Nanoxinja attended the annual South by South West Interactive (SXSWi) festival, in Austin this year. It’s one of the biggest in the world, with 73,000+ peeps descending on Austin, for the week-long series of future talks, tech demos and brand experiences. Much of the fintech-related discussion centered on the hot topics of democratisation of finance, the unbanked, biometrics, AI & blockchain. It’s always helpful to bring back lessons from around the world. Here’s what we learned.
Warning Xinjas, this article gets increasingly ‘meta’ towards blockchain & AI futures. Strap in. As buzz lightyear might say – to fintech futures and beyond! 😉
Theme 1 Democratisation of finance is happening in pockets
Despite major strides across the globe, SXSWi panelists cited Centre for Financial inclusion research, pointing out there still remains a large community that goes overlooked or priced out from financial services— low-income and minority communities. The BBC recently reported, a lack of bank account ‘costs Britons £485 extra a year’ in bills. Despite this backdrop, there were pockets of global fintechs, sharing how they’ve accelerated the democratisation of finance, in minority segments, using tech to reshape services that were once exclusive to banks and financial institutions. Fintechs changing the access equation were:
Oportun’s mission is to ‘create products that decrease suffering, & increase opportunity.’ Opportun give people loans $300-$9k USD, without prior credit history by relying on other data, such as how long a person has had the same job or home address. They report successful payments to credit bureaus which creates a credit history for the underbanked. So far Oportun has helped more than 600,000 customers establish credit scores, opening up their options for future borrowing. Oportun’s customers have saved an estimated $1.4 billion in interest and fees compared to the alternatives that are typically available to them.
Ladder is closing the coverage gap in the US, by making life insurance more streamlined, accessible and dynamically linked to other key pieces of your financial puzzle. Ladder makes it easy to transact by providing “an instant decision as opposed to waiting for the industry average of six weeks” – Jamie Hale, Ladder Cofounder CEO shared. Insurance packages can also decrease whenever customers choose they need less cover.
Steady improves financial outcomes for the freelance economy
Steady’s app helps its US gig worker community, to find jobs, increase their income and plan to stabilise income streams. When customer’s first sign up for Steady they have a “about 35% month-over-month income volatility” reveals Adam Roseman, CEO, Steady. Steady’s Income Tracker“focuses on helping freelancers improve the income side of the equation” whereas most PFM tools [Personal Finance Management like Pocketbook] are focused on expenses. Adam Roseman, CEO shared a member example in another talk –
“Say you’re willing to work a second job for ten hours a week, a lot of people don’t give that much thought and might just say, oh, I’ll just go and drive for Uber or Lyft or something and that will suffice, but what Steady is saying, let’s think about that, let’s try and maximise those ten hours to the utmost.”
Steady’s Income Tracker“focuses on helping freelancers improve the income side of the equation” – Adam Roseman, CEO, Steady app
Theme 2 Biometrics gets emotionally intelligent
In the release of its 2019 tech trends paper, the Future Today Institute (FTI) reported ‘mining biodata’ as an area to watch. “Advanced computing systems can now use our unique features—our bone structure, posture, emotional state—to recognise not only who we are, but what frame of mind we’re likely in. Quantifying and analysing our biometric data can reveal patterns in our activities— and as a result reveal a lot about who we are, what we’re thinking, and what we are likely to do next.” Some applications presented were:
Kia Real-time Emotion Adaptive Driving System (R.E.A.D.)
Kia debuted its R.E.A.D. concept car at CES in 2019—it’s a recognition system that adapts vehicle interiors to a passenger’s emotional state by using sensors to monitor their facial expressions, heart rate and electrodermal activity. The concept includes vibrating seats, responsive music and massage function to reduce road rage.
The BioCatch platform can effectively flag suspicious behavior and likely fraud attempts. Cognitive factors such as eye-hand coordination, applicative behavior patterns, usage preferences, device interaction patterns and responses to invisible challenges. Physiological factors such as left/right handedness, press-size, hand tremors, arm size and muscle usage.
Neuro ID tracks body language during loan applications
Another company, Neuro-ID, uses unique signals based on biometric monitoring to reveal a loan applicant’s real-time “digital body language.” The company uses proprietary technology to monitor metrics such as click hesitation, extra movement, idle response time, etc., to analyse how people respond to important questions.
