Fintech, the use of technology to support or enable bank and financial services, continues to evolve and its use grows. technology used to support or enable banking and financial services.
In 2018 alone, more than $50 billion was invested in development of the industry in the U.S.
There’s no better time to look at prominent and emerging trends than now, not only the start of a new year, but the start of a new decade.
● Financial research underpins progress. When it comes to honing and modernising information processing, the creation and use of financial research has lagged far behind the consumption of material in other financial services areas. On a daily basis, a bank produces and receives thousands of pages of research on everything from the global economy to any particular company’s share price. Currently, however, sales/trading desks and portfolio managers’ primary tools for extracting the relevant insights from this deluge of information is an inefficient and slow search through an email inbox or via traditional research portals that rely upon classic full-text search techniques which were not designed for this type of content.
● More need for actionable insight. In the financial services arena, tightening regulations and increasing cost pressures mean that market participants will need to trade in ways that are smarter – and more effective than competitors – and this will require gaining the best insights. Smarter trading will add intrinsic value to a company’s own processes and provide a better financial offer to clients, and therefore lead to an overall competitive advantage in any given financial services sector. The irony is that investment banks and other financial services institutions are sitting on large repositories of unstructured information, but they don’t always know how to use it. It is a bit like owning a library but not knowing which shelves contain the books required to find the right material. New tools are needed to assess information and create real insights enabling the user to optimise decision-making, for example to carry out a trade or not. The goal is to discover what is relevant in a quicker and more effective way.
Moving forward with AI and Rich NLP. Instead of thinking about a research report in its entirety, the challenge is to understand a document as a series of interrelated insights and details, some of which will intersect with other potential areas of interest and additional articles.
As such, the area of financial research is ripe for change in the coming years. Applying Rich NLP – natural language processing — and machine learning technologies to research will provide a smart and ever-increasing matrix of knowledge. By tagging each and every paragraph of every document in context in real-time, a body of research can be transformed from a series of unstructured documents sitting in a digital library into a huge and complex web of granular pieces of tagged information. This ‘document atomisation’ will unlock the value buried deep within the research without requiring the analyst to change how they write or publish their articles.
Once the insights in the research have been atomised it opens opportunities that previously seemed out of reach. One of the main benefits is increased personalization so that each and every individual market participant can receive and access financial research that is tailored to granular needs.
- Embedded fintech. The idea of embedded fintech is the increasingly ubiquitous presence that will soon shed its form as a standalone product and emerge as an integrated feature of other products. As an example, the debut of Apple Card, Amazon Pay, and just last month, the launch of Facebook Payconsolidates the status of fintech. Meanwhile, Target and Shopify are planning to offer similar financial services and products.
The ability to harness information relevant to any given market with pinpoint accuracy will be the way forward for financial players in 2020 and beyond. One thing remains constant: fintech will continue to fill the void for people and communities without access to traditional finance services but perhaps, with a new look or two.