Marieke Saeij, CTO, Onguard
Blockchain, the name itself oozes robust, professional connotations. However, nothing about this technology has yet been truly defined. Finance professionals are either intrigued by its potential or somewhat hesitant to jump on board over fears that it poses more of a threat than a solution.
With the general lack of knowledge on the subject, it seems only few have an insight into the future potential of this technology and how exactly it can be fully utilised. Similar to the internet back in the 1970’s there were a group of people regarded as “in the know” who realised that the internet had great potential and was going to be huge in the future, they just didn’t know how. For instance, the original founders were unlikely to have thought that a little over three decades in the future that we would be able to use this internet in our daily lives, let alone for ordinary activities like ordering the weekly grocery shop.
It’s a huge testament to the industry that even in these early stages that few are ignoring Blockchain. Our own research has shown that 87% of CFO’s are looking into Blockchain however, on the other hand, 36% have admitted that they do not understand enough about it to act just yet. For the larger financial institutions of today, Blockchain is often described as more of a challenge than a potential opportunity. This is purely buoyed by the fear that the arrival of this new technology will render banks obsolete in the facilitation of secure document transfers. Instead, they will be left looking for new revenue streams to offset this loss of income.
In spite of this, there is evidence that some of the larger banks are collaborating on Blockchain applications, this is because of how closely tied Blockchain is to various crypto currencies. On the whole though, the development of Blockchain is very much a watch and wait to see what happens. Just like the CFOs in our survey and these financial institutions, here at OnGuard we are rolling out our own investigation, monitoring developments and watching to see how Blockchain can help businesses in the field of credit management.
It may seem like a waste of time, especially when currently the whole issue seems too ephemeral and uncertain however, we are certain that Blockchain will be a very important development, we have been following it in relation to Bitcoin, smart contracts and predictive analysis.We are also investigating in terms of efficiency benefits, such as fewer errors and reduced administration costs. The potential for removing the transactional element of a deal in favour of a simple exchange across distributed general ledgers has great promise.
We also believe that Blockchain will be extremely interesting in the order-to-cash market. Yet we first need to ascertain, whether it is secure. Do we understand the legislation and laws around it? These are crucial elements to tackle before we can recommend this solution to our list of global clients.We have a vibrant group of developers and architects looking into what is happening and feeding it back into the organisation to enhance our own knowledge.
The consensus is that there are still several known obstacles to overcome, and possibly more unknown issues, before the Blockchain vision becomes a reality. Service and solution providers will need to play their part in the future of this disruptive technology with special attention when developing expertise, taking the time to explain the technology in detail and in helping to reassure customers about issues around security or regulation, for example.
It’s not just a case of nobody quite knowing how Blockchain will impact the market. It’s also an extremely complex technology, with many definitions floating around the industry. It’s no wonder that 62% of businesses we polled currently have open vacancies for Blockchain experts.
Our advice then? Definitely speak to the experts, those that have been observing and researching Blockchain before making any changes to your current infrastructure. Blockchain will happen and it will bring benefits, but those businesses that are properly prepared and willing to make changes will reap most of the rewards.
AI: Do the Right Thing
By Alix Melchy, Jumio VP of AI
The application of emerging technologies such as AI, cloud, blockchain and IoT in financial services has altered the traditional operating models of financial institutions, the competitive dynamics of the industry, the role of people in those institutions and the landscape of the financial system as a whole. In fact, AI is positioned as an essential investment, with the World Economic Forum arguing how it is set to become central to the fabric of financial institutions.
While the adoption of AI in financial services may be in its infancy, the use cases are ever growing. From recommending loan and credit offerings to detecting fraud, 94% of financial services in European and Middle Eastern markets believe that AI will disrupt their business. The direction and the awareness of AI is clear but it is essential that companies invest now, as if done too hastily, the process is marred by pitfalls.
Despite the transformative promise of AI and machine learning algorithms, we have seen its application come under scrutiny in other industries. Take the UK A-Level exam grading debacle that dominated headlines back in August. Exam grades of students living in certain UK postcodes were disproportionately and negatively impacted, while other students saw their results inflated. This was down to an algorithm implemented by Ofqual that was set to predict grades using historical data including grades obtained at exams in previous years.
