A short PPT on the use of financial technology eg. AI, data analytics and blockchain by banks to compete with disruptive fintech startups

1. BUSINESS
APPLICATIONS
OF FINTECH-
RECOMMENDATI
ONS

2. HOW SHOULD
THE BANK
POSITION
ITSELF?
ENHANCING ITS DIGITAL
OFFERINGS AND CUSTOMER
SERVICE
FURTHER INVESTMENT IN
AUTOMATION WITH ARTIFICIAL
INTELLIGENCE AND MACHINE
LEARNING
FURTHER INVESTMENT IN
BLOCKCHAIN AND DATA
ANALYTICS
INITIATE A GRADUAL SHIFT
TOWARDS SMALL SCALE
LENDING AND FUND TRANSFER
OF CRYPTOCURRENCY
ACQUIRE AND/OR PARTNER
WITH FINTECH STARTUPS
OUTSOURCE TECH. ACTIVITIES
FROM FINTECH STARTUPS
INCUBATE STARTUPS

3. WHAT
SHOULD
THE BANK
INVEST IN?
1.ENHANCING ITS DIGITAL
OFFERINGS AND CUSTOMER
SERVICE-
THIS INVOLVES OFFERING
MORE CONVENIENT,QUICK
AND RELIABLE SERVICES
WITH RESPECT TO CHEQUE
PAYMENTS, A SMOOTHER
AND MORE EFFICIENT
SYSTEM FOR NATIONAL AND
INTERNATIONAL FUND
TRANSFER
OFFERING THE BANK’S OWN
DIGITAL WALLET LIKE PAYPAL
WHICH WILL FACILITATE
CUSTOMERS’CASHLESS
TRANSACTIONS

4. INTELLIGENCE AND MACHINE
LEARNING-PROVIDES SEVERAL
ADVANTAGES TO BANKS:
REAL-TIME DATA PROCESSING-
1.CONTRACT, COMPLIANCE AND
REGULATION INTELLIGENCE: THE
BANKING INDUSTRY SPENDS
MOST OF ITS OPERATING COSTS,
ON THE HANDLING OF
COMPLIANCE AND REGULATION,
WHICH IS A BIG CHALLENGE
WHEN IT NEEDS TO BE DONE IN
REAL-TIME. THEREFORE BIG
BANKS USE AI
2.RISK MANAGEMENT: MACHINES
ARE ABLE TO READ ALL THE DATA
INPUTS THAT DIFFERENTIATE
GOOD TRANSACTIONS FROM
FRAUD SIMULTANEOUSLY, WHICH
CAN BE EASILY BYPASSED BY
HUMANS
3.TRADE MONITORING
4. INTELLIGENT CASH

5. SPENT ON ROUTINE AND FREQUENT
TASKS (SUCH AS ANALYSING
STATUS REPORTS, TRACKING
COMPLIANCE AND REGULATIONS,
SOFTWARE UPDATES, PASSWORD
RESETS AND TROUBLESHOOTING
ETC.), WHICH ARE THE BIGGEST
OPERATIONAL WORKLOADS IN THE
BANKING INDUSTRY.
COST SAVINGS-
THERE IS NO DOUBT BANKS KNOW
HOW TO HANDLE MONEY AND IT IS
NOT A SURPRISE TO HEAR THAT THE
BANKING INDUSTRY IS ONE OF THE
FIRST TO UTILISE THE LATEST
INNOVATIONS WHEN IT COMES TO
AUTOMATION.
BETTER CUSTOMER EXPERIENCE-
AI ALGORITHMS NOW ARE ABLE TO
TRACK, ANALYSE CUSTOMER DATA
TO DETERMINE THE CUSTOMER
IDENTITY AND IN ADDITION TO
RECOMMENDING THE BEST
SERVICE, THEY ARE ABLE TO SOLVE
PROBLEMS IMMEDIATELY AND
PROVIDE LOWER-COST SERVICES.

