The tech­nolo­gies re­defin­ing fi­nan­cial ser­vices

Alaa El­shimy on the evolv­ing role of blockchain, big data and AI in fi­nance

Gulf Business - - CONTENTS - Alaa El­shimy Man­ag­ing direc­tor and vice pres­i­dent, Huawei En­ter­prise Busi­ness, Mid­dle East

Huawei En­ter­prise Busi­ness’s man­ag­ing direc­tor and vice pres­i­dent, Alaa El­shimy, ex­plains the evolv­ing role of blockchain, big data and AI in fi­nance

RE­CENT RE­SEARCH HAS shown parts of the GCC to be way ahead of global com­peti­tors when it comes to the adop­tion of in­no­va­tion in fi­nan­cial ser­vices. The UAE is a fi­nan­cial hub for the Mid­dle East, and has shown to be liv­ing up to its name, with many tech­no­log­i­cal ser­vices and tools be­ing de­ployed.

The in­dus­try has felt the weight of the dig­i­tal revo­lu­tion, with the ef­fort of main­tain­ing growth and prof­itabil­ity be­com­ing more stren­u­ous by the day. Banks and fi­nan­cial in­sti­tu­tions need to re­main rel­e­vant, cus­tomer-cen­tric, and in­no­va­tive. That’s no mean feat.

His­tor­i­cally, fi­nan­cial ser­vices has al­ways been one of the slower mov­ing in­dus­tries – chal­leng­ing to break in to, and risky to dis­rupt. To­day, how­ever, things are chang­ing. Thanks to the rise of fin­tech com­pa­nies in the GCC, and government sup­port of such start-ups, new play­ers are driv­ing change in the fi­nan­cial ser­vices in­dus­try, al­ter­ing the way we deal with our fi­nances. This will have a ma­jor in­flu­ence on the way you deal with fi­nan­cial ser­vice providers in the fu­ture, from mo­bile pay­ments to in­sur­ance op­tions.

Ex­perts have been high­light­ing fu­ture trends that war­rant due dili­gence, cit­ing dig­i­tal trans­for­ma­tion, AI and blockchain, real-time anal­y­sis and big data as the most cru­cial en­ablers of change.

It’s highly likely we will be feel­ing the ef­fects of these in­no­va­tions sooner rather than later in our part of the world. Sim­i­lar to the rise of big data in com­mer­cial op­er­a­tions, blockchain will see its fame grow sig­nif­i­cantly, with fi­nan­cial ser­vices likely be­ing one of its big­gest driv­ers. The dis­trib­uted ledger tech­nol­ogy has se­cured its place in in­dus­tri­al­i­sa­tion, and many com­pa­nies have be­gun build­ing out strate­gies that in­cor­po­rate blockchain so­lu­tions. We look for­ward to see­ing where this tech­nol­ogy ends up, par­tic­u­larly in the in­sti­tu­tional space, and beyond re­tail.

One of the areas where this tech­nol­ogy will be cru­cial is fraud and anti-fraud reg­u­la­tion. Due to the al­go­rith­mic fab­ric of trust it will build, seam­less and real-time de­ci­sion-mak­ing in the trans­ac­tional se­cu­rity space will be able to dra­mat­i­cally im­prove its de­liv­ery speed, as well as its re­li­a­bil­ity.

But it’s not just about one sin­gle tech­nol­ogy. In or­der for blockchain to be suc­cess­ful, or valu­able rather, it needs to col­lab­o­rate with other tech­nolo­gies. Big data plays an im­por­tant role here – pro­cess­ing large vol­umes of data and in­for­ma­tion from mul­ti­ple sources, mov­ing through blockchain, to en­able seam­less trans­ac­tions.

We’ve been work­ing in the big data space to im­prove op­er­a­tional per­for­mance from the back­end, but also the cus­tomer ex­pe­ri­ence, which big data sig­nif­i­cantly con­trib­utes to. To­day, our fo­cus lies in re­al­time anti-fraud pro­cess­ing.

This is im­por­tant for both com­pa­nies and their cus­tomers. Re­search shows that cus­tomers ex­pect fi­nan­cial la­tency to be less than a sin­gle sec­ond – but the process is a com­plex one. When an on­line trans­ac­tion is made, the e-trans­ac­tion that’s trig­gered first goes to the real-time anti-fraud sys­tem to be val­i­dated. That sys­tem judges the au­then­tic­ity of the re­quest and then ei­ther high­lights, doubts or en­ables the move. If there’s an is­sue, the case will be closed off, and rel­e­vant au­thor­i­ties alerted. If it’s cleared, it’s then sent to its re­lated core sys­tem where the pay­ment is suc­cess­fully made.

In to­tal, that process needs to be less than one sec­ond – which seems barely pos­si­ble from our per­spec­tive, but thanks to big data it’s achiev­able. How we’ve made this work is by en­abling a large num­ber of con­cur­rent trans­ac­tions to en­sure all data can be an­a­lysed in less than 300 mil­lisec­onds.

Add to this the emer­gence of ar­ti­fi­cial in­tel­li­gence, which al­lows com­mon trends and con­cerns to be re­mem­bered and pre­vented by ma­chine learn­ing, and your trans­ac­tions be­come more seam­less, more re­li­able, and more ef­fi­cient.

The re­main­ing key driv­ers are of course bio­met­rics, which we hear be­ing talked about more of­ten. This seeks to fur­ther im­prove se­cu­rity and build trust, which in turn will fur­ther help pro­pel the adop­tion and ac­cep­tance of blockchain.

To­gether, these tech­nolo­gies will ac­cel­er­ate the dig­i­tal trans­for­ma­tion for the will­ing and ready, and those that fail to move quickly will find them­selves lag­ging be­hind in an in­dus­try that shows no sign of slow­ing down. From a cus­tomer per­spec­tive these dig­i­tal driv­ers are en­cour­ag­ing, from a busi­ness per­spec­tive it’s just another chal­lenge that needs ad­dress­ing.

For busi­nesses in the GCC, where adop­tion of dig­i­tal ser­vices is high, a solid part­ner ecosys­tem, fa­cil­i­tated by global play­ers, will con­tinue to fos­ter the right en­vi­ron­ment for roll-out, as well as the right skills and tal­ent to take full ad­van­tage of what these ser­vices have to of­fer.

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