Theme 3 Social Payments expansion continues across the ‘big 9’
WeChat and Alipay are significant players in the Chinese mobile payments space due to their highly developed network of merchants that accept chat-based payments, blurring the lines between sending money to a friend vs. sending money to a store. News coming from social payment companies surrounded the expansion into hardware and currency!
Facebook launched a blockchain research group in May 2018. The company has filed more than a dozen patents related to digital currency since 2007 but has yet to release a digital currency product. Facebook’s payments products include Messenger Payments and WhatsApp Payments.
WeChat Pay is testing a new feature which translates into “Friend Membership” which enables merchants to offer special deals and promotions to regular customers, according to Chinese media reports (in Chinese).
Theme 4 China is forging ahead in AI
China continues to surge forward, in artificial intelligence. China plans for AI to be worth 1 trillion yuan (US $146 billion) to the country by 2030, according to a World Economic Forum report. Fascinating AI advancements relevant for fintech were:
“It captures subtle changes in customers’ facial expressions which help to identify and warn against fraud risks,” – Lee Yuan Siong, Deputy CEO, Pin An.
Banks in China have embraced micro-expressions technology as they try to combat fraud earlier by studying the facial movements of customers. The technology developed at Ping An can pinpoint 54 brief, involuntary micro-expressions that a face often creates before the brain can control the movements of the face. In loan applications “it captures subtle changes in customers’ facial expressions which help to identify and warn against fraud risks,” Lee Yuan Siong, Deputy CEO, Pin An.
Robo-advisory bots help clients with algorithm-driven, automated financial planning. Xuanji, a robo-adviser platform Pintec is able to make suggestions on asset allocation in a full portfolio of mutual funds based on investment target and risk tolerance levels derived from a set of questions answered by the investors, powered by big data, quantitative modelling and machine learning.
Superior face detection
Technology giant Tencent open-sourced its face detection algorithm DSFD (Dual Shot Face Detector) which bettered current face detection benchmarks.
Theme 5 New Kids on the blockchain
SXSWi curated a number of talks where the hype and realities of blockchain were unpacked, with notable speakers pointing to ‘real’ projects and the possibilities of a future with blockchain. The Future Today Institute (FTI), reported “blockchain hit an inflection point in 2017. It evolved beyond Bitcoin, from a fringe form of digital currency, and broke into mainstream, as a revolutionary way to share and store information. While still developing, its broad and far-reaching applications have the potential to impact a range of industries.”
SXSWi Keynote, ‘blockchain godfather’ and Consensys founder Joseph Lubin shared success with i2i (island-to-island) finance project in the Philippines
Project i2i – Unionbank and Consensys, Enterprise Ethereum in action
Project i2i aims to enable and facilitate financial transactions in remote areas of the country. Project i2i, which stands for “island-to-island”, “institution-to-institution”, and “individual-to-individual”. It’s a platform to connect rural banks, traditionally excluded from mainstream payment networks and infrastructure, to each other and to national commercial banks. Watch how i2i has changed the Philippines here.
Ripio matches individual lenders and borrowers across the globe through ethereum smart contracts. “We have people from Asia funding people in South America, which is something you cannot do with another [app].” – Ripio CEO Sebastian Serrano. It gives the user credit history. Even if the marketplace disappears the code will continue to execute. Further, “the entire lifecycle of the credit and the loan” is contained in the smart contract on the blockchain.”
Blockchain Identity programs
Canada, Estonia, and India have all launched massive digital identity programs for their citizens; some are voluntary opt-in programs, others are compulsory programs like the Aadhaar program in India. Once these blockchains are in place, because of the “immutability” characteristic of this technology, it will be hard to ensure that citizens maintain some GDPR-era digital rights such as the right to be forgotten. Blockchain-based identity solutions could also provide documentation for the world’s 25 million refugees.
While some of this tech and business model innovation feels far off, there’s a way to go before we see widespread use, it certainly points to an interesting fintech future ahead. Are these on your fintech radar? Do these trends resonate in your world? Join the conversation here.
Sarah May is Marketing and Community Lead at Xinja.