Question

Considering the emerging technologies (AI, Bitcoin, Blockchain, High Frequency Trading, etc.) that impact financial decision making, how would you recommend any or all of these tools for a FinTech Investment company/ agency?

Answer 1

AI and Fintech Investment Companies: Artificial Intelligence has revolutionized the finance industry. It has improved precision level in the industry and also enhanced the customer engagement level that speeded up their query resolution.

By the year 2030, traditional financial institutions can shave 22% in costs, as per the latest 84-page report of the Autonomous in an AI in the financial industry.

Fintech firm were the early adopters of relational databases and they eagerly waiting to go to the next level of computational power.In early ages of Banking, bankers used to have personal connections to their customers so that they can assist them well for their decisions. But in this digital world, this personal connection has lost. Can technology bring back the human connection? Artificial Intelligence (AI) at many levels can be leveraged to bring back that connection. Artificial Intelligence and Machine Learning can process the huge amount of information about customers.This data and information are compared and results in suitable services that customers want. This essentially means finding what’s right for the customers and hence can achieve customer satisfaction at the high level.

Why we should move towards AI in Fintech:

• Accurate decision making
• Automated customer support
• Fraud detections and claims management
• Automated virtual financial assistants
• Predictive analysis in financial services.

Blockchain in Fintech Industry: Blockchain in fintech is changing the way of doing businesses.The speed and scale of this disturbance will depend mostly on users adopting this new economy. People have already given their verdict – they are tired of black boxes, and want to determine how they pay for data and financial transfers.

According to PWC’s study of financial services and fintech, about 77 percent of the financial services industry is planning to adopt blockchain by the end of 2020. By 2020, banks, which were 1/3 of the organisations investigated, were inclined to incorporate blockchain into their activities, as recorded in a survey of eight of the 10 largest global investment banks following the blockchain path, according to a report released by Accenture and McLagan.
Blockchain assists in curbing data breaking and other comparable fraudulent operations to enable fintech businesses to share or transfer safe and unaltered information through a decentralised network.Fintech has interrupted the traditional industry of financial services and increased opportunity for fresh market entrants and technology-focused startups in the industry.

High Frequency Trading in Fintech: HFTs were once seen as profit-generating machines and destructive participants in the market ecosystem. But now it seems competition has tamed and commodified the HFT product. This shift has partly been caused by competitive pressure, and partly by the fact that the market is reflexive. In this case, reflexivity refers to the phenomenon of market participants (e.g., hedge funds or HFT) losing their competitive advantage because their presence and actions in the market change market behaviors as other participants adjust.

These arguments suggest that technology should not be a source of fear for investors. They still face the most technologically complex yet favourable trading conditions ever known in terms of low explicit trading costs, easy access to markets, and the availability of innovative products and strategies. Instead, investors should be vigilant to more mundane and traditional sources of disadvantage, such as excessive fees and misselling or having their assets used to fund the kinds of zero-sum games.