TECHNOLOGICAL

TRENDS IN FINTECH

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 1

INTRODUCTION
• So many technologies are involved in the fintech ecosystem. They
include:
• Artificial Intelligence (AI)
• Machine Learning (ML)
• Cognitive Computing Science
• Use of Robots and Chat-bots
• Internet of Things (IOT) in Banking
• Big Data
• Voice Biometrics
5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 2
 Artificial Intelligence (AI)
• Artificial intelligence (AI) technology allows computers and machines
to simulate human intelligence and problem-solving tasks.
• The ideal characteristic of artificial intelligence is its ability to
rationalize and take action to achieve a specific goal.
• AI research began in the 1950s and was used in the 1960s by the
United States Department of Defense when it trained computers to
mimic human reasoning.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 3

• Banks are now using AI algorithms to evaluate client data, identify
individual financial activities and provide personalized advice.
• This kind of individualized attention enables clients to make better
informed financial decisions, increases trust and strengthens customer
loyalty.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 4

 Machine Learning (ML)
• Machine learning allows banks to proactively monitor customer
behavior, identify anomalies in real time, reduce the probability of
false positives, and prevent fraud.
• In the banking context, machine learning can be used to generate
actionable insights using enormous databases that banks collect.
• Whether it’s a history of transactions, chat logs with bank
representatives, or corporate documentation, machine learning models
can help banks process and analyze this data to have a deeper
understanding of their consumers and internal processes.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 5

• With machine learning in banking, financial institutions can streamline
fraud detection, optimize credit underwriting, improve regulatory
compliance, and strengthen customer engagement.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 6

 Cognitive Computing Science
• Cognitive Computing Banking: cognitive banking is the technological
processes that rely on artificial intelligence to solve the problems
prevailing in the banking sector.
• Cognitive models strive on providing the most appropriate solutions
depending on the context based on consistent learning mechanisms
through feedback and experiences.
• The critical revolutions in the banking sector will hence shift towards
online banking platforms and artificial intelligence.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 7

• Cognitive computing systems can efficiently interact with data sources,
devices, and users because they are made to adapt to the evolution of
requirements and information changes.
• The adaptation is enabled by the ability to use human interface
technologies, natural language processing, and developed machine learning.
• Therefore, cognitive systems can handle situations that are dynamic and
information rich.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 8

 Use of Robots and Chat-bots
• Banking chatbots use artificial intelligence and machine learning to
respond to customer queries. By using natural language processing,
the chatbot facilitates a human-like conversation with a customer.
• Unlike human support agents, banking chatbots are available 24/7,
allowing customers to bypass long wait times. For any tasks a banking
chatbot can’t handle, it will refer the customer to a live agent.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 9

 What services can banking chatbots offer?

• Banking chatbots offer a variety of services designed to fit the needs

of both you and your customers. However, most chatbots focus on
answering basic questions like payment due dates, available financial
products, and customer spending habits.
• Some chatbots extend beyond answering basic questions, facilitating
loan applications, transferring funds, and sending money. Your
financial institution's needs will determine which chatbot services are
most beneficial.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 10

 Are chatbots in banking secure?

• Yes, banking chatbots are a secure form of communication for customers. If

you are concerned about security, use a chatbot that does not rely on
third-party providers. This ensures all data is kept in-house and is fully
secure from external threats.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 11

Internet of Things (IOT) in Banking
• The internet of things (IoT) is a vast global network of interconnected
gadgets.
• Through a network of sensors, these digital gadgets talk to one
another.
• Banks are implementing this technology with the objective of
providing their consumers with better service and also grow their
industry’s market.
• IoT has numerous fascinating and far-reaching uses in the banking
industry, and many new developments are still to come.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 12

• IoT in banking is the term used to describe the interconnected webs of
IoT devices that collect, transmit, and enable the processing of data in
a cloud or on-premise server to improve the banking experience for
both clients and bankers

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 13

 Big Data
• The banking industry has significantly transformed from
traditional brick-and-mortar establishments to modern
data-driven financial institutions.
• This shift has been propelled by the advent of big data
technologies that enable banks to analyze vast amounts
of data for better decision-making.
• This section delves into the evolution of big data in
banking, examining how it has become an integral part
of modern financial institutions and how it impacts
various dimensions like Volume, Velocity, Variety, and
Veracity.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 14

The Four Vs of big data in financial institutions
• Big data in banking is often characterized by the Four Vs: Volume,
Velocity, Variety, and Veracity. These dimensions highlight the
challenges and opportunities that big data presents:
• Volume. The sheer amount of data generated by banking transactions,
customer interactions, and other activities.
• Velocity. The speed at which new data is generated and processed to
meet real-time analytics needs.
• Variety. The different types of data, from structured data like
transaction logs to unstructured data like customer reviews.
• Veracity. The trustworthiness of big data is crucial for accurate analytics
and decision-making.
• These Four Vs have become the cornerstone for banks in leveraging big
data analytics, thereby revolutionizing various aspects of banking, such
as personalized customer service, fraud detection, and risk management.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 15

