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Innovative technologies to transform the world

Being in the most disruptive period ever is the investment management history. But a new wave of disruptive technologies being introduced, the concept of investing is being transformed from a practice of self-driven only accessed by the affluent few to a democratized audience. This served a much broader customer base. And now the demand for digitized, convenient financial services has soared. But the opportunities to participate in exciting investment opportunities can be achieved with just a few taps of a smartphone. And this game changing technologies is nothing but Artificial intelligence. Having the capacity to transform the most and to improve the investing process. AI mostly refers to using the computers to simulate intelligent behavior that which is comparable or even superior, to that of human mind. And when one looks around, it’s clear that those computers have not only arrived but are now changing the world in dramatic ways. Be it through robotics performing life changing medical and surgical procedures, or AI powered chat bots giving out easy and instant solutions or the self-driving cars which are minimizing the road accidents and the list goes on. AI has been beneficially improving the quality of our day to day lives.  And the same goes with investing too. Implementation of AI in this sector to make faster, smarter and more profitable investing decisions. “Investing is the ultimate numbers game, and smart number crunchers tend to be good at it. So, artificial intelligence as a high-capacity data processor stands a good chance at revolutionizing the investment industry.” expressed Daniel Seiler, head of the Multi Asset Boutique at Vontobel Asset Management.

An application of AI, ML involves utilizing data to learn, adapt and improve investment decisions without needing to be explicitly programmed to do so. Machine learning ( ML ) is probably the most exciting aspect of this revolution. Formulating various algorithms, exposing them to substantial volumes of relevant data such as historic market prices and transactional data ML systems can be trained to quickly identify security mispricing and market inefficiencies. But cultivating this automated environment is easier said than done. Even though the learning process can be slightly difficult but the techniques can be successful in predicting future market opportunities. ML is now beneficial in accessing the actionable real-time information from often voluminous amounts of data to better inform investors of the appropriate decisions to take.

In September 2019 a report by the CFA (Chartered Financial Analyst) Institute, which examined the trends and use cases of AI and big-data technologies in investments, included a survey designed to understand the state of adoption of different technologies in the workflows of analysts, portfolio managers and private-wealth managers. Few investment professionals are currently using programs typically utilized in ML techniques, including coding languages such as Python, R, and MATLAB and that most portfolio managers continue to rely on Excel (indicated by 95 percent of portfolio manager respondents) and desktop market data tools (three-quarters of portfolio manager respondents) for their investment strategy and processes. Sadly only 10 percent of portfolio-manager respondents were recorded to “have used AI/ML techniques in the past 12 months, and the number of respondents using linear regression in investment strategy and process outnumbers those using AI/ML techniques by almost five to one.

“Just as smartphones went from novelty to necessity over the last decade, voice interfaces like Amazon Alexa are quickly becoming more pervasive as people grow more and more comfortable using them,” Sunayna Tuteja, head of strategic partnerships and emerging technologies at TD Ameritrade, stated upon Alexa’s introduction in October 2018.

Combining technologies like artificial intelligence (AI), machine learning and voice user interface can be the smartest solution for these fintechs! AI can offer an almost entirely new perspective on the investing process.

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AI role in customer experience in banking

The concept of banking first sprung up around 8000 BC. Then, there came various drastic changes to expand their services and innovate their business models. Artificial Intelligence (AI) and Machine Learning (ML) are applied to help banks and financial institutions nowadays. A survey by the Economist Intelligence Unit (EIU) showed that 77% of banking executives believe that the use of AI will ultimately differentiate between winning and losing banks.

This pandemic has triggered a sudden socioeconomic shift from physical to digital. There is a rapid switch to digital channels. Recent research by YouGov was conducted in June 2021. And that revealed that digital services have become the de facto way of conducting business and access services during the pandemic. EIU’s survey showed that enhancing the user experience through better personalisation ranked first in the most valuable uses of AI.

