This one trend can get as important as it can be for future

  • Unicorn investors saw big opportunities for acquisitions and investments during the pandemic, with Visa’s USD5.3bn acquisition of Plaid and Intuit’s USD7.1bn acquisition of Credit Karma. In addition, SoFi, an online student lender, has acquired Galileo Financial Technologies for USD1.2bn
  • Although deals and funding for the fintech ecosystem are down, with certain sectors being hurt through the first five months of 2020, some parts of the fintech ecosystem actually stand to benefit in the long term from the COVID-19 pandemic:
  • Fintech payment companies that serve the e-commerce space are seeing a surge in their transaction volumes even as other industries face existential crises
  • Adoption of chatbots in capital markets and conversational AI in investment banking enhances the experience for clients and internal staff, reducing the total cost of ownership through automation. The market for chatbots is expected to reach USD1.3bn by 2024, with real-time use of chatbots within organisations like BlackRock and BNP Paribas to settle mismatched foreign-exchange swaps, while Credit Suisse uses them to handle routine helpdesk requests.
  • Conversational agents enable clients to access research services and answer user queries on analyst reports, research coverage, research analysts’ profiles and target prices. The adoption of conversational agents in the post-COVID-19 era will enable banks to offer self-service capabilities to clients and reduce their dependence on client-servicing teams that manually handle client queries.
  • There are several conversational AI platforms in the market, such as OneReach.ai, Kore.ai, IPsoft, IBM Watson and Google Dialogflow. Understanding the importance of technology, Morgan Stanley has also built an AI-powered chatbot for internal users; it can answer research-related queries, and the company plans to roll out the platform to clients in the second half of 2020.
  • Wells Fargo: Adoption of AI and ML models in model governance has seen a steady increase
  • Ameris Bank: AI and ML have found applications in the areas of anti-money laundering and financial-crime and fraud detection, with higher use of AI-type technology in robotic process automation, which uses natural language processing to identify documents and classify elements such as text and words
  • BNY Mellon: The bank believes in the tangible benefits of using robotic process automation (RPA), intelligent automation and AI. Following the COVID-19 outbreak, the focus is greater on applications from a business and technology perspective, where AI and ML can help, largely due to use cases in marketing or even finance

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/