6. ANALYTICS -
INVESTMENT IN DATA
ANALYTICS ENABLES THE
BANK TO DISCOVER
TRENDS AND
CONSUMER’S BEHAVIOUR
SO AS TO IMPROVE
SERVICES.
MAJOR BANKS HAVE
EXPLORED BLOCKCHAIN
FOR OPTIMISING SUPPLY
CHAIN RECORDS,
BATTLING FRAUDS,
TRACKING AND
SECURING
PAYMENTS,AND
INCREASING EFFICIENCY
OF CURRENT
PROCESSES.

7. CRYPTOCURRENCY-
INTRODUCTION OF A FACILITY
ALLOWING CUSTOMERS TO
VIEW THEIR
CRYPTOCURRENCY BALANCES
FINANCIAL PRODUCTS LIKE
BONDS AND LOANS
DENOMINATED IN
CRYPTOCURRENCY
A PLATFORM ENABLING
TRANSFER OF MAJOR
CRYPTOCURRENCY LIKE
BITCOIN FROM ONE BANK
ACCOUNT TO ANOTHER.
CONVERSION OF
CRYPTOCURRENCY TO FIAT
CURRENCY AND VICE VERSA.
IT IS WORTH MENTIONING THAT IT
WILL TAKE A VERY LONG TIME
FOR BANKS TO PROPERLY START
DEALING IN CRYPTOCURRENCY,
BUT IT CAN BE INITIATED
SLOWLY.

8. 5. ACQUIRE AND/OR PARTNER
WITH FINTECH STARTUPS-
BY ACQUIRING A FINTECH
STARTUP, A BANK CAN UTILISE
ALL ITS SERVICES TO IMPROVE
THE QUALITY OF ITS OFFERINGS.
BY PARTNERING WITH A FINTECH
STARTUP, BANKS CAN
COLLABORATE WITH FINTECH
STARTUPS TO CREATE
LENDING,PERSONAL FINANCE
AND TRANSACTION SYSTEMS
EXAMPLES- PLATFORMS FOR
PROVIDING LOANS TO SMALL
BUSINESS
(KABBAGE),DETERMINING THE
CREDITWORTHINESS OF A
BORROWER(CREDIT KARMA),
DIGITAL WALLETS( PAYPAL AND
ALIPAY) ETC.

9. 6. OUTSOURCING TECH. ACTIVITIES
FROM
FINTECH STARTUPS-
SOME BENEFITS OF THIS ARE:
IMPROVING OPERATIONAL
PERFORMANCE BY FOCUSING ON CORE
ACTIVITIES
REDUCING OVERHEADS AND
OPERATING COSTS.
SAVING MANPOWER AND TRAINING
COSTS.
IMPROVING SPEED, SERVICE AND
EFFICIENCY.
TRANSFERRING NON-CORE FUNCTIONS.
ACCESS TO SPECIALISED SKILLS.
AVOIDING THE COST OF ‘CHASING
TECHNOLOGY’.
LEVERAGING THE PROVIDER’S
EXTENSIVE INVESTMENT IN
TECHNOLOGY AND METHODOLOGIES
TO REDUCE THE RISK OF TECHNOLOGY
OBSOLESCENCE.
INCREASED EFFICIENCY BY
CONSOLIDATION

10. HELPS NOT ONLY STARTUPS
BUT ALSO THE NATION AT
LARGE, EMERGING
BUSINESSES ARE THE FUTURE
OF THE ECONOMY
INCUBATING STARTUPS IS LIKE
AN INVESTMENT FOR A BANK
CAN POSSIBLY HAVE HUGE
BENEFITS
IF THE FUNDED STARTUPS
BECOME SUCCESSFUL THEY
ARE USUALLY OBLIGED TO
GIVE BACK TO THE BANK.
STARTUPS AID THE BANK IN
INCORPORATING FINTECH
APPLICATIONS TO IMPROVE
THEIR SERVICES.
BANKS GET ADVANTAGE OF
STARTUP’S INNOVATION TO
PARTNER ON DIFFERENT
PROJECTS. STARTUPS ALSO
BECOME BORROWERS OF
CAPITAL

