent app with a great user experience
(UX). Today, most financial institutions have transformed their retail user
experience, offering full mobile functionality with best-in-class design
principles. Great UX is now the norm. Customers, as a result, require more
reasons to switch to new fintech offerings. Simple interfaces, ease of use, and
free stuff no longer equate to a viable business model. Attackers now need to
find more robust ways to differentiate themselves from incumbents.

6. Incumbents can, and do, strike back: In general, incumbents were initially
slow to respond directly to fintech attackers, perhaps for fear of cannibalizing
strong legacy franchises. Many started by trialing digital offerings in non-core

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businesses or geographical areas, where they could take more risks. Retail
banks have led the charge in upgrading digital experiences to match fintech in
their core banking products. For example, Wells Fargo recently added a
predictive banking feature that analyzes account information and customer
actions to provide tailored financial guidance and insights, with over 50 types of
prompts. Other investment banks have focused more on robo-advisory services
in their digital efforts.

7. More attackers and incumbents are partnering: An increasing number of

incumbents and fintechs are realizing the benefits of combining strengths in
partnership models. As they reach saturation point in their native digital
marketing channels, many fintechs are now actively looking for partnerships to
grow their business. They bring to the table their higher speed and risk
tolerance, and flexibility in reacting to market changes. Larger ecosystem firms
also bring broad and sticky customer bases from their core internet businesses.

Infrastructure fintechs: Potential is high, sales cycles are long: Like a giant
tower of Jenga pieces, an enterprise’s legacy IT stack has many building blocks,
some purchased off-the-shelf and some developed in-house. As in Jenga,
removing or replacing “pieces” of the IT stack can be risky and complicated.
Digital innovation is often hindered by legacy IT, particularly the core banking
system (CBS), and the costs of changes are high. Several CBS fintechs have
emerged, seeing legacy IT issues as a golden opportunity for disruption. Like
those providing “picks and shovels” to miners during a gold rush, they are not
seeking to disrupt incumbents, but to build a profitable business by helping
banks upgrade their technology capabilities in a modular, open-API world.
Many financial institutions are evaluating replacing their core IT systems in the
next five to ten years. However, for now, the CBS fintechs are finding business
with smaller or newer banks, CBS fintechs may face an uphill battle with larger
institutions, given long sales cycles and risk aversion, particularly for something

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as important as core infrastructure. Large banks’ traditional procurement and on
boarding process for new vendors or applications may present a challenge to
newer fintechs that lack a track record and compliance rigor. CBS fintechs are
likely to continue, therefore, to target smaller banks or focus on non-core areas.
This should allow the fintechs to prove their concepts and build their
reputations, while fine-tuning their product offerings for larger customers.

9. There is a tentative return to public markets: As fintechs mature, at some

point they must decide whether to go public. While both investors and
employees require a path to liquidity, many fintech founder-CEOs have
preferred to stay in the private market to avoid the burdens of public listings—
as well as the batterings received by other fintechs that tested the IPO market.
Many peer-to-peer (P2P) lending fintechs—among the earliest to list in the
US—saw valuations drop drastically in the public market. A number of Chinese
lending fintechs that listed on the NYSE and Nasdaq in 2017 subsequently
traded much lower than their IPO prices, driven by reports of bad loans and
unfavorable regulations in China.

10. Chinese fintech ecosystems have scaled and innovated faster than their
counterparts in the West: China’s fintech ecosystems are structurally different
from their counterparts in the US and Europe. Outside China, the most
successful fintechs are typically attackers that have focused on one vertical,
such as payments, lending, or wealth management, deepening their core
offering and then expanding geographically. In the US, for example, PayPal and
Stripe focus mainly on online payments; Betterment and Wealthfront offer
digital wealth management; and LendingClub and Affirm are alternative
lenders—all proven strategies.

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 FIVE KEY ELEMENTS IN FINTECH

Blockchain, AI, security, IoT and cloud help evaluate new advances

compared with blockchain, IoT, security and cloud applications are now
mainstream. One interesting IoT use case highlighted in Singapore involves and
insurer that uses sensors and drones to help agents in the field assess claims. In
addition to speed, the system offers safety in areas such as construction sites,
where a drone survey reduces the risk of injury to humans.

When it comes to AI, many business leaders believe its potential is still far from
being realised, and that it may ultimately deliver the most benefits.Research by
the World Economic Forum and Deloitte Consulting, based on workshops and
interviews with 200 AI experts, sheds some light on what the future might hold.

Pervasive Impact: Artificial intelligence is a suite of technologies, enabled by

adaptive predictive power and exhibiting some degree of autonomous learning,
that dramatically advance our ability to:

 recognise and detect patterns;

 anticipate and forecast future events;
 create rules to optimise outcomes;
 make good decisions by applying rules;
 communicate with other people through digital or analogue media.

