Skip to main content

Fintech Adopts Big Data and Cognitive Computing Apps

Given that the financial services sector thrives on large quantities of data, it is not surprising that new technology is expected to play a key role in this industry's digital transformation. Innovative and disruptive financial technology (Fintech) ventures will create new business models that drive progressive change.

Juniper Research has found that Fintech platform revenues for unsecured consumer loans issued using machine learning technology are set to grow by 960 percent during 2016 to 2021, rising to $17 billion globally. This growth is being driven by advances in big data analytics and cognitive computing.

Juniper's latest market study found that machine learning investment in Fintech will advance rapidly, owing to the highly data-driven nature of the market -- it's anticipated that AI integration is likely to produce substantial benefits.

Machine learning technology advances -- a subset of artificial intelligence (AI) -- have grown significantly since 2011, with substantial increases in related venture capital (VC) and research & development (R&D) investment.


Fintech Market Development Opportunities

For example, two Fintech start-up companies -- Kabbage and ZestFinance -- have collectively raised $500 million in funding. Meanwhile, vendors analyzed by Juniper have invested a total of $83 billion in R&D during 2015. Each of these vendors names AI as a part of their core business strategy.

Until recently, machine learning was too expensive and computationally time-intensive to break into the mainstream. Moreover, access to extensive data sets for algorithm training were somewhat limited.

Presently, the ability to use GPU (graphics processing unit) hardware for processing massive and highly available data sets, along with unlimited affordable computing power in the form of distributed architecture, has opened the market to a swathe of disruptive new players.

Big Data Analytics and Cognitive Computing Apps

AI and other forms of cognitive computing are particularly useful for risk-assessment purposes, where variables from numerous financial and non-financial datapoints are assessed by algorithms to approve loans.

This widens the addressable market for financial institutions considerably over traditional FICO credit scoring, where lack of credit history may mean loan rejection despite a real low risk for the lender.

"Where Big Data analytics offered retrospective business intelligence, machine learning offers predictive and even prescriptive capabilities," said Steffen Sorrell, senior analyst at Juniper Research. "Data is key -- and industries able to draw expertise from data scientists will be the first to capitalize on the AI opportunity."

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Flexible Working: Why Company Culture Matters

The main reasons for the Great Resignation are obsolete leadership, fearful middle managers, and a toxic culture that hinders employee engagement. Perhaps that's why some organizations are still struggling with the consideration and development of a flexible working model.  They're incapable of evolving to a more enlightened approach to work where employees are treated with respect. They're stuck in a bygone era of the 20th-century industrial revolution where 'shareholder value' tops all other values, and where spreadsheets and financial data analysis drives all key decision making. We should not be surprised that 76 percent of human resource (HR) leaders now feel that hybrid work challenges an employee's connection to organizational culture, according to a recent survey by Gartner. A 2022 poll of HR leaders reveals the most challenging aspect of setting their hybrid strategy is adjusting the current organizational culture to support a hybrid workforce. In fact,

Energy Sector IoT Cybersecurity Gains Momentum

The electric distribution industry continues to invest in digital transformation projects. Advanced Metering Infrastructure (AMI) technology is becoming a driver for connected electricity meters, which will reach an installed base of 1.3 billion by 2027. AMI growth is prompting utilities and energy suppliers to revisit their IT infrastructure security and device management operations, according to the latest worldwide market study by ABI Research. Energy Infrastructure Security Market Development Digitization of traditional electricity grids and the modernization of the aging energy infrastructure is among the top concerns for utility operators and governments worldwide. Security for last-mile energy consumption applications was frequently overlooked. "However, the introduction of AMI, smart metering, and grid digitization is steadily increasing spending for secure management services, assisting implementers to transition to IT (information technologies) and OT (operational techno