AI & Blockchain: Transforming the banking sector

With the world transiting to a digital economy, there is a strong movement towards using technology to make the payment processes faster and more transparent, providing a great impetus to the Indian fintech sector. It was, however, the Demonetisation Act in India that led to a spurt in the number of start-ups and technology companies taking a renewed interest in Fintech. In recent times, there has been a lot of interest towards companies that provide AI & Blockchain based solutions and platforms in the BFSI domain.

The advent of the bitcoin led to the recognition of blockchain as a transparent payment and documentation mechanism. With no third-party verification required and all transactions & documentation available on the public domain, blockchain has reduced the time required for transactions. Barclays recently executed an international deal for an Israeli agriculture firm on its blockchain platform, in just 4 hours as compared to the 10 days it used to take earlier.

Banks and financial institutions have been the first to realise the advantages of AI in helping them understand and forecast the demands of customers, while also making substantial cost savings. AI is used by these institutions for collecting and interpreting data, analyzing it and learning from it to improve their decision making. The Royal Bank of Scotland, for example, uses an AI interface Luvo to help address customer queries in a better and faster way. Luvo understands the customer's queries and searches through its vast repository of answers, to provide an acceptable solution to the customer within seconds.

India has been quick in adopting Blockchain technology in a big way. The government think tank, Niti Aayog has issued a 59-page policy document on the impact of blockchain and the sectors it can be used for. As per the CEO of Niti Aayog, Amitabh Kant “Governance in India faces unique challenges given the scale, diversity and complexity of processes involved for delivery of varied public services. Blockchain offers unique possibilities for addressing issues relating to improving governance.”

According to Niti Aayog, AI too can play a very important role in India, in the fields of Healthcare, Agriculture, Education, Smart Cities & Smart Mobility along with financial services. However, there are many challenges in adopting AI, due to the lack of enabling data ecosystems, inadequate availability of manpower trained in AI and the inability to transform research into functional market applications.

On the positive side, Alok Mittal, CEO of Indifi Technologies is sure that AI in the future is going to act as a core differentiator for fintech industry by offering major support in credit risk predictions, pattern recognition & fraud identification.