October Fintech Trends according to Bloomchain.
What’s happening in the voice trading market, how fintech startups can get money and expertise, and why US Bank and Unicredit are laying off employees – in our material.
Trading gets votes
The Russian Ministry of Finance intends to regulate the voice interface. The agency is concerned about misseling and consumer abuse. Misseling refers to offering one product under the guise of another. For example, when bonds are sold to clients instead of deposits.
Development company Neuro.net recently calculated that 50% of Russians surveyed by it are ready to make financial transactions in mobile applications using bots. However, it’s not just about banking products: assistants that not only offer financial services can also be arranged.
“The application of the principles of sustainable consumption implies the introduction of norms that minimize the impact of e-commerce companies and financial service providers on the emotional state of consumers during the introduction of the goods and services offered and the consumer’s decision to purchase. The creation of such regulatory requirements may apply to the sequence of interactions between sellers and consumers, especially in terms of advertising, as well as the structure, design and operation of mobile application interfaces,” said the Ministry of Finance. Izvestia.
For example, through the bots “Yandex” and “Sber” you can order a taxi and take a credit card. MTS, Tinkoff and Mail.ru Group also have their assistants among the ecosystem. In the world, voice assistants are often used for shopping: more than half of voice speaker owners make purchases with them. If the same trend comes to Russia, the risk of misseling and aggressive advertising will become more widespread.
According to Just AI, 52 million people used voice assistants in Russia in 2020. Most of all prefer “Alice” from Yandex – 45 million users, Google Assistant – 11 million users and Siri – 6 million Most of the audience uses several solutions at once.
Apart from misseling, the bank’s voice interface provides more opportunities for fraudsters. Some banks use voice biometrics to authenticate customers, so that if they fall into the hands of an attacker, they can perform banking transactions on behalf of the user. And the more opportunities a voice bot provides, the higher the risk of losing access to accounts and money.
Other countries are also considering or have already introduced voice assistant regulations. For example, in Germany last year passed a law that equates voice assistants with user interfaces, the media wrote. This allows state authorities to hold developers accountable if their products mislead people. First of all, this innovation concerns the media platform, not the service sector.
In July this year, there were guidelines for regulation of virtual voice assistants from the European Data Protection Board (EDPB). They relate to the security of users’ personal information. Also in Europe, the General Data Protection Regulation (GDPR) applies, which requires speech technology makers to adhere to confidentiality and security principles throughout the product lifecycle.
New opportunities for fintech
Sberbank launches the SberUnity platform. With its help, small projects can respond to requests from investors and companies, as well as become participants in private events and training programs, including from the large accelerator 500 Startups.
For startups, participation is free, it is enough to have an MVP, legal entity, and technology component. The company seems to be paying for access. Instead, they can place an unlimited number of apps looking for a specific solution. For example, now the platform already has applications from Sber, Severstal, Unilever, NLMK Group, IBM, SIBUR, NVidia, Beeline, MegaFon, and Magnit. This platform gives investors the opportunity to find partners to participate in syndicated deals.
Investment company GETVISION has launched the Fintech Family Fund for 1 billion rubles. Among the fund’s founders is Mikhail Popov, founder of fintech platform Talkbank.
The funds will be invested in startups in Central and Eastern Europe in the pre-seed and seed stages. The focus is on projects in the e-commerce, fintech, software in the B2B segment, startups with a SaaS business model, and companies developing AI and machine learning technologies. One startup can receive from 15 to 100 million rubles.
In early 2024, the creators of the Fintech Family Fund plan to launch another fund, focusing on series A and B projects.
Credit Bank of Moscow and Generetaion S have launched fintech accelerators. Its main objective is to develop new technological scenarios for working with bank clients. Graduates of the best accelerators will be able to launch paid pilots and scale their products. The focus of the accelerator is ML / AI solutions, products for SMEs and entrepreneurs, blockchain and NFT, P2P, B2B, B2C, B2G transfer, Open API, robotization. They don’t consider projects related to chat bots and POS lending.
Neobank Tochka and the private investor community United Investors launched Pitch Day with up to RUB 500 million in funding. Organizers look forward to start-ups in the fields of SaaS for business, fintech, AdTech and MarTech (advertising and marketing technology), low-key and no-code platforms, communities and networks, IT solutions to work in the market for b2b and b2c, export and import. Projects must have an MVP and a first sale. In return, they promised project and team development within Tochka.
There are no aggregate statistics on accelerator investments in fintech yet. However, the total volume of venture capital investment in the sector in the second quarter of 2021 turned out to be a record.
Developer – new banker
Due to technological advances, the banking landscape is changing. According to Wells Fargo estimates, due to digitalization, more than 100,000 banking professions will be lost in the next five years. In the United States, within ten years, about 200,000 bank employees may lose their jobs. Wells Fargo Managing Director Mike Mayo estimates that two-thirds of back-office jobs and one-third of front-office jobs will be affected.
First of all, this will affect low-paying professions – in particular, call center employees. Their number will be reduced by 20%, the investment bank predicts. Specialists are being replaced by bots and artificial intelligence, which are already solving problems more efficiently than humans.
Banks spend more on technology than any other industry – last year alone, financial institutions allocated about $200 billion to IT According to Wells Fargo analysts, this means that developers are playing an increasingly significant role in finance – they are effectively the “new bankers.” At the same time, these are quite high paid personnel. But additional technology spending will ultimately help lower hiring costs, says Wells Fargo.
Over the past few years, the bank has laid off thousands of employees: HBSC left 35 thousand employees, UniCredit – from 10 thousand, US Bank did not state the exact number, but confirmed its intention to reduce staff due to digitization. The same thing happened with bank offices: they opened less and less, and some banks were trying to reduce their numbers completely.
The way banks assess and disburse loans is changing: the process is fully automated and less time consuming. For example, VTB owns a whole factory of robots that replace employees, including in terms of loans. There are various fintech solutions out there to help speed up customers: Jeff, Credo Lab, Credit Kudos, and Zest AI.
Wealth managers have been partially replaced by robo-advisors. The popularity of artificial intelligence based robot consultants is increasing every year. According to Juniper Research, by 2022 the global market for AI-only robo-advisers will total $987 billion.
Read also: how artificial intelligence is changing the world of finance