[Editor’s note: This is a guest post from Douglas Lopes, the Chief Financial Officer of Airfox, a venture-backed fintech company based in Boston and São Paulo. Airfox is on a mission to accelerate financial inclusion for the underbanked within emerging economies. Airfox aims to create an entirely new financial services model for the underbanked that democratizes access to capital and financial services with a mobile-first solution.]
To produce the EY Global FinTech Adoption Index 2019, EY researchers interviewed more than 27,000 consumers in 27 markets across the globe. They found that the FinTech “adoption rate is growing faster than anticipated. The actual global adoption rate of 64% in 2019 exceeds by 12 points the 52% future adoption rate” forecast just two years ago.
Fintech contenders frequently employ smartphones, cryptocurrency, and/or digital wallets to compete with traditional financial service delivery methods. A ready combination of technological advancement, shifting consumer habits, and enormous underserved markets — particularly in emerging economies — have fused to create the world’s greatest opportunity for disruption and a robust startup ecosystem.
Greater global internet access and the widespread adoption of mobile technology couple with novel decentralized computational frameworks to underpin most fintech models (most notably in blockchain-powered projects). This comprehensive digitalization also generates mountains of data, which has, in turn, accelerated algorithmic advancement. New data-fed and rapidly evolving AI and machine learning capabilities are increasingly targeted toward speeding labor-intensive business processes and are particularly powerful in financial services applications.
According to Dresner’s 2019 Data Science and Machine Learning Market Study, Financial Services/Insurance respondents now rank data science, AI, and machine learning as critical to success in their industry at the highest rate amongst all market sectors surveyed.
AI and machine learning technologies can speedily process layer upon layer of vast and varied data while surfacing new patterns, reducing risk, and continuously improving function. As The Financial Brand recently reported, “AI changes the path to industry dominance in financial services. No longer will unfair strategic advantage be automatically granted to the bank or credit union with the most assets.” This presents an enormous fintech opportunity, since “scale of data will be increasingly important, with the ability to create unique, contextual experiences driving value and market share.”