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Will 2021 be the year of AI in fintech?
27 September 20222020 has brought many challenges worldwide, in each country individually and in a host of economic sectors. Unfortunately, the pandemic completely overhauled all human activity: socializing with friends, traveling to cities, and even the way we spend our money.
Although the pandemic spread brought some bad news, there was also some positive in certain areas. One such is that the pandemic laid the foundation for the rise of technology companies, especially in financial services, due to the measures implemented to limit the spread of the pandemic and the potential risks from the use of cash.
It is generally accepted that 2020 was one of the most critical years for the fintech industry, as all consumers, households, and businesses all had to depend on the digital world much more than before. The demand for fintech services has never been more intense, a phenomenon that marks 2021 as a critical year for further developing the market.
AI is reshaping the industry value chain
Artificial intelligence is perhaps the most crucial technology of recent years. In 2021, fintech services are expected to use AI more widely than ever before: whether it is chatbots that address bank customer queries, fraud prevention tools that verify the authenticity of KYC documents (know your customer) or analytics machines that analyze large volumes of data, the fintech AI capabilities will continue to grow significantly.
Indicatively, in an article from last November at thefintechtimes.com (Fintech 2021: What Tomorrow Holds), many experts estimate that artificial intelligence is reshaping the industry value chain in various ways. “In 2021, we expect AI to become even smarter, with more sophisticated chatbots and advanced functionalities – including switching utility and credit providers – as well as fraud prevention, becoming the norm. This will improve the accuracy and personalization of financial services and enable individuals to better access personal finance products, ultimately improving people’s financial well-being and supporting those who are keen to stay on top of their finances during these uncertain times”, says Lubaina Manji from Nesta Challenges.
According to a survey conducted last June, the global AI-in-fintech market reached $ 6.67 billion in 2019 and is expected to grow to $22.6 billion by 2025 at a compound annual growth rate of 23.37{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}.
Especially in Africa, for too long, products and services offered in the region have been scoped based on assumptions and data from other markets. There’s enormous value in putting this wealth of data collected from the digital-first continent – where mobile financial services have been the norm for a decade in many markets – to use. For several years, Channel VAS has been investing heavily in AI and machine learning for the innovative services it offers. Channel VAS leans heavily on data science and will continue to do so, as data is one of the most integral parts of its business.
