1111. Insights: Make a wish! What would you wish to change about Financial Services?

00:21:21 · S7, Sarah KocianskiPlay from here

[00:21:21] S7: Launching innovative payment products is only the beginning. Real progress comes from what happens next. Paymentology fuels continuous compounding momentum as a cloud native issuer processor, helping banks and fintechs grow beyond go live with global reach, local know how, and the power of its Loom platform. Powered by more than 500 paymentologists across 68 countries, they make card programs work naturally across markets. Want to keep the momentum going? Head to paymentology.com. [00:21:56] S4: Welcome back to Fintech Insider's most magical episode. But, of course, we're celebrating eleven eleven, and I've still got a few wishes left to grant. So let's turn our attention to what could come next. Benjamin, you touched on it at the end of the last segment, but your wish is that AI does customers more good than harm. If I could guarantee that wish came true tomorrow, what would financial services look like?

00:22:17 · Benjamin EnsorPlay from here

[00:22:17] S6: So I always think that artificial intelligence, particularly generative artificial intelligence, is a little bit like nuclear fission. It's an incredibly powerful technology that has immense power to do good, but also immense power to do great harm. We're in the place now where generative artificial intelligence, particularly combined with conversational AI, is going to be able to solve the last big remaining problem in retail financial services, is that many mainstream consumers don't get the financial advice that they need, which is pretty much bang on what Ross and Kate were talking about. So there's this enormous potential for this technology to really, really help millions of people take better decisions, you know, manage their investments more carefully, manage their spending more carefully, avoid bad decisions and so on. And you know, it's not going to fix the cost of living crisis. It's not going transform economies, but it can help individuals and families make better decisions. The tax systems in many countries are horribly complicated, and it's really easy for people to make mistakes that cost them or cost their families because they simply don't understand certain tax traps or certain tax tricks and so on. So there's this huge potential to do good. And yet at the same time, we are seeing bad actors, mostly organized crime, but in the future, it could be foreign state actors and things as well, Taking advantage of AI to trick and fool people out of their money, to propose all sorts of scams on a scale and with a speed that is just mind boggling. You know, I was reading just today about people who themselves have been trying to use AI through a VPN. And there are 8,000,000 people who were using a VPN through a broker, and that broker was intercepting every single thing they were putting into their AI and selling it on. And so there's this enormous potential for harm as organized crime takes advantage of AI to create more and more scams and frauds, you know, with unbelievably convincing video and, you know, starting to hack into our personal information so that there's a lot of social engineering in some of these attacks now, right? Bespoke socially engineered attacks. And so that creates this enormous possibility for harm that actually millions of people around the world will get scammed, will get hacked.

00:24:45 · Benjamin Ensor, Sarah Kocianski, Kate MoodyPlay from here

You know, we're seeing large companies, large banks, you know, getting tricked out of millions of euros because somebody is impersonating somebody else. And we simply don't have the systems and the processes to spot and stop some of that. [00:25:00] S4: I mean, I guess there's kind of we talked there quite a lot about the potential harms, but where is the greatest potential for AI to improve customers' financial lives, individual customers' financial lives? [00:25:12] S6: I think each person is going to be different. I mean, we talked about compound investing. Compound investing is so strong that, you know, persuading people to start investing, start saving in their 20s, if they can, would probably make... Might make the single biggest difference. But there's all sorts of things, you know, where people are missing out on allowances that they might get, where people are making bad decisions around sort of mortgages or credit or borrowing. So without having done a study of it, I can't tell you exactly where the biggest benefit might be, but I suspect it would probably be investing just because in terms of compounding over your lifetime, that's probably the thing that's gonna make the biggest long term decision. Maybe Kate's husband's spending, you know, maybe that could be better reinvested. Who knows? [00:25:55] S2: He's going to be so cross when he finds out that I've spent most of this episode just berating his shopping. Here we go.

00:25:55 · Kate Moody, Sarah Kocianski, Benjamin EnsorPlay from here

[00:25:55] S2: He's going to be so cross when he finds out that I've spent most of this episode just berating his shopping. Here we go. [00:26:02] S4: I suppose the way to sum both of those up is under the heading that we've talked about for an awful long time in financial services, which is personalization. So AI can personalize your services to whatever best suit your circumstances. And maybe this is the golden bullet that we've been waiting for for all these years we've talked about the p word. [00:26:20] S6: Bingo. Bingo. [00:26:22] S4: Kate, Ross, do you think the industry is currently paying enough attention to the potential downsides for AI? Too much attention to potential downsides? Which which way do you do you see the industry as as going at the moment, like as a as a whole, as an industry perspective?

00:26:36 · Kate MoodyPlay from here

[00:26:36] S2: I mean, certainly the stuff that I see, maybe I'm in a bubble of caution, but I certainly are seeing lots of you know, the big banks, big Fintechs talking very cautiously about you, yes, understand the opportunity but absolutely wanting to think through how they apply this. Obviously the regulator is playing a very important role in multiple different markets across the world and sort of tempering the speed at which some companies can move. So yeah, I definitely think the downs, I mean maybe the downsides are clear within the industry, whether the downsides have been met, potential downsides have been made clear enough to customers yet, guess is something to, is maybe probably more the point. I'm certainly from what we've seen it sounds like there is ever increasing adoption of AI by individual retailers or business consumers to ask financial questions, receive quasi financial advice. I don't really know if the downsides of those customers are being made clear enough, like whether they are fully understanding that likely we covered on our live after dark show one study that was showing a very significant proportion of those recommendations not being fully correct. Whether that is being surfaced to customers, whether customers aware of that, that if they take action on this conversation, where will the fallback be if something goes wrong if they don't achieve the outcomes they were hoping for? That's probably where the the biggest downside probably still exists. So I don't think it's probably being surfaced clearly enough.

00:28:03 · Sarah KocianskiPlay from here

[00:28:03] S4: That's interesting. And Ross, how about you? Do you we're in a finance bubble? Mean Perspectively.