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

How Savvy Pioneers Lead the Future of Work

Hybrid and fully remote work are inevitable in the Global Networked Economy where high-performance talent demands flexibility from employers. To enable these progressive work models, organizations are investing in a wide range of technologies to support more agile types of employment.  According to the latest worldwide market study by International Data Corporation (IDC), leading organizations will spend nearly $1 billion on the Future of Work (FoW) in 2023 -- that's an increase of 18.8 percent over 2022. Future of Work Market Development "Work models continue to evolve, but 37 percent of decision-makers in a recent global survey note that Remote and Hybrid work models will be an embedded part of accepted work practices, supported by a continued shift to the cloud, increasingly instrumented and interconnected physical workplaces, and intelligent digital workspaces," said Holly Muscolino, group vice president at IDC . According to the IDC assessment, organizations must mak

Human Resource Transformation Enabled by IT

Many senior executives are taking a proactive approach to digital business transformation in order to achieve their strategic goals. Delivering revenue growth and profitability is now imperative for every function, including Human Resources (HR). The top 3 priority HR technologies this year are