The incident raises the question as to what would happen if the algorithm used in this instance was applied to a financial decision. The same biases could negatively impact the way millions of consumers and businesses borrow, save and manage their money.
It is therefore imperative that financial institutions learn from this scenario, ensuring that when implemented in financial decision-making, AI is nothing short of a success.
AI is no fairy godmother
While many tout the game-changing effects of the looming AI revolution, it’s fundamentally important to understand that AI is not magic. Instead, we need to learn to set reasonable expectations with AI so not to paint an unrealistic picture of its power.
In order to start out on the right track, businesses must first define and align on the task they want the algorithm to perform before it can be developed and implemented. Articulating the problem to be solved is the prerequisite for a solid framework of development and evaluation of your algorithms.
Removing bias in AI
AI is the tool, not the hand that wields it or the eye that guides it. It is a type of learning system that requires data, training integration, and course correction. Just as we would train a young engineer to use a tool correctly, we are training AI systems to become expert learning systems through the data, process and people.
Therefore, in order to solve a problem using AI, the task must be expressed in a form which a machine can understand and the machine must be supplied with the necessary data to perform or otherwise learn to generate predictions that enable it to accomplish its objective. Without strong and relevant data underpinning an AI model, it will never be able to produce strong and relevant results.
To design a fair algorithm, the key is to collect a sufficient amount of data so that the algorithm can be trained to represent an entire community. While it is possible to buy datasets to speed up the process, when doing so, it is essential that the data meets your required criteria rather than simply being a large data set. For the financial services sector, this enables employees to treat customers fairly and, when combined with appropriate modelling and processes, allows them to maintain transparency and accountability in their decision-making processes to avoid legal claims or fines from regulators which can cause deep reputational damage.
Building back better
As the Ofqual issue revealed, a preliminary, small-scale algorithm test is an essential step before applying it into a real-world scenario. A pilot testing phase will help a business to amend the design to identify unnecessary costs and time expenditures, while also better understanding the data. As this was not sufficiently done in the Ofqual case, the algorithm simply did not provide the right answer to the problem it was trying to solve.
Championing ethical AI
More than ever, companies are realising one simple truth: failing to operationalise data and AI ethics is a threat to the bottom line. Missing the mark can expose companies to reputational, regulatory and legal risks. Here are some key areas that businesses should consider when leveraging AI models:
- Usage consent: make sure that all the data you are using has been acquired with the proper consent
- Diversity and representativity: AI practitioners should consider how diverse their programming teams are and whether or not they undertake relevant anti-bias and discrimination training. This will draw upon perspectives of individuals from different genders, backgrounds and faiths which will increase the likelihood that decisions made on purchasing and operating AI solutions are inclusive and not biased
- Transparency and trust building: accurate and robust record keeping is important to assure that those impacted by it know how the model works
The ways AI can be utilised in the financial services industry is increasingly growing. An example is the use of document-centric identity proofing space whereby an identification document, such as a passport, is matched with a selfie of the user to confirm real and virtual identities. This will be an essential area of focus for financial services companies as they look to confirm that users are who they claim to be when the physical branch is diminishing. When analysing if a person is the same as the picture on their documentation, for example, a biased AI model can completely undermine the decision made.
However, it’s reassuring to see that the 2020 Gartner Market Guide for Identity Proofing & Affirmation predicts that by 2022, 95% of RFPs will have introduced clear requirements around minimising demographic bias. This demonstrates how organisations are now becoming more aware of the detrimental impacts that demographic bias in the performance of identity-proofing processes could have on their brand as well as being clear on the legal consequences they risk facing.
In turn, there is a real opportunity to leverage AI solutions to provide the best service, but financial institutions must ensure that they are doing so in an ethical, accurate, and representative way.
SFF x SWITCH 2020 to Feature 40 Global Satellite Events and 24-Hour Online Experience
The Monetary Authority of Singapore (MAS) and Enterprise Singapore (ESG) announced today that more than 40 global satellite events will take place across the world as part of the Singap ore FinTech Festival (SFF) x Singapore Week of Innovation & TeCHnology (SWITCH) 2020.
