Why Are Fintech Startups Focused on Bringing A.I to Finance?
By Joseph Yeung for BTC news
Since 2015, an increasing number of multi-billion-dollar financial institutions such as Goldman Sachs have exhibited their interest in emerging innovative financial technologies and startups.
Several major banks and financial organizations have established various investment funds for fintech and blockchain startups, to research the application of fintech and blockchain technologies in the financial market.
Blockchain technology focused startups have been the main attraction of these banks. According to the Outlier Ventures research team, there are over 1,000 blockchain startups in existence with most of the companies being backed by venture capital firms and financial establishments.
Despite having large capital offered by banks, blockchain startups have failed to display a real-life application of technology in the financial industry. These companies’ inability to cope with the expectations of the banks led to some changes in the fintech market, with some startups gearing towards the integration of A.I into financial technologies.
According to a report released by leading research organization CB Insights, more than 15 companies using A.I in fintech have secured equity funding rounds in 2016. Some startups secured a strategic partnerships with banks, web services companies, and internet corporations.
One of the most interesting category which venture capital firms are interested in is the personal assistants/bots category, in which companies use A.I to assist users with financial transactions, settlement, and information.
Cleo A.I for instance, utilizes an A.I-based texting service to allow users to gain information on their budget and latest status of their bank accounts, credit cards, debit cards, and many more.
Through the phone’s texting platform, users can simply ask Cleo A.I questions like “how much have i spent this month?” or “where have i spent my money this month?” and the application runs various algorithm to offer detailed insight of the user’s financials.
Other than Cleo A.I, CB Insights notes that “China-based WeCash, India-based CreditVidya, United Kingdom-based Aire and TypeScore, as well as California-based ZestFinance and Applied Data Finance,” have raised funds to focus on the development of A.I-based fintech solutions.