Examples of big data analytics in banking
• Big data analytics is not just a theoretical concept, but a
practical tool already making waves in the banking
sector.
• This section provides a few real-world examples of how
big data analytics is applied in various banking aspects,
from customer profiling to fraud detection and beyond.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 16

• Customer profiling
• Big data plays a crucial role in customer profiling within
banking institutions. Banks can offer individualized plans
and financial solutions by analyzing a customer’s banking
history and personal and transactional information, and
monitoring customer spending patterns over time. This
enhances the customer experience and enables banks to
differentiate their services, increasing customer
retention. Additionally, banks can target specific
products to customers based on demographic data.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 17

• Fraud detection
• Big data and statistical computing empower banks to
detect potential fraud before it even occurs. Specialized
algorithms track and analyze spending and behavioral
patterns, allowing banks to identify individuals who may
be at risk of committing fraud. Retail banks, investment
banks, and other financial organizations often have
dedicated Risk Management departments that can
prevent fraud and that heavily rely on big data analysis
and Business Intelligence (BI) tools.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 18

• Decisions on lending
• Lending decisions have traditionally been based on
credit ratings, which often provide an incomplete picture
of a bank’s customer database’s financial health. Big data
offers a more comprehensive view by using credit
scores, but also considering additional factors like
spending habits and the nature and volume of
transactions. This enables banks to make more informed
and nuanced lending decisions.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 19

• Compliance with regulations
• Big data analytics and BI tools significantly streamline the
process of regulatory compliance. These tools can
manage and track compliance, from tax obligations to
record-keeping with central banks. Compared to legacy
systems, which are labor-intensive and time-consuming,
the modern data architecture and BI tools simplify
compliance by consolidating information in an easily
accessible format, thereby reducing the risk of errors
and fraud.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 20

• Cybersecurity
• Banks are leveraging big data analytics and Artificial
Intelligence (AI) tools to bolster their cybersecurity
measures in the face of increasing cyber threats, to
include internal risks. These tools can track customer
behavior and internal activities, helping to identify
potential security risks. Moreover, banks can collaborate
with governmental agencies, sharing insights from their
BI and big data analytics tools to mitigate risks related
to financial terrorism.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 21

 Voice Biometrics
• Voice biometrics is a branch of biometric authentication that
focuses on analyzing and recognizing a person's unique vocal
patterns, such as pitch, tone, cadence and pronunciation.
• Each individual's voice is as distinct as their fingerprint, making
it an ideal method for identity verification for telephone
interactions where voice is the primary communication channel.
• This is true even for closely related individuals whose voices
may sound similar to the human ear.
• To create a voiceprint or AudioPrint, a voice authentication
system captures the caller's voice during an enrollment
process, which serves as a baseline for future comparisons.
5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 22
 Active vs. Passive Voice Authentication in
Banking
• With active voice authentication, a caller must repeat a specific
passphrase for a match to be accomplished. A common
example would be, “My voice is my password.”
• With passive voice authentication, the caller can simply speak
in natural conversation and a sophisticated algorithm will
match the characteristics regardless of the words (or the
language) being spoken.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 23

The Role of Voice Biometrics in
Banking
• Enhanced Account Security: Traditional authentication
methods, such as PINs and passwords or security questions,
are susceptible to breaches due to the rising sophistication of
cyberattacks and social engineering.
• Voice verification, on the other hand, provides an additional
layer of security that is extremely difficult for fraudsters to
penetrate.
• With voice authentication, bank and credit union customers
and members are protected from unauthorized access to
sensitive information and financial losses.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 24

• Frictionless User Experience: Voice biometrics streamlines the
authentication process, eliminating the need for callers to
remember anything or receive a one-time passcode (OTP).
• With just their voice, customers and members can securely
access their accounts, perform transactions, and interact with
the contact center agents, enhancing the overall user
experience.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 25

• Personalization and Trust: In a world where digital
interactions are becoming increasingly prevalent, consumers
often seek a sense of personalization and trust.
• Voice biometrics fosters this by recognizing individuals and
tailoring services to their preferences, ultimately building
stronger relationships between consumers and their banking
institutions.
• Voice verification recognizes consumers on the phone by their
voice instead of making them prove who they are with a minute
or more of Q&A.

5/1/24 SLIDES PREPARED BY DEBORAH ADU-TWUMWAAH 26