- To be held from 7 to 11 December, SFF x SWITCH 2020 will feature a unique hybrid format that combines a 24-hour online event platform with global satellite events around the world. This new hybrid model will provide participants with greater access to the global FinTech and deep tech communities who are looking to discover partnerships, draw investments, and boost sales cycles.
- SFF x SWITCH has worked with a network of global partners to host the global satellite events (refer to Annex A). They comprise physical events in selected cities in accordance with local safe distancing measures as well as digital-only events. They will bring together content from innovation hubs and tech showcases around the world, and provide in-person attendees access to networking opportunities with industry leaders and sponsors. In collaboration with MAS and ESG, SingEx Group will manage the physical and digital experiences for attendees and ensure a seamless execution of the FinTech and innovation showcases across the cities.
- SFF x SWITCH will feature a 24-hour online experience over five days. This online event platform will feature a digital city, supported by partners including Accenture, Microsoft and Pico Art International. The digital city will feature more than 800 speakers from around the world, including leaders in finance and technology, entrepreneurs, policymakers, and officials from multilateral agencies. Participants can access live content broadcasts running round-the-clock and on-demand sessions. Some of the confirmed speakers include:
- Dr Abhijit Banerjee, 2019 Nobel Prize in Economics, Ford Foundation International Professor of Economics, Massachusetts Institute of Technology (MIT)
- Kristalina Georgieva, Managing Director, International Monetary Fund
- Guo Shuqing, Chairman, China Banking and Insurance Regulatory Commission
- Hong Feng, Co-Founder and Senior Vice President, Xiaomi
- Arianna Huffington, Founder and CEO, Thrive Global, Founder, Huffington Post
- Sallie Krawcheck, Chief Executive Officer & Founder, Ellevest
- Satya Nadella, Chief Executive Officer, Microsoft
- Nandan Nilekani, Co-Founder and Chairman, Infosys
- Henry M. Paulson, Jr, Founder and Chairman, Paulson Institute
- Sundar Pichai, Chief Executive Officer, Google and Alphabet
- Dr Raghuram Rajan, Katherine Dusak Miller Distinguished Service Professor of Finance, University of Chicago’s Booth School
- Eric Yuan, Chief Executive Officer and Founder, Zoom
- Albert, Co-Founder, Traveloka
- Dr Chi Youngcho, President and CIO, Hyundai Motor Group
- Timothy Draper, Founding Partner, Draper Associates
- Arvinder Gujral, Managing Director SE Asia and Senior Director Business Development – APAC, China, Australia, Twitter
- Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise
- Lei Ming, Co-Founder, Baidu; Former CEO and Founder, Kuwo Science and Technology; Founding Partner, AIBasis Ventures
- Henry Ma, Executive Vice President and Chief Information Officer, WeBank
- Candice Ong, Chief Commercial Officer, ShopBack
- Lars Reger, Group Chief Technology Officer, NXP Semiconductor Germany GmbH
- Professor Sir Adrian Smith FRS, Institute Director and Chief Executive, The Alan Turing Institute
- Professor H.S. Philip Wong, Willard R. and Inez Kerr Bell Professor in the School of Engineering, Stanford University
- Ye Gang, Group Chief Operating Officer, Sea Ltd
- The SFF Global-Common Channel will feature five global summits on the themes of: economics, infrastructure, impact, investor, and talent. They will focus on driving cross-border commercial activity to support pandemic recovery, and how financial institutions should position themselves in 2021. The SWITCH Global Channel, curated by SWITCH’s global innovation partners (refer to Annex B), allows participants access to market knowledge, opportunities, insights and tips on business culture from over 42 cities in 31 countries across Africa, Asia (China, India and Southeast Asia), Europe, Middle East, North America and Northeast Asia & Oceania.