11. WHAT
OPPORTUNITI
ES SHOULD
THE BANK
TAKE
ADVANTAGE
OF?
THE GROWING MARKETS OF ASIA FOR
FINTECH ENDEAVOURS WHERE THE BANK
HAS A LARGE CUSTOMER BASE
THESE MARKETS HAVE BEEN VERY OPEN
AND RECEPTIVE TO FINTECH
THE GOVERNMENT’S PATRONAGE
TOWARDS FOSTERING DEVELOPMENT
AND INCUBATION OF STARTUPS AND THE
INCREASING APPLICATION OF AI,
MACHINE LEARNING AND DATA SCIENCE.
THE BANK’S HUGE INFLUENCE AND
WORTH.IT HAS CAPITAL TO INVEST IN THE
AFOREMENTIONED APPLICATIONS OF
FINTECH.
THE BANK’S CONTACTS AND PARTNERS IN
ORDER TO CONTACT VARIOUS STARTUPS
FOR
PARTNERSHIP/ACQUISITION/OUTSOURCIN
G.
THE BANK’S LARGE CUSTOMER BASE,
THIS WILL FACILITATE ALL ITS NEW
IMPROVEMENTS IN ITS SERVICES AS
THERE IS ALREADY AN AUDIENCE TO
TEST THE IMPROVEMENTS

12. HOW TO
MANAGE
THE RISK?
THE BOARD OF DIRECTORS MUST ALWAYS
MAINTAIN EFFECTIVE OVERSIGHT OVER ANY
FINTECH ENDEAVOUR AND ENSURE THAT
EFFECTIVE CONTROLS ARE IN PLACE.
MANAGEMENT MUST MAINTAIN EFFECTIVE
OVERSIGHT BUT MUST ALSO EFFECTIVELY
MANAGE ANY OUTSOURCING
RELATIONSHIPS,PARTNERSHIPS AND
ACQUISITIONS.
AT THE START, MANAGEMENT MUST BE
PREPARED TO SELECT A QUALIFIED FINTECH
STARTUP, MANAGE AND MONITOR ALL
AGREEMENTS, AND COMPARE THE PLAN WITH
INTERNATIONAL PLANS.
BEFORE ANY VENTURE, THE BANK MUST ASSESS
ITS FEASABILITY, CONDUCT EXTENSIVE
RESEARCH AND COMPARE IT WITH OTHER
SIMILAR VENTURES OF COMPETITORS.
BANKS MAY HIRE THE SERVICES OF
PROFESSIONALS LIKE ACTUARIES AND THOSE
INVOLVED IN RISK MANAGEMENT.
ENSURE THAT CONTROLS ARE IN PLACE AND
VALIDATED INDEPENDENTLY, AND ENSURE THAT
A CONTINGENCY PLAN IS IN PLACE. THE BANK
MUST NOTE THE PROGRESS OF THE PLAN
FINANCIAL YEAR.

13. WHAT CAN
THE BANK
DO TO
THRIVE?
TRADITIONAL BANKS FACE THE
THREAT OF THE FINTECH
REVOLUTION TODAY
HOWEVER IF THE BANK ADAPTS
TO THE CHANGING MARKET BY
INVESTING IN AT LEAST SOME OF
THE FINTECH APPLICATIONS
LISTED,IT WILL DEFINITELY STAY
IN BUSINESS
IN THE NEXT 3-5 YEARS THE BANK
SHOULD DEFINITELY LAY
EMPHASIS ON CREATING E-
WALLETS,USING AI AND
BLOCKCHAIN TO IMPROVE
QUALITY OF ITS NETBANKING
SERVICES AND DATA ANALYTICS.
BY INCORPORATING MORE AND
MORE FINTECH IN ITS SERVCES
THE BANK IS BOUND TO THRIVE IN
THE FUTURE.

14. THANK YOU!