What if the machine decides to defraud you?

What if the machine decides to defraud you?

Siri wasn’t really responsive, when I whispered to her, asking her to pay for my shopping at Earl’s Court Sainsbury’s. She was even quite indifferent, saying: “Sorry, that feature isn’t available, due to your device settings or region.” So I just used my fingerprint to activate the wallet app to make the payment.

Well, I still haven’t tried Monzo’s capabilities, using prepaid debit-cards and I understand that Monzo, just like Revolt, provides many more financial transaction features. However, I just thought it would be nice to connect Siri to the Wallet App and ask her to pay every time I needed to swipe my card, e.g. when buying coffee or travelling on the tube. The idea of linking Siri with your Wallet App sounds fine to me.

Yes, there are lots of security issues to be addressed, but honestly, I just love the idea of ordering goods from Amazon, whilst talking to Alexa.

Anyway, I started visualising how nice it would be to have a special AI financial bot instead of a Wallet App. The finbot would be in charge of your bank account; would track your expenditure and alarm you if you decide to go beyond your spending limits. And not only this, your financial bot would help you make your payments and send copies of receipts into your mailbox. And it would be fun, if a finbot could support small talk about today’s market and every morning bring you highlights from the Business Press.

Well, this is from my perspective of an ordinary user. However, all this eventually might turn into something more valuable. An AI finbot could digest financial data from the stock markets and calculate revenue growth, profits, dividends, capital growth, share prices etc. and process this data to make recommendations and help with decisions about buying and selling bonds, shares and other financial products.

Having this in mind, I doubled my research and discovered some interesting tech innovations.

If brokers need software to do B2B and B2C sales of insurance policies, they can address PremFina www.premfina.com which is based in London. Another company called Morningstar www.morningstar.com provides a range of products and services that allow investors to tap into professional-grade financial research, which helps them to make better investment decisions. PitchBook www.pitchbook.com based in Seattle and Washington provides information about public and private equity markets and the software encourages investors to maximise on new business opportunities, using due diligence research on market intelligence, fundraising information, and thereby source new investments.

Then I thought it would be useful to look at investment in the fintech SME market, as it would be logical to see if there is anything happening in financing small fintech enterprises. Charlotte Crosswell, CEO of Innovate Finance, says: “Fintech lenders have certainly played their part in disbursing the lifelines of CBILS (Coronavirus Business Interruption Loan Scheme) to small businesses.”They have been very helpful in supporting SMEs with the capital, taking into account that UK entrepreneurs in the past hadn’t had enough access to financial resources because of a lack of credit. Charlotte says that was another challenge for those innovators who had come up with new digital businesses to address the needs of SMEs. “Challenger banks and alternative lenders such as Starling, iwoca, Funding Circle, OakNorth, Tide, Capital on Tap and Atom Bank, have all started since 2010 intending to disrupt the SME lending market,” — saidCharlotte Crosswell.

Fintech lenders are already cooperating with 500,000 SMEs in the UK and it’s obvious what massive support they are giving to them for their growth.

Having read about this, I would like to point out the Bank of England’s “ New economy, new finance, new Bank” report. One of its priorities is to “help create an open platform to boost access to finance for small businesses and choice for households”(https://www.bankofengland.co.uk/-/media/boe/files/report/2019/response-to-the-future-of-finance-report.pdf?la=en&hash=34D2FA7879CBF3A1296A0BE8DCFA5976E6E26CF0)

The Bank of England says it will help to close the £22 billion SME funding gap in the UK, to support SMEs and “harness the power of their data by developing the concept of a portable credit file, to give greater access to more diverse and competitive financing options, including for global trade.”

Now, I was satisfied that investment in small fintech firms is doing quite well, but I was still curious if there are firms that are already doing anything to help users deal with their financial transactions and investments?

Drifting in the tomes of information and thinking about the security risks of linking your electronic wallet with the AI bot, I somehow bumped into the firm Onfido www.onfido.com which helps businesses, including those who provide financial services, to verify people’s identities. Machine learning provides face and character recognition, verifies passports, and checks ID cards, to help companies with fraud prevention.

Discouraged by these risk perspectives, that there is always someone who will want to defraud you, I was about to give up with the idea of a digital assistant to manage personal accounts.

A firm called Plum Fintech registered at Companies House as Plum Fintech Limited says it uses Artificial Intelligence and behavioural science to support users’ interactions with their finances. The software analyses bank transactions and highlights savings they could invest into something else. Also, it advises about energy suppliers and utilities, making comparisons and proposing better deals. It is said that on average a customer saves £230 pa. However I experienced complete pleasure, when I came across a firm called Poly AI www.polyai.com This group of AI experts, who had worked for Facebook AI, Apple Siri and Google, after first meeting at the Machine Intelligence Lab at the University of Cambridge, decided to start Poly AI. They united around the delightful idea to revolutionise human-machine communication. They are teaching machines to converse with human-beings and to hold human-level conversations! I finally decided I found heaven!

These innovative fintech value-propositions are becoming a paradigm of the nearest future and as Michael Kent, the CEO of Azimo online remittance service, said that London is “starting to look like Silicon Valley” when it comes to tech investment. This inspires me to think that the bright day is coming, when we will be making our journeys on the tube paid by a personal AI finbot who will be sending us updates on our tablets and smartphones, including stock markets and digested financial news.

Anyway, the major challenge which needs tackling here, is the security of personal accounts. Is our personal data and access to financial accounts safe enough and properly encrypted, so it won’t be leaked or hacked? Can we rely on AI financial bots in terms of investments and can we trust the calculated potential gains? How accurate or reliable are the digital algorithms in the world of finbot machines, so that they effectively manage our funds? Many questions arise and many aspects of finbots need to be addressed in the future.