Technologies like AI and blockchain are the most innovative technologies that have taken the business world by storm. With the introduction of Generative AI, corporate sectors are thriving and driving profits. However, the dynamic market requires a stable solution that is reliable, secure & automated. Blockchain technology filled the void with its unique build by providing a decentralized, immutable ledger to track, maintain, and store records of every transaction.
Industry insights from FnF research say that the global AI market is projected to reach USD 299.64 Billion in the year 2026. This depicts the limitless possibilities of AI in the business world and the ability to tap the global market in a short period. According to Findtsack, the global blockchain market will reach USD 67.4 Billion by 2026.
Financial sectors were among the early adopters of AI and blockchain and as of now, it has taken the Fintech industry by storm. AI has generated real-time insights from user data, given predictive analysis, boosted productivity, and delivered immense growth & stability to the Fintech industries.
Today we will look at how Blockchain & AI have helped deliver success to the Fintech industry and its possible future.
How AI & Blockchain Have Transformed the Fintech Industry
Fintech industries use innovative technologies for smoother delivery of financial services. Emerging fintech companies have already disrupted the market, by introducing quicker, simpler, and more efficient financial products in the palm of user’s hands. However, the dynamic fintech industry needed to evolve and adapt to emerging challenges & opportunities. Thus, they started to look for solutions in the Blockchain & AI.
By leveraging the AI’s ability to mimic human intelligence & automate tasks, conducting financial checks & credit decisions became a piece of cake. Blockchain’s distributed decentralized network offered them a system to record every transaction in a tamper-free, immutable ledger. Fintech companies have a stable, reliable, and secure environment for conducting daily financial tasks and with AI-generated insights, they have driven profit by understanding the lending market.
AI-Powered Fintech: The Force of Financial Revolution
India is a live example of leveraging technology in the finance sector. With a projected value of USD 150 billion by 2025, India has tapped into the fintech market through UPI. The large population of India has adapted to the evolving fintech market through personalized financial products. AI plays a crucial role in bridging the gap between the masses & technologies by learning from user-generated data. It taps into the unexplored sectors that are yet to study and derive meaningful relations between the industry & citizens. Through AI, fintech companies produce targeted advertisements to offer affordable, convenient, and personalized solutions to people. These services include mobile banking, user-tailored loans, insurance, wealth management services, and digital payments.
Here is the use of AI in the Fintech industry:
- Financial Literacy:
AI is helping the fintech industries by reaching out to the underprivileged & unbanked population of the country. This is done by providing them with digital identity verification, access to credit scoring systems, providing financial literacy through videos, and recommending safe financing guidelines. To quote an example, the FinaChatBot platform uses NLP & ML to deliver automated chatbot solutions for financial institutions. It is done by helping customers open digital bank accounts, apply for loans, browse insurance policies, and access other financial instruments.
2. Customer Experience
Implementation of AI in the fintech industry has improved customer experience and helped them avail state-of-the-art services. AI helps in resolving any arising issues of the customers, can get real-time feedback, and offers customer-tailored products. Keya from Kotak Mahindra Bank is a strategic implementation of AI in the fintech industry, that has resolved the queries of thousands of customers. Additionally, it has reduced human intervention, cut costs and drove profits for the bank.
3. Risk Management
Risk Management is another implementation of AI in the fintech industry to counteract fraud, identity theft, system hacks, and compliance issues. AI automates the risk management process by constantly monitoring the system, and banking networks, detecting anomalies, forcing intrusions, and enforcing banking regulations. This cuts the cost of the fintech industry, helps them make the system more secure, and reduces any dependability on the human agent; thus making the financial process simple, reliable & secure.
Blockchain-based Fintech: Implementing Secure & Reliable Transaction
Blockchain is one of the most outstanding technologies that the fintech industry has adapted to. The working of blockchain is simple, transparent, secure, and decentralized. This depicts that the transaction records in the blockchain cannot be changed once created and stay the same forever. Additionally, it prevents anyone from explicitly changing any data in the ledger as one change can affect the whole chain, making it immutable. The critical framework of the blockchain makes it a valued technological asset in the fintech industry. It offers them more efficient, reliable, secure, and innovative solutions to the evolving customer demands & business requirements.
Some of the highlights of implementing blockchain in fintech are:
- Decentralisation
Blockchain offers fintech companies a decentralized network that eliminates the use of third-party financial institutions. Eliminating, banks, brokers, and agents significantly reduces the transaction costs, delays, and risk for both the transacting parties. To consider an example, DeFi or Decentralised Finance is an evolving blockchain-based fintech system that eliminated the involvement of third parties and offered a platform for peer-to-peer transactions or any financial services. The Defi system allows organizations to borrow, lend, trade, and invest in assets without requiring any authorization from central institutions or intermediaries.
2. Transparency
Blockchain enables fintech companies to deliver a transparent transacting mechanism, that allows users to track, monitor & verify their transactions on the ledger. These features of blockchain in useful in building trust, and accountability among users. TradeLens platform uses Blockchain technology to facilitate global trade. The network connects shippers, carriers, customs authorities, and other stakeholders. The participants can track their goods, hold the accountable, improve the traceability of shipments, and minimize errors during the transaction.
3. Innovation
Blockchain offers fintech companies a colossal number of possibilities to innovate & explore. Fintech companies can build a marketplace for the trader, mint & sell NFT, work on developing & introducing new cryptocurrencies, and introduce innovative financial products in the market. There are endless possibilities for using blockchain in fintech. Many Fintech companies such as Instamatch have started their own money market platform that is based on blockchain technology. Companies like Binance & Open Sea are the real-time NFT marketplace where you trade in crypto. Blockchain provides fintech industries with more control and maintains user privacy without any regulation from a central authority.
The Future of AI and Blockchain in Fintech
AI and blockchain have been present in the market for quite some time. However, the adoption is relatively slower yet effective. These technologies complete each other and create a strong synergy that delivers growth & drives profits for the organizations. The fintech industry is an ever-expanding innovating industry that has to cater demands of the global population; hence requires a simple, fast, effective yet secure technological marvel. Integrating both these technologies can improve its scalability, security, and usability and curate an error-free & breach-free network for the organization. With passing time, fintech companies will implement global crypto policies and AI regulations to streamline their businesses for effective customer service.
Conclusion
AI requires bytes of data, high computing power, and human expertise to deploy highly trained models. Whereas Blockchain demands high coordination, standardization, and interoperability among participants. If the fintech industries can overcome these challenges, and offer citizens a trustable platform, then it is going to be the most profitable and booming industry in the upcoming times. Fintech companies need to adopt safe & ethical use of AI & blockchain, to deliver world-class financial service to the masses.
Nitin Gupta, the CEO of WebMob Software Solutions, is a visionary leader renowned for his innovative approaches to leveraging emerging technologies to transform businesses globally. Under Nitin's guidance, WebMob has evolved into a pioneer in fintech, catering to esteemed clients across Europe, APAC, and the Middle East. As a thought leader, he continues to drive WebMob towards new heights of success, cementing its reputation as an industry leader in the IT sector.
Chahat has a deep passion for leveraging blockchain technology to drive innovation and transformation. With over seven years of experience, she has been instrumental in guiding WebMob through the complexities of blockchain adoption. Her expertise and forward-thinking approach make her a key thought leader in the blockchain space, paving the way for a modern decentralized industry.