Financial Technology or ‘Fintech’, is on the edge of something great.
That was the message from a recent one-day workshop hosted by the University of Essex at Runway East. Industry leaders gathered round to examine the current challenges and positives from within.
It was in collaboration with Hood Group, who are hoping to input on the Fintech debate and essentially create a whole new industry. It formed a large part of a new 2-year collaboration between the two to develop a data strategy, thanks to support from the government’s innovation agency, Innovate UK. This is key for Hood Group as with individuals creating more data than ever before, there is the potential that these snapshots can provide a more personalised quote as long as the information is safe and reliable.
With this in mind the day held in-depth discussions on cyber security, how we analyse our data and even artificial intelligence. Specialists from Microsoft, Filament, Profusion and Signal Media discussing artificial intelligence, UX, gamification and cyber security ran sessions that underlined how Fintech has come a long way recently. The thought leaders showed their excitement as they discussed the implications on everything from marketing to the future of the insurance industry.
What was immediately apparent was that the changing landscape of Fintech over the last few years and the introduction of GDPR are pushing both consumers and professionals alike to understand more about the importance of their data and how companies are using it. This is leading to a radically developing industry, with the change often led by the customer themselves who might want to ‘vote with their feet’ over what information they feel comfortable sharing.
In this sense, it’s the lack of understanding which is driving a new model. Dr Spyros Samothrakis, Assistant Director of Institute for Analytics and Data Science at the University of Essex said, “GDPR has forced people to unlock the black box of their AI – but for many they don’t have the knowledge to interpret the model and explicitly understand how it is profiling or behaving. Ethics and transparency are now becoming considerations for companies.”
There were some great stats shared about the growth of Fintech and intriguingly the rise of chat-bots. Indeed, Henrik Nordmark, Head of Data Science at Profusion, predicted that by 2020 over 85% of interactions from financial institutions will be via chat. Interestingly, he compared artificial intelligence to be at its most child-like stage.
Despite the capabilities to automate a lot of the customer interactions with financial companies due to the number of predicted outcomes (e.g. finding a quote, accessing details, reporting an error), he believed that we need to let our AI systems figure this out for themselves and not be so prescriptive. He said, “With AI it’s easy to give it a recipe book and it will learn all the systems from the top-down, but with machine learning we need a bottom up approach. Don’t give it a lot of examples, instead let it learn. Exactly like a child.”
As Hood Group is a specialist in the use of technology and data in order to create a truly personalised quote, the team were keen to look towards their own digital strategy. Especially the likelihood of fraud, something that is dominating industry talks as big data – and big data leaks – continue to grow.
Hood Group Business Development Director, Paul Firkins, commented on the ability Fintech gives to retain customers, not just attract them. “It also helps us find solutions”, he said.
“Since working with the university, we’re also finding that these data developments have a positive impact on our company culture – AI and data developments help improve efficiency, such as automating pricing processes and reducing admin tasks. Our teams are trusting data and innovation experiments to make decisions and recommendations where they might have previously relied on the knowledge of a specific individual or process”.
The role of security
Phil Winstanley, Development Manager at Microsoft, spent his session on the day explaining that IT isn’t just a desktop problem now. He said, “It’s an environment with interconnected and moving parts that all need protection.” He spoke of a large increase in the number cyber threats (costing on average a whopping $8m per successful attack in the UK) and explained that Microsoft has turned to big data to predict patterns and protect users.
Although Winstanley qualified this by suggesting that hardware is only part of the solution, he added: “More than half of all threats are internal by people using valid credentials, and that certainly makes it harder to solve. We still have to work with people and processes.”
Of course, there was also a generational consideration, the attitudes that younger people have towards their data, which Winstanley deemed ‘blasé’, means that businesses are having to change their own approaches to take into account the human consideration.
Exciting times ahead
Despite the hurdles facing companies from security threats and the complicated relationships users have with their own data, the overwhelming take home on the day was one of positivity around Fintech and its vast capabilities for change. Even growing with the users themselves.
CEO of Hood Group, Simon Hood, offers a sneak peak as to just how that information might be used. He said, “I’d like to extend a huge heartfelt thanks to the people involved in putting today together. It is something that both Hood Group and the University of Essex would love to replicate as we believe that times certainly need to change
“In our industry, the insurance industry, my company is known as a disrupter simply for using the data supplied by a customer themselves. We don’t believe this is disruption, we believe this is progress. And as long as we have the right methods in place to protect both ourselves and our customers, then the insurance industry can finally dig itself from out of the dark ages and start putting their users at the heart of it.
“They say that information is key, but without someone to light the torch and follow, we’d simply not know where to begin. So, I have to thank the people here today for shining a light, and hopefully this will allow us to continue on our path to putting the customer first.”
Both Hood Group and the University of Essex expect to complete further sessions as funding allows.