AI is enabling financial institutions to drive new efficiencies and deliver new

kinds of value, ranging from "doing the same thing, better" to "doing
something radically different".

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For example, in investment management, a firm can use AI to help seamlessly
set up accounts and acquire new customers. Smarter decision-making is
possible when financial advisers are equipped with highly personalised
customer insights based on analysis of individual customer data.

Consumers will one day interact with an AI-based agent offering guidance on
complex decisions such as homebuying, retirement planning or corporate
financing. At the same time, routine transactions such as bill payment and
refinancing will be automated. In conclusion, the impact of AI on financial
institutions as well as regulators and consumers or society as a whole will:

Create new kinds of value: Product and service innovation will lead to greater
financial inclusion and a smoother, more personalised customer experience.

Reshape operating models: Financial institutions will become leaner, highly

networked and more specialised. They'll also become more dependent on the
capabilities of large technology players.

Upend competitive dynamics: Data sharing will become critical to competitive

success. The advantage will go to first movers and large-scale players.

Take public policy into uncharted territory: AI will raise questions that
prompt the need for a new set of norms to protect humans, regulate machines,
and remake the financial infrastructure.

The future of financial services lies in its ability to fully benefit from new
technologies. It's a journey subject to the whims of economic, social and

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political change that no firm should take on its own. Nothing less than a
collaborative effort among stakeholders -- financial institutions, fintech,
associations and regulators -- will triumph over these challenges and unlock all
the benefits for the best interests of business and society.

CORE BANKING SYSREM

A core banking system is the software used to support a bank’s most common
transactions.

Elements of core banking include:

 Making and servicing loans.

 Opening new accounts.

 Processing cash deposits and withdrawals.

 Processing payments and cheques.

 Calculating interest.

 Customer relationship management activities.

 Managing customer accounts.

 Establishing criteria for minimum balances, interest rates, number of

withdrawals allowed and so on.

 Establishing interest rates.

 Maintaining records for all the bank’s transactions.

Core banking functions differ depending on the specific type of bank. Retail
banking, for example, is geared towards individual customers; wholesale
banking is business conducted between banks; and securities trading involves

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the buying and selling of stocks, shares and so on. Core banking systems are
often specialized for a particular type of banking. Products that are designed to
deal with multiple types of core banking functions are sometimes referred to as
universal banking systems.

Examples of core banking products include Infosys’ Finacle, Nucleus FinnOne

and Oracle's Flexcube application (from their acquisition of Indian IT vendor i-
flex).

AI IMPACT ON FINANCE SECTOR

1. Risk Assessment: Since the very basis of AI is learning from past data; it is
natural that AI should succeed in the Financial Services domain, where
bookkeeping and records are second nature to the business. We use credit score
as a means of deciding who is eligible for a credit card and who isn’t. However,
grouping people into ‘haves’ and ‘have-nots’ is not always efficient for
business. Instead, data about each individual’s loan repayment habits, the
number of loans currently active, the number of existing credit cards, etc. can be
used to customize the interest rate on a card such that it makes more sense to the
financial institution that is offering the card. Now, take a minute to think about
which system has the capability to go through thousands of personal financial
records to come up with a solution- a learned machine of course! This is where
AI comes in. Since it is data driven and data dependent, scanning through these
records also gives AI the ability to make a recommendation of loan and credit
offerings which make historical sense. AI and ML are taking the place of a
human analyst very fast as inaccuracies which are involved in human selection
may cost millions. AI is built upon machine learning which learns over time,
less possibility of mistake and analyzing vast volumes of data; AI has
established automation to the areas which require, intelligent analytical and

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clear-thinking. ChatBots have indeed proven themselves as a powerful tool to
customer satisfaction and an unmatched resource for the enterprises helping
them save a lot of time and money.

2. Fraud Detection and Management: Every business aims to reduce the risk
conditions that surround it. This is even true for a financial institution. The loan
a bank gives you is basically someone else’s money, which is why you also get
paid an interest on deposits and dividends on investments. This is also why
banks and financial institutions take fraud very, very seriously. AI is on top
when it comes to security and fraud identification. It can use past spending
behaviours on different transaction instruments to point out odd behaviour, such
as using a card from another country just a few hours after it has been used
elsewhere, or an attempt to withdraw a sum of money that is unusual for the
account in question. Another excellent feature of fraud detection using AI is that
the system has no qualms about learning. If it raises a red flag for a regular
transaction and a human being corrects that, the system can learn from the
experience and make even more sophisticated decisions about what can be
considered fraud and what cannot.

