Fintech
How do artificial intelligence and climate change affect fintech?
Climate change he new developments in artificial intelligence could change the face of fintech, venture capital firm Team8’s Venture Creation Fintech fund found as it prepared a report on the future of the sector, published earlier this year.
The VC set out to answer the question: “What will fintech be like in 2030?” and found that while many changes are possible and likely, some potential changes, while less likely, could completely change the face of fintech.
Fintech, or financial technology, is the term used to encompass technological changes and advancements in financial services and products.
Artificial intelligence is one of the global processes that has the potential to revolutionize the industry. When it comes to the use of AI in fintech, there is good news and bad news, said Ronen Assia, managing partner of Team8’s Venture Creation Fintech fund.
A more efficient financial sector?
“The good news is that it will financial sector much more efficient,” Assia said, citing the process of taking out a mortgage as an example. Currently, meetings with brokers and wait times for approval can take weeks, but AI could reduce this to a few days by offering more personalized solutions because it analyzes individual customers rather than classifying people into broad categories, as is done now, Ronen Assia explained.
The bad news is that “fraud will be a much bigger danger,” he added. Artificial intelligence has made imitating others much easier and more convenient, allowing scammers to impersonate people much more easily.
Traditionally, banks are slower to innovate due to the huge amount of data they have on their customers, but they still have an advantage when it comes to artificial intelligence, said fund partner Galia Beer-Gabel. While fintech companies are well positioned to participate in integrating AI into banking thanks to their technical know-how, banks’ large data sets could allow them to train AI effectively, she explained .
“Great language models and applications built on top of them [will] create dramatic productivity gains and cost savings for banks,” the report finds.
Overall, AI has the potential to “completely change the way we get financial services,” Assia concluded. Announcement
The report finds that climate change also has the potential to create far-reaching changes in fintech. “Consumer concerns about climate change and the environment [will] lead to a significant realignment of incentives for businesses and financial services providers,” the report notes.
Wars and current global tensions appear to be creating a hostile environment for business, but there are still reasons for optimism, Beer-Gabel said.
“Times of instability and crisis, both financial and non-financial, are times that bring out many needs and often very significant companies are born in the period following these crises,” he explained.
Team8 is a VC that focuses not only on providing capital to the entrepreneurs it partners with, but also on helping them build businesses. They achieve this partly by conducting internal research and making forecasts for the industries in which they are involved and invest.