Particularly since the release of OpenAI‘s ChatGPT at the back-end of 2022, the world has sat up and taken notice of the potential of artificial intelligence (AI) to disrupt all industries in countless ways. To kick off 2024, The Fintech Times is exploring how the world of AI may continue to impact the fintech industry and beyond throughout the coming year.
Despite the multitude of concerns that surround AI and its impact in the future, there are many benefits the technology can have on the fintech industry. To explore these, we spoke to OLIVER, Tax Systems, Conga, Fiserv, and Clearbank.
A focus on higher-value roles
Despite a fear of AI replacing human job roles, many within the financial industry believe AI will not replace humans, but rather, enhance their productivity where it matters. For Russell Gammon, chief solutions officer at Tax Systems, the tax compliance software provider, eliminating laborious small tasks and focusing on more important ones is where AI can help fintechs.
“Large language models (LLMs) have the potential to handle a significant portion of repetitive and tedious tasks, while also identifying and flagging incidents that require human intervention. As a result, we can avoid spending our entire day manipulating spreadsheets and instead focus on adding more value in terms of creativity, skill, and strategic thinking to other areas of our work.
“Focusing on these higher-value roles not only increases efficiency and productivity, but it also improves job satisfaction. It allows junior team members to use the skills and knowledge that they have gained throughout years of studying and training, and subsequently makes tax a more enticing career for the graduates of today.
“This is essential for 2024 with the battle for talent being an ongoing struggle for firms of all sizes over the past few years. Swathes of experienced people have left the workforce while attracting new people into the tax industry has become more of a challenge. There’s simply less of an appetite for a career in tax than there was 15 years ago. That means the sector must make more of an effort in 2024 (and beyond) to attract new recruits, of which one method could be adopting the use of innovative new technologies.
“Technology is not a nice-to-have for Generation Z entering the workforce, rather, it’s seen as non-negotiable. Generative AI and other technologies can be hugely beneficial to businesses in bridging skills gaps and attracting new talent.”
Co-piloting admin tasks
Rodolphe Malaguti, product strategy and transformation, Conga, the lifecycle management solution, also shares the view that AI will only enhance the fintech sector. He said: “According to Deloitte’s report, State of AI in the Enterprise, 94 per cent of business leaders agree that AI will be critical to their overall success over the next five years.
“AI has already become a disruptor, and much like we’ve seen recently, next year it will continue to provide new ways of operating and doing business, moving ever closer to the centre of the enterprise as leaders recognise its potential.
“Companies, such as BT, have gone as far as saying that AI chatbots will soon be able to make new business process suggestions, even for features that might not yet exist.
“Next year, we can expect to see AI being used as more of a co-pilot to help with administrative tasks, through pre-defined prompts or with the help of manual prompts for advanced users and/or admins. This could help with creating a quote and associated contracts as well as to review and analyse the current contract relationship with a specific customer to look for specific terms like ‘termination’.
“AI could also help by creating a specific set of products that are generally purchased in addition to the one selected and creating a personalised white-space analysis based on customer purchase history.”
Creating efficiency gains
The importance of AI will be felt across the fintech industry. However, smaller firms and startups will be able to truly benefit from it the most in 2024 explains Tom Harris, CTO of Clearbank, the API software provider, as they will be able to reinvest saved time and resources back into their growing projects.
“Operational efficiency has to be the clearest win. The finance sector is full of unstructured communications, and while there have been efforts to improve and standardise this, such as ISO 20022, there is still work to be done. In areas such as bank-to-bank financial crime discussions, or customer interactions, much remains omnichannel and unstructured.
“There is a massive opportunity for generative AI to assist staff in a “co-pilot” role, structuring and making sense of this data, and creating smart case management workflows.
“Some have suggested that AI can create 25 per cent efficiency gains, and these are the sort of areas where these gains will come from. This is especially important for small and growing fintechs, where the efficiency can mean they put more time and money back into the consumer experience.”
Enhanced predictive modelling
Providing a couple of examples on how AI can benefit fintechs in the future, Sharon Whale, deputy CEO of OLIVER, the growth accelerator firm, said: “The single biggest benefit AI brings to fintechs is the ability to use data in more sophisticated ways than they were able to previously, particularly when it comes to predictive modelling. With this, fintechs are able to micro-target specific audiences accurately and in compliance with industry regulation.
“AI isn’t just about speeding things up, though; it’s also a powerful creative tool. With faster visualisation of ideas, the ability to rapidly prototype and A-B test, AI creates breathing room for creativity throughout fintech organisations by providing time for real thought.”
Fighting fraud
For Peter O’Halloran, head of enterprise and digital commerce at Fiserv EMEA, the optimisation fintech, one of AI’s biggest benefits in the fintech industry will be its use to fight fraud.
“The benefits of AI for fintech firms are already in evidence and will only build in the years ahead. AI and machine learning have long supported financial services and payment systems, especially in fraud detection and Know Your Customer (KYC) checks. The advance of generative models will further enhance these processes.
“For example, in fraud detection, AI can help customer service staff in call centres identify fraudsters through real-time voice tone and language analysis. Additionally, in regulatory compliance, AI streamlines time-sensitive tasks like audits and KYC assessments, reducing the potential for human error. Ultimately, using AI will instil greater confidence in fintech firms and the payment ecosystem, as it tackles fraud and non-compliance effectively.”
Francis Bignell
