Blockchain and AI, 2017’s Top Fintech Trends

Lynn Bizri, Jun 05 2017

Global funding to fintech companies reached $2.4B in Q3 of 2016 according to CBInsights and KPMG’s Pulse of Fintech report.  TechCrunch lists over 20 fintech unicorns (valued > $1B) globally, providing a variety of services from payment (Stripe) to peer-to-peer lending (Prosper), and from transfers/ remittances (Transferwise) to SME financing (Kabbage). In MENA, there are more than 50 fintech startups, according to research conducted by ArabNet, several of which have attracted the interest of VC firms and raised millions and thousands of dollars in investment. Among these startups are players from diverse fields - crowdfunding (Liwwa, Zoomaal, and Eureeca), retail financial services (bayzat, souqalmal, compareit4me.com) and payments (MadfooatCom). 

Faisal Khan (Banking & Payments Consultant), Rasool Hujair (CEO of Najm), Tariq Al Asiri (Co-founder of Argaam), Abdul Haseeb Basit (CFO of Innovate Finance) and Moderator Muhammad Arrabi (CEO of Ecommerce SEA) came together to highlight the hottest global trends in fintech and what the next billion-dollar fintech businesses will be.

Investing in New Verticals
While fintech investment has been focused on peer-to-peer lending and payment remittance, more recently, investment has been going into newer verticals such as blockchain, and AI.

bitcoin

Bitcoin and Cryptocurrency
According to a report by CoinDesk, investment in blockchain and bitcoin startups in Q1 2016 exceeded $1.1B, and blockchaintechnology and applications for fintech remain among the top fintech trends for 2017. Among its many benefits, blockchain has value in creating transparency, security and has huge potential in improving customer experience. While it has mainly been used for bitcoins and electronic currencies in the fintech space, startups are moving towards more advanced business models related to stock trading, e-commerce and online marketplaces, cross-border micro-payments, and more.  

While bitcoin has many strengths, the fact that it moves around pseudonymously and makes it hard for government officials to track or seize accounts also makes it the currency of choice for ransomware hackers and illicit online marketplaces. Therefore, governments must be more alert and get into understanding blockchain and how to regulate it in order to put it under the radar.

AI

AI and Machine Learning
AI is another defining trend in fintech in 2017, and while it has not quite penetrated the fintech space as a whole, it has a lot of potential in providing deep learning for financial services. With the collection of large amounts of data, fintech companies are harnessing machine learning, AI and natural language process to give their users better access to financial services, simplify the customer journey and add more value to customer experience.

Currently used to automate manual processes, AI is also being used to track account activity, analyze data, and understand how account holders are spending and investing. Even banks are embracing AI and machine-learning to lower costs by automating as much decision-making as possible.

However, will increasing reliance on AI lead to redundancy? While AI and machine-learning will definitely disrupt the financial industry and have the potential to replace human efforts, many argue that human intuition plays a valuable role in risk assessment and we won’t see robots replacing our accountants anytime soon.

 

 

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