- A digital map will show all SFF x SWITCH activities across Singapore, with dedicated zones for various activities, including an international zone, early stage and growth stage FinTech zones, talent zone, technology showcase zones, and a networking zone. Participants will be able to visit locations on the map via a searchable and interactive directory of organisations and activities, tailored to their interests and profiles. Participants can meet and network with attendees on the event platform and schedule 1-on-1 meetings, by leveraging on the platform’s business matching functionality.
- Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “The global pandemic has led to a reimagination of how we can deliver SFF x SWITCH as a global platform. To recreate the connectivity, collaboration and networking that have become the hallmarks of SFF x SWITCH, this year’s unique hybrid format will break new ground to create a truly global and inclusive event for the FinTech community. We are delighted to work with key global partners to deliver over 40 global satellite events for attendees across the globe, and Microsoft and Accenture to design this first-of-its-kind global platform for the FinTech community to innovate and forge new connections, anchored on the delivery of a powerful, new digital experience at scale.”
- Edwin Chow, Assistant Chief Executive Officer (Innovation & Enterprise), Enterprise Singapore, said, “While SFF x SWITCH is being run in a new, unprecedented way, our aim to enable networking and collaboration has not changed. In fact, we are very pleased to see that SWITCH has attracted even more global innovation partners this time, with established names such as 500 Startups, Sunway Group and VinaCapital joining us at various thematic panel discussions. This digital format not only enables the deep tech and innovation community to access deep market knowledge; it allows us to connect across geographies and time zones at a much faster pace, making this event a truly global one.”
- “Together with our partners we’ve designed the entire customer journey identifying critical touchpoints for optimal experiential engagements, paving the way for a bold new format that’s driven by customer insights. We’re proud to be the nerve centre for SFF x SWITCH orchestrating the global event experience across the satellite cities, online and offline, through our hybrid events studio in Singapore as well as robust capabilities in content, digital and operational excellence. We look forward to showing the world a new standard of audience engagement made possible with our established network of community partners from around the world”, said Aloysius Arlando, Chief Executive Officer, SingEx.
 The digital map will feature dedicated areas for various SFF x SWITCH activities, comprising the SFF x SWITCH Content Channels, International Zone, MAS Zone, Sponsor and Exhibitor Zones, Early Stage FinTechs Zone, Growth Stage FinTechs Zone, APIX, Talent Pavilion, Blockchain Zone, SME Zone, SFF AI Summit @Bridge+, Networking Zone, SWITCH Village and SG Blockchain Village.
Leumi UK completes core banking upgrade with Finastra
Multi-specialist bank Leumi UK improves customer experience and streamlines processes with updated technology
Leumi UK, the London subsidiary of Israel’s largest banking group, has selected Finastra, one of the world’s largest fintechs, to upgrade its core banking systems.
For Leumi UK, this is the culmination of an extensive bank-wide programme to boost the efficiency of internal processes. The upgrade provides a solid foundation on which to make further improvements to the speed and functionality of Leumi UK’s processes.
The enhanced core banking system is a fundamental component of Leumi UK’s new IT strategy, as defined by Chief Technology Officer, Alon Shmuel. This will enable the bank to focus on business growth, as it builds momentum in its specialist areas of hotel and property finance. With this latest technology in place, it is now better equipped to onboard new business and ultimately improve the overall customer experience.
Alon Shmuel, Chief Technology Officer at Leumi UK, says: “This upgrade is part of the promise to our customers to constantly build upon the services and solutions we offer. Thanks to Finastra, we can ensure that we are using the latest software and most up-to-date technology to provide an even better, faster service to our customers. We are very grateful to Finastra for the expertise, dedication and professionalism they exhibited as we undertook this ambitious endeavour together. Their support allowed us to complete the project in under nine months, despite the challenges we faced from the Coronavirus pandemic.”
John Mitchell, Vice President Global Services Europe at Finastra said, “Finastra has worked hard to deliver a robust services strategy that enables us to support customers, like Leumi UK, and help them to achieve their goals, whether for a new implementation or a core upgrade. This is particularly crucial with current restrictions preventing us from being on the ground with our customers. We are delighted to support Leumi UK during its transformation and pleased that we were able to complete the project together ahead of schedule. Our collaborative working relationship was a significant mitigation to the challenges faced with the onset of the pandemic.”
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