Particularly since the release of OpenAI‘s ChatGPT at the back-end of 2022, the world has sat up and taken notice of the potential of artificial intelligence (AI) to disrupt all industries in countless ways. To kick off 2024, The Fintech Times is exploring how the world of AI may continue to impact the fintech industry and beyond throughout the coming year.
In 2021, non-fungible tokens (NFTs) took off in popularity seemingly overnight. However, after initial hype, NFTs’ popularity has since fallen off a cliff. In Q4 2021, there were nearly two million active NFT wallets, but by Q3 2023, this number had dropped to 227,000. With AI becoming mainstream in a similar, short amount of time, it begs the question – will the technology also fall out of favour or, unlike NFTs, is it here to stay?
Here to stay but it won’t hog the limelight
AI’s continuous development will mean the technology is here to stay according to Michelle Moody, MD at Protiviti UK, the management consulting firm, however, other emerging technologies may start to steal the headlines in the future. Listing examples, she said: “The AI hype will likely continue going forward and will continue to evolve alongside technologies, regulations, and capabilities in the market. However, some other emerging technologies may become more prevalent in the market.
“For example, quantum computing is beginning to appear in the market to create a super-fast technology for problem-solving using vast amounts of computations and data too complex for classical computers.
“Other areas that might come to the forefront in the next couple of years are advanced robotics and gene editing technologies. These include CRISPR gene editing, edge computing and synthetic biology, where new biological parts/systems can be developed and could be helpful in areas of renewable energy and pharmaceuticals.
Accessibility has been the catalyst for its popularity, and this will only increase
Limiting barriers to adoption is a vital part of a technology’s success. AI has been around for years, but it hasn’t always been accessible. Ylva Oertengren, COO at Simply Asset Finance, the asset finance provider, explains how making AI more inclusive has accelerated its growth.
“AI is here to stay. It has been around for a while already; the hype has come from it becoming more accessible. Now, it’s not just developers who can use AI models, anyone can. This inclusivity has been transformative for teams in all areas of business operations. With more people able to access and understand how AI can be used, the more likely it is to be embedded in our everyday business operations and become more commonplace.”
Only the beginning
Ben Parker, CEO of eflow Global, the trade surveillance tool, explains how accessible AI has now become, rather than emerging technologies replacing it: “eflow believes that AI is here to stay and still has plenty of room for further development; the pace of change just over the last 12 months shows how quickly it’s evolving. In many respects, we believe the pertinent question is more about how accessible AI has now become, rather than emerging technologies replacing it.
“Highly dynamic and collaborative tools such as GPT4 are now available to individuals with little or no technical understanding of developing trading strategies. This raises the potential risk that retail investors could start using AI tools and become the perpetrator of market abuse, either inadvertently or deliberately.”
The era of quantum is coming
Appreciating why firms are focusing on AI, Andy Cease, director of product marketing at paytech Entrust, looks at how important quantum technology will be in the fintech sphere.
“Post-quantum cryptography is not yet a top priority for most bank CISOs, despite the existential threat it poses. More immediate issues like AI, biometrics, customer adoption and fraud take precedence currently. However, long data retention mandates in banking mean ‘harvest now, decrypt later’ quantum attacks could expose records far in the future.
“Banks should already be upgrading cryptography to post-quantum standards, even if quantum computers aren’t yet a reality. For banks, threats like synthetic identity theft feel more tangible in the short term. Post-quantum seems abstract, like the early warnings about climate change decades ago. But quantum computing will manifest itself eventually, and the failure to prepare will be felt for the next 20-30 years.”