Wired’s Greg Williams is joined by Joern Leogrande (Wirecard), Juergen Schmidhuber (AI Lab IDSIA) and Alexander del Toro Barba (VisualVest) to talk about the advances of artificial intelligence and its impact on the financial sector.
How is artificial intelligence impacting fintech? While artificial intelligence and machine learning are not new to the financial sector, the computational advances, data availability and the decrease of cost have led to new opportunities utilizing these modern techniques to provide better services for banks as well as customers. Examples are fraud detection, portfolio management as well as chatbots that can help you with your financial planning, Alexander explains.
Payments will increasingly become invisible, Joern adds. We see that for example with Uber. Google payments already uses a combination of wifi tracking, beacon technology and face recognition so you can pay without any cards. There is a lot of machine learning involved. The systems are now trying to define your facial identity so that even if you change your look, it will still recognize you.
From mobile to AI first
The panelists talk about how deep learning has changed the playing field and we are already seeing a shift to an "AI first" world. The artificial neural networks of computers are now close to what the brain can do, Juergen states. The main driver of the commercial success of these technologies in recent years is that every 5 years computers are getting faster by a factor of 10 for the same price. This trend has held much longer than Moore's law, since at least 1941 when Zuse build the first working program-controlled computer. This means, today – 75 years later, we have a million billion times more computer power for the same price. If the trend doesn't break, we will soon have little devices like smartphones that can compute as much as the human brain. "In 50 years, you will have a small device for the same price that can compute as much as all 10 billion human brains of all human kind together – and there won't be just one small device but many of them."
So computer powers will expand enormously. How will financial services change?
Users like convenience, but they don't want everything at just one provider. So we will see a concentration on a few providers that will provide umbrella apps everything else is channeled trough. Bots will become better in assisting people building their portfolio. There will be a loss of physical elements within the payment process. Banks will collaborate with fintech companies and we will see more hybrid solutions within the next five years.