3. Financial Advisory Services: According to the Pwc Report, we can look

forward to more robo-advisors. As the pressure increases on financial
institutions to reduce their rates of commission on individual investments,
machines may do what humans don’t- work for a single down payment.
Another evolving field is bionic advisory, which combines machine calculations
and human insight to provide options that are much more efficient than what
their individual components provide. Collaboration is key. It is not enough to
look at a machine as an accessory, or on the other end, as an insufferable know-
it-all. An excellent balance and the ability to look at AI as a component in

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decision-making that is as important as the human viewpoint is the future of
financial decision-making.

4. Trading: Investment companies have been relying on computers and data

scientists to determine future patterns in the market. As a domain, trading and
investments depend on the ability to predict the future accurately. Machines are
great at this because they can crunch a huge amount of data in a short
while. Machines can also be taught to observe patterns in past data and
predict how these patterns might repeat in the future. While anomalies such as
the 2008 financial crisis do exist in data, a machine can be taught to study the
data to find ‘triggers’ for these anomalies, and plan for them in future
forecasting as well. What’s more, depending on individual risk appetite, AI can
suggest portfolio solutions to meet each person’s demand. So a person with a
high-risk appetite can count on AI for decisions on when to buy, hold and sell
stock. One with a lower risk appetite can receive alerts for when the market is
expected to fall, and can thus make a decision about whether to stay invested in
the market or to move out.

5. Managing Finance: Managing finances in this well-connected and the

materialistic world can be a challenging task for so many of us, as we look
further into the future we can see AI helping us to manage our finances. PFM
(personal financial management) is one of the recent developments on the AI-
based wallet. Wallet started by a San Francisco based startup, uses AI to builds
algorithms to help the consumers make smart decisions about their money when
they are spending it. The idea behind the wallet is very simple it just
accumulates all the data from your web footprint and creates your spending
graph. Advocates of privacy breaching on the internet may find it offensive but,
maybe be this is what lies in future. Thus it has to be the preferred personal
financial management in order to save time from making lengthy spreadsheets

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or writing on a piece of paper. From a small-scale investment to a large scale
investment AI commits to be a watchdog of future for managing finances.
Without a speck of doubt, AI is the future for the finance industry. Since the
speed at which it is making progressive steps towards making the financial
processes easier for the customers, it is very soon going to replace humans and
provide faster and much more efficient solutions. Bots are gradually evolving as
innovations are being in the AI sector. Massive investments are being made by
the firms who are seeing this as a long-term cost-cutting investment. It helps the
companies in saving money of hiring humans and also avoiding human errors in
this process. Though it is still in its nascent stage the speed at which it is
progressing to evolve the finance sector, it can be well expected that the
prospects are going to lead to minor losses, smarter trading and of course top-
notch customer experience.

BLOCKCHAIN IMPACT ON FINANCIAL SECTOR

The blockchain allows for a level of transparency that a centralized banking

authority can’t. One big reason for this is the fact that the blockchain — in its
decentralized structure — allows for a level of transparency that precludes the
sort of nefarious or risky activity that in 2008 proved rampant. If we’d had the
blockchain in 2008, the potential repercussions of the transactions made by
hedge fund managers and traders in our centralized system would have been
more obvious to the public. Decentralized ledgers, in this way, offer a safer and
more efficient way of governing and monitoring financial transactions. The
blockchain is immutable, which ensures greater efficiency. In addition to
being transparent, however, the blockchain is also immutable — making the
blockchain an even safer alternative to the current standard. To be immutable is
to be unhackable. An immutable decentralized ledger makes it impossible for a
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party in a blockchain community to fake financials. For this reason, financial
institutions, startups, and government agencies will soon house their cap tables,
government data, and financial statements on the blockchain. To not switch that
information over will prove irresponsible, because why would we not agree on a
safer alternative — an alternative where all bits of crucial data are made
automatically available and unalterable. The blockchain allows institutions to
move money fast and at a low cost. Of course, the benefits don’t stop there.
The blockchain also enhances the speed and efficiency with which financial
institutions are able to process and complete transactions. The blockchain
opens up the world of finance to more people. The blockchain will impact
institutions or companies initially, yes. But as the ecosystem matures, new use
cases will materialize for the average consumer.

FUTURE OF FINTECH-DIFFERENT WAY TO BANK

Neobanks are trying to capitalise on that disillusionment by positioning

themselves as a more modern, customer-focused alternative.

To that end, they tend to be vocal about their principles in a way that other
banks aren’t. For example, 86 400 has said what it does goes beyond just taking
deposits — it aims to take the stress out of money management and help
customers forge better financial habits. And Xinja makes good on its
community-first ethos by giving users a forum to provide feedback, learn about
upcoming projects, and discuss general money matters.

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THANK YOU

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