Customer propositions are no longer fit-for-all. It involves both banking and non-banking products and services. To identify the customers’ needs the banks must take an entirely new approach to innovation. They should adopt a customer-centric view. This starts with understanding the customer needs. AI makes it much easier to analyse customer preferences. The redesigning of customer loyalty program gives banks an accurate understanding of customer. Effective personalization offers customers not only better leads but also a more unique experience. The customer experience can be improved by applying AI. Banks must also build out their capabilities to strike new partnerships.

Businesses across all industries are working hard to retain their customers, including banks. AI can become a banking institutions’ superpower. This can take the customer experience to new heights, resulting in happier and more loyal customers. It will also reduce a bank’s operating costs and enable increased revenue per customer. To become AI First, banks must focus on streamlining their technology layer. They also require a strategy to engage customers through channels owned by them and their non-banking partners. Business and technology must work hand in hand, with cross-functional teams breaking up organisational silos.

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Amazon to offer insurance to UK businesses

The technology giant’s first foray into business insurance in the country, broker Superscript said that Amazon is going to start offering insurance to small and medium-sized UK business customers. Members of Amazon’s Business Prime program will be able to buy cover from superscript such as contents insurance, cyber insurance and professional indemnity insurance. Superscript spokesperson said that those would be underwritten by major UK insurers. A discount of 20% will be offered to current rates. This is to entice the businesses over to them.

50% of customers are prepared to buy insurance from non-traditional players. A recent survey of 12,000 people globally by consultants Capgemini showed this. Cameron Shearer, co-founder and CEO of Superscript, said in a statement that the insurance industry needs to bridge the divide between insurers and customers. Amazon’s move into UK business insurance comes after U.S. insurtech Next Insurance said that it was offering cover to U.S. small businesses. And that too via Amazon Business Prime. Molly Dobson, Country Manager for Amazon Business UK & Ireland, said in the statement that as the businesses come out of the pandemic, they want customers to have the best-in-class tools to run their business.

Financial institutions are worried that tech firms will steal their business. But industry sources said that the insurers and tech firms are more likely to forge partnerships. Because of the given difficulties and expense for outsiders in entering the highly regulated finance sector. Amazon also offers warranty insurance and “buy now, pay later” services in Britain.

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In NFT fantasy soccer game, SoftBank leads funding

Blockchain-based fantasy soccer game Sorare has raised $680 million. This is through a funding round, which is led by SoftBank. According to the company, it includes players such as ex-England international Rio Ferdinand and Spain’s Gerard Pique. Paris-based Sorare said that the investment valued the company at $4.3 billion. Sorare is an online game, since 2018. Here players buy officially licensed cards that represents soccer players. They can build teams and play against each other. This is based on the players’ performance in real-life games.

The cards are traded in the form of non-fungible tokens (NFTs). The market for NFTs has seen major growth in 2021. Michel Combes, president of SoftBank Group International, said that they think NFTs represent a new paradigm in the collectability, usability, and engagement with assets. This evolution from physical assets to digital assets is very powerful. This also creates a lot of exciting potential business models. NonFungible.com is a website that tracks NFT market data. According to them, Sorare is the largest sports-based NFT platform by sales volume. They are planning to open an office in the United States. So that they can expand into other games out of Sorare.

Nicolas Julia, CEO and co-founder of Sorare said that they saw the immense potential that blockchain and NFTs brought to unlock a new way for football clubs, footballers, and their fans to experience a deeper connection with each other. They believe that this is a huge opportunity to create the next sports entertainment giant. Since January 2021, there have been $150 million of sales on Sorare. The fundraising round was SoftBank’s first time investing in Sorare. SoftBank’s Latin America fund also contributed. Other investors in Sorare’s raise are such as venture capital firms Accel and Bessemer Ventures, Pique, Ferdinand, Antoine Griezmann and Spain’s Cesar Azpilicueta.

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