As new technologies emerge, they tend to enhance the existing ecosystem by converging with other technologies, eventually transforming various industries. Within the realm of Fintech, the two technologies that are on the verge of transforming it are Blockchain and Artificial Intelligence (AI).


Blockchain is a distributed database or a digital ledger that maintains a continuously growing list of data records that are hardened against tampering and revision. It is the foundation on which the popular cryptocurrency ‘Bitcoin’ is built upon. Like every other technology, it has its own set of pros and cons. Though in the nascent stages of its applications, Blockchain has been an area of keen exploration for both, startups and enterprises belonging to the finance industry and beyond.

According to White & Case, Blockchain could reduce banks’ infrastructure costs worldwide by $15 to $20 Billion a year by year 2022. Fintech influencers like Oliver Bussmann (Founder of Bussmann Advisory) says: “Blockchain is a game-changer that will have major impact on the financial service industry.”

Also, according to a few experts, the financial services industry can cut costs by as much as $12 Billion if Blockchain was to be fully implemented. “By the end of 2017, smaller companies will very likely want to meaningfully understand and plan for its applications as well. In short, the early signs of Blockchain’s promise will be felt in 2017,” says David Klein, Founder of Common Bond.

As per CB Insights, over 40 financial services firms or their strategic investment arms have invested in a Blockchain or Bitcoin-specific startup since the start of 2014. Their image below shows the acceleration of such startups since then.

blockchain financial services graphic

Microsoft and Bank of America Merrill Lynch announced a collaboration with the aim to “fuel transformation of trade finance transacting” with Blockchain technology using the Azure Blockchain-as-a-Service (BaaS). On the other spectrum, there are quite some Fintech startups that have already adopted the Blockchain technology, a few of which are listed below:

– Vault OS creates banks that run in the Cloud. It uses a centralised, permissioned cryptographic ledger as a single source of truth for all transactions. The ledger has Blockchain style digital signatures implying that all actions by each individual are publicly known.

– Abra allows you to send money from one consumer to another, which is accomplished 100% peer to peer via the Bitcoin Blockchain.

– LendingRobot is an automated hedge fund to buy credits from online lenders using Blockchain technology.

– T Zero is the world’s first Blockchain based trading platform that integrates cryptographically secure distributed ledgers with existing market processes to reduce settlement time and costs, increase transparency, efficiency and auditability.

Though Blockchain’s application is not limited to the Fintech industry alone, it extends to various other industries like Healthcare, Education, Insurance, Real Estate, Transport, Retail, Law, etc.
According to Danny Aranda, “2017 will prove beyond a shadow of a doubt that high-volume, small-value transactions are an important component of global payments, affecting the way we view trade and the number of people included in the financial system. Blockchain-based FinTech solutions are already enabling greater efficiency and certainty in these payments. Next year, proof will be in the volume.”

When it comes to new technologies, every one is in the testing waters to see how well it will integrate with the existing ecosystem. At Crowd Valley, with some of our select clientele, we’re undertaking global pilots to trial solutions using the Blockchain technology.

Artificial Intelligence (AI):

Simply put, Artificial intelligence (AI) is intelligence exhibited by the machines. Fintech companies deal with a lot of data points and put it into action but analyzing it, drawing insights and learning from the ever growing data to evolve, is where the role of Artificial Intelligence comes in, as it helps to make sense of the data and provide key enablements for the system to evolve. According to a recent Forrester report, Artificial Intelligence (AI) and the Internet of Things (IoT) are the two technologies that will provide Fintech companies with the most opportunity to grow and expand their levels of customer engagement by 2021.

While we interact with many products and services utilizing AI in our day to day lives, for example: Google Search, Apple’s Siri, Alexa Echo, Google Home, Facebook Messenger and other chat bots, etc. the application of AI in Fintech industry is still in testing waters. Arun Srivastava from Baker McKenzie states that, “A logical response by banks is to automate as much decision-making as possible, hence the number of banks enthusiastically embracing AI and automation. But the unknown risks inherent in aspects of AI have not been eliminated.”

The scope of AI will impact various key areas within the Fintech industry, like: customer support, reporting tools, data security, decision-making, etc. In financial services, AI will be deployed in the back-end to improve decision making and financial analysis while on the consumer facing side, it will transform the interface for human interactions with the software and the use of chat bots and voice systems for customer support, thereby lowering the costs. According to Ghela Boskovich, “The speed at which AI moves is based on the amount of behavioural data it consumes, and as APIs facilitate this accumulation of customer data, open banking is going to drive the development of better (or more ubiquitous) AI solutions.”

A PwC report claims that by 2020, AI will automate a considerable amount of underwriting,
especially in mature markets where data is readily available. Also, AI startups have raised more than $2 Billion in venture capital funding last year. By 2020, autonomous software agents outside of human control will participate in five percent of all economic transactions, according to Gartner. Robo-advisory services will keep evolving as the ability of AI to harness and analyze data improves manifolds. Following are some of the Fintech startups deploying AI technology:

– builds intelligent engines that analyze millions of pieces of data to help you make better financial decisions.

– Penny is a personal finance coach. It sends out tailored charts and insights to help you know how you’re spending in real time, within a chat interface.

– Aire is an algorithmic credit scoring engine that emulates the human intelligence of underwriters.

– Avant provides personal loans for debt consolidation or anything else.

Though Blockchain and Artificial Intelligence technologies have already begun paving the way for drastic transformation in the Fintech industry, only time will tell its mass adoption across the markets and usher into a completely new ecosystem whose rate of innovation will only accelerate at speed we’ve never witnessed before.