We hear it every week.”The world of AI is changing how we behave with X!” or “the world of FinTech is disrupting banks!” While popular headlines, these stories are largely incomplete. You see, what a lot of people miss with these innovations is that, while it’s great so many companies are fundraising or coming up with noteworthy tech, they never talk about the relationship between them.
Make no mistake, as the relationship between AI and finance become much more intertwined, these changes are going to leave an indelible impression upon our relationship with our money. Here’s why:
The Value of AI
While most of us know that AI has been a hot button topic amongst the tech world for some time now, we’re now seeing how the applications of it are playing out for both business and consumers. According to McKinsey, last year saw investments between $26 billion to $39 billion in AI, a significant increase from years prior. Why? Because now that we’ve established the foundation, it’s time to start building off of it.
As noted by CBInsights, Apple, Google, Microsoft, Facebook, and Amazon collectively own 242 patents, with Google holding 103 of them. It’s important to note that while these companies have a clear majority share of the intellectual property in AI, the applications of them are going to vary tremendously.
For example, the idea of something like a financial advisor chatbot (hypothetically speaking, of course) might pull from technology owned by Google, but the actual investment is still left up to whoever is acting on behalf of the client. Yes, technologies like this are going to play a significant role in how we make decisions with our money, which banks have already started to take note.
What The Banks Are Up To
While technology has been slow to the banking industry until the past couple years, their usage of AI has quickly started to become prevalent. As a story on banking and AI by Tech Emergence notes, major banks such as JP Morgan Chase, Bank of America, Wells Fargo and Citibank have unveiled their players of the AI game, from virtual assistants and legal document analyzation to chatbots and launching innovation centers. And even though they’re still early stage development, the success of these will largely determine how we feel about AI and our relationship with money.
Given our familiarity with these companies, consumers might adapt to them with much more ease than previously. This would be huge, as we can expand our usage of chatbots into becoming financial advisors and accountants as much as we could have investment portfolios aggregated from user behaviors in a matter of seconds. The possibilities of something like this is tremendous and could possibly change how our financial system works for the better. However, beyond just what the major institutions are up to, there has been an enormous amount of FinTech startups also trying to breach into the AI playing field as well.
Emerging FinTech Innovations
2017 saw record investments in the FinTech sector, clocking in around $8 Billion for the first half of 2017. While FinTech is something that’s been a part of the conversation about technology for the past few years, it hasn’t been until the past couple years that we’ve seen successful traction. There a couple of reasons for this: first, the infrastructure of the banking industry needed a facelift, and second, as technology has shifted, so has our behaviors around it. However, how AI plays a role in that will largely be determined of not just how we adapt to chatbots and virtual assistants, but how much we embrace entirely new ways of thinking.
Out of all the sectors of tech that has been the most lauded this year, cryptocurrencies and the blockchain have a lot of people second guessing if this is the next “dot-com boom.” The concept of smart contracts and harvesting entire currencies based on the transactions at hand is constructing a foundation that’ll change a lot of technologies we’ve become accustomed to. And for AI, some startups are already thinking ahead.
Just this past week saw the launch of SingularityNET, a blockchain for AI applications. While the transactions of people buying and selling AI tech to one another is going along with recent trends; the extraordinary part is how the nodes are also built off AI…meaning that their tracking AI transactions using AI. In other words, things are moving at a rapid pace.
The future of how AI and our relationship with money is going to be an interesting one, with more consumer-facing technologies coming much sooner than you’d think. All-in-all, this is going to be an exciting time and one to embrace as the future.