We recently did a study for an international law firm group where we assessed Regtech and Fintech. What we saw is that these technologies are in the early stages of disruption of the financial services industry globally and in South Africa as well but that their growth is fast and the change is going to be permeating.
With $36 Billion (yes, that's 9 zeroes) invested in 2016 in Fintech, the industry certainly has allot going for it. It can potentially cause allot of job loss or job creation, depending at how you look at it. Me, I'm a glass half-full kind of guy so I like to think that these changes are to the betterment of us all and that people can (if they are willing and able) migrate to other professions that will be born from this disruption or that other jobs will be created in startups and smaller companies. Even if AI does take over many human roles in financial services, I believe one is still going to need allot of human interaction to provide a good service (as was evidenced by some recent interactions I had with a bank that it is so focused on leveraging tech that it is bleeding clients due to the lack of human assistance when things go boom).
Automation and AI has essentially been around us for quite a while now and for some reason people tend to not think about these simple things as AI. They usually think of AI as some smooth talking humanoid robot. AI is defined by the Merriam Webster dictionary as:
1 : a branch of computer science dealing with the simulation of intelligent behavior in computers.
2 : the capability of a machine to imitate intelligent human behavior
Now, if you take your average mobile phone, for example. It is an AI device but we don't realise it. Yes, some people use it to only call or play a game of Angry Birds but for others it's a powerhouse of automation (if you're not refreshing facebook or your emails every minute that is, because that will kill your productivity quickly). As beauty is in the eye of the beholder so is tech in the hand of the user. It's all about how you use this technology that's going to make the difference.
"As beauty is in the eye of the beholder so is tech in the hand of the user."
Whether Fintech will become as accepted in South Africa as it is already in other parts of the world remains to be seen. What is clear is that more and more companies are getting on the bandwagon even in South Africa. Even regulators are taking more notice as we've seen at the Financial Services Board FAIS Conference earlier in the year where they gave their commitment to regulate these new Fintech services.
by: Horizon Compliance team