Technology Applications in

Finance
 • Digitization in the finance industry has enabled technology
such as Big Data, ML, AI, advanced analytics and the cloud
to transform Financial Institutions (FIs).

• Big data in finance  petabytes of structured and

unstructured data  used to anticipate customer behaviors
 create strategies for banks and financial institutions.
BIG DATA IN
FINANCE • FIs use data mining to collect and analyze Big Data for: to
attract customers and build their loyalty, to know how they
feel, and to adapt what they offer to their needs.

• Financial Data Analysts are responsible for monitoring Big

Data with precision, security, and speed to establish
predictions, uncover patterns, and create predictive
strategies
 Sentiment/Feeling Analysis

Operational optimization

BIG DATA Risk/financial management

OBJECTIVES
New business model

Employee collaboration
 BIG DATA OBJECTIVES

Customer-centric outcomes
FIs uses algorithms to predict conduct related
to customers, decision-making trees, clusters,
text analysis, links and searches or survival
analysis are methods used to improve the
experience of consumers or retain them.
 BIG DATA ADOPTION- 4ES

Educate Explore Engage Execute

• Building a base of • Defining the • Embracing big data • Implementing big
knowledge business case and • Piloting big data data at scale
• Focused on roadmap initiatives to • Deployed two or
knowledge • Developing strategy validate value and more big data
gathering and and roadmap based requirements initiatives, and
market observations on business needs continuing to apply
and challenges advanced analytics
 B I G D ATA K E Y- 3 V S

Volume Velocity
Terabyte/Petabyte Batch
Records Near Time
Transactions Real time
3 Vs of Streams
Tables, Files
Big
Data

Variety
Structured
Unstructured
Semi-Structured
All the above
BIG DATA
EXAMPLE
 EXTRACT
TRANSFORM
LOAD (ETL)
 BIG DATA TOOLS/SOFTWARE

Data Mining/ML

Visualization

ETL

Data Processing

Data Storage
 THE BIG THREE

Data Science
Data Analytics

Discovers basic
patterns and high-
priority items to
extract knowledge or
investigate deeper
insights from data in
Big Data various forms, either
Drives instant value.
structured or
Visualization and
unstructured
simple analytics
 DATA ANALYSIS TOOLS

Classifications
• Is this user male or female?
• Will this user repay loan or
not?
Clustering
• Identifying problematic customers
• Fintech- Common Features
across all platforms

Regression
• Assign credit score for user
• Factors affecting timely
loan payment

Prediction
• Which transactions seem
fraudulent?
• Spam email
DIGITAL WORKFLOW
 BIG DATA APPLICATIONS IN
FINTECH

Data Workflow

● Find the right dataset - Advisory services, opinion

mining, build internal dataset

● Collect and enrich data - Use open data sets

● Data ingestion and organization - Unstructured to

Structured

● Data visualization and exploration - Finding Patterns

● Data aggregation and analytics - Analyzing aggregate

data
 Data Workflow

● Building predictive models- Fraud, Process Optimization,

Information security

B IG D ATA ● Personalization- Personalized banking, tailored loan plans

A P P L IC AT IO N S IN
F I NT E C H
● Contextual Personalization- Rented car insurance, travel
health insurance

● Discovering relationships- Recommender Systems

 BIG DATA IMPACT ON FINTECH

Big data Empowers

•Solving traditional problem at a massive scale

•Integrating different data sources (user interactions,

social profile, ..) in one

•Secure Transactions

•Real-time processing

•Access to historical data

•Discover patterns and relationships

•Automation of Workflows, Decisions and Alerts

 BIG DATA APPLICATION AREAS

• Solutions: Real-time processing

• Solutions: Data Analytics & Visualizations

• Solutions: Financial content aggregators

• Solutions: Credit score algorithms

• Automation: Micro loans, investment and insurance

(by eliminating operators)

• NLP: Social media opinion and sentiment mining

• NLP: Scout social space for user's profiles and

reputation
 • ML: Advise on avoidable personal spending

• ML: Risk assessment for investment opportunities

• ML: Fraud detection in banks and insurance companies

BIG DATA
APPL ICATION ARE AS
• ML/NLP: Cybersecurity for FinTech

• RecSys: Personalized credit card and loan plans

• RecSys: General-purpose product recommenders for e-

commerce websites
Artificial Intelligence and its Application in Finserv
 LET’S CLEAR THINGS UP:
Artificial intelligence
It is a science which studies ways to build
intelligent programs and machines that can
creatively solve problems, which has always been
considered a human prerogative.

Machine learning
is a subset of AI that provides systems the ability to
automatically learn and improve from experience
without being explicitly programmed. In ML, there
are different algorithms (e.g. neural networks) that
help to solve problems.

Deep learning
is a subset of machine learning, which uses
the neural networks to analyze different factors
with a structure that is similar to the human
neural system.
AI IN BANKING
AI IN BANKING- BANKS
PERSPECTIVE
 AI IN
BANKING-
CUSTOMER
PERSPECTIVE
HOW CAN BANKS TRANSFORM TO BECOME AI-FIRST?
AI IN FINTECH MARKET MAP
 AI IN ACTION- EXAMPLE

How it’s using AI: Up to $2 trillion is laundered every year —

or five percent of global GDP, according to UN estimates.
The sheer number of investigations coupled with the
complexity of data and reliance on human involvement
makes anti-money laundering (AML) very difficult work. It’s
also expensive. AML compliance costs shot up more than 50
percent between 2015 and 2019.

Ayasdi’s AI-powered AML incorporates three key

Case in point: Ayasdi’s AML AI was able to
process hundreds of data points (rather than just
the usual 20 or 30 transaction categories) for
Canada’s Scotiabank and for Italian banking
group Intesa Sanpaolo, purportedly resulting in a
massive drop in false-positive alerts.
advancements: intelligent segmentation or
optimizing the data-sifting process to produce the
fewest number of false positives; an advanced
alert system, which auto-categorizes alert
priorities; and advanced transaction monitoring,
which uses machine learning to spot suspicious
anomalies.
ROBOTIC PROCESS
AUTOMATION
WHAT IS ROBOTIC PROCESS AUTOMATION (RPA)?

RPA lets organizations automate

current tasks as if a real person
was doing them across
applications and systems

Interacts with individual systems in

the same way as a human user,
Functional trained robots are meaning no complex system
virtual workers and execute rule- integration required.
based information processes,
improving accuracy and efficiency

Robotic software can rapidly

model and deploy the
automation
SUCCESSFUL DEPLOYMENT OF RPA IN BANKING & FINANCE

Thorough Assessment
• Shortlist the processes suitable for
RPA implementation.
• Operational issues that can be
addressed and resolved through RPA
• Assess their impact & feasibility.

Make a business (use) case

• Calculate the cost component and efficiency gains delivered
by RPA.
• Conduct a quick comparison of RPA benefits based on various
metrics such as time, efficiency, resource and efforts.
• Set achievable and realistic targets in terms of ROI (return on
investment) and cost -savings to avoid disappointments due to
misaligned expectations.

Execution Strategy
Picking a suitable operating model, and workforce to manage the
execution seamlessly.
identifying the right partner for end-to-end RPA implementation which
would be inclusive of planning, execution, and support.
 R PA B E N E F I T S … .

Robotics drives efficiency benefits, along with improvements in

quality, scalability and resiliency in a cost-effective way

Human errors eliminated Capacity increase by robotics

Higher Quality Improved compliance/auditability virtual workforce and refocus
of staff on customer service
Higher staff satisfaction

Boost Average Handling 24/7 Monitoring

Productivity Times reduced (40%) around the clock

Cost Saver Processing costs Payback in up to 3

Reduced by up to (80%) months

Re-usable process
Implementation Fast Implementation of
elements
Speed new processes
The Internet of Things (IoT) is
the way of connecting devices
to communicate, share
information, anticipate needs,
solve problems and improve
efficiency. It’s basically inter-
networking of physical devices,
vehicles, buildings and other
objects, embedded with
electronics, software, sensors,
actuators, and network
connectivity that enables these
“smart objects” to collect and
exchange data.
 IOT ENABLED BANKING

Customer Use Banks Collect all Banks offer

different devices for the information different
transactions/ about customers options/services to
enquiries from devices Used customers
 U S E O F I O T I N F I N A N C IA L S E RV I C ES

Wealth management personalization

IoT will increase the accuracy and speed of
information gathering, as well as broaden the Improved payment security
range of available insights IoT will empower wearable
payment systems

Transaction automation
IoT enable the ‘Internet of Value’ — a
secure and monitored international
trading environment where all
payments are controlled via a system
of smart sensors and connected apps Improved transparency

Loan providers will be able to customize

the conditions based on customer
Optimized capacity management behavioristics, objectives, and credit
histories.
IoT will allow managers to predict the amount
of cash that needs to be directed to cash
dispensing machines at each location and
manage personnel at branches
Improves users’ financial habits
Connected devices can help users cultivate
positive financial habits and deal with spending
indulgence. E.g. Interact IoT- Shock wearable
Improved UX/CX
The Internet of Things affects banking
customer services by providing clients
with timely insights and personalized
experience

Increased Branch Banking Exp

Smart branches will allow bank managers to cut the
number of employees and maintenance costs, reduce
client waiting time, and create a connected
communication system between branches in different
locations- E.g. BMO Harris Bank
Automated Business Processes

IoT systems can take care of request handling,

automatically disable credit cards in case of payment
delay, transfer asset ownership. IoT will also automate
instant loan processing and collateral monitoring