With the rise of Web 3.0, Artificial Intelligence and Blockchain technology are more obvious on how they will be used in the Financial Services Industry. These emerging technologies can take our industry to new heights and change how we view data and consumer experience.
But first, what is Artificial Intelligence and Blockchain?
Artificial Intelligence involves machines smart enough to carry out actions that otherwise require human intelligence. They train with algorithms through machine learning𑁋studying data and improving based on its learnings.
This method involves the AI having a central data platform to learn, using it to improve decision making and automate future tasks without a developer’s guidance. An example is Netflix recommending series based on user viewing behaviour.
Blockchain technology, however, records information on a ledger in a way no one can change or hack. Entries are recorded publicly. The process is transparent, can be done by any and informs all participants when a person tries to tamper with the ledger.
Besides transparency, blockchain has the most secure data encryption globally, making storing data more efficient and protected.
The Adoption of AI and Blockchain in FinTech.
In FinTech, AI and Blockchain prioritize providing personalized experiences for their customers. Advancements in modern technology show this, and integrating AI and Blockchain into the Financial Services Industry creates more speed and efficiency𑁋while making intelligent decisions for your customers.
AI’s predictive algorithms, alongside blockchain’s smart contracts, can create programs that make financial decisions on behalf of the customers, store customer data on-chain, verify and process their details for loans, etc.
Customer experience, when done right, can be improved in at least three ways.
- Security: Blockchain makes theft and hacking harder because each data has a unique identifier linked to one person. Because these data are stored on a decentralised ledger, they can’t be edited or manipulated. Why? No one person owns the ledger.
- Efficiency: Companies can request data and receive it immediately, thanks to the blockchain’s database, while AI aggregates the data and provides the company with needed information. An excellent use case is loan processing through banks or lending services.
- Reduced crime rate: Algorithms can detect payment fraud in real-time and cancel false transactions. Blockchain smart contracts can verify user identification and flag down fake ones. Financial institutions can easily carry out audits with data managed by the blockchain.
In an industry that relies heavily on data, companies can use these technologies to create flexible solutions, provide a better product experience, and solve the usual customer problems with the traditional banking sector.
These solutions have been implemented by daring startups and proven successful — improving the ease of doing business𑁋both for the organisation and the customers.
With more companies innovating with Blockchain and AI, new use cases and customer segments will continue to appear, and companies considering AI and Blockchain can use the opportunity to explore solutions that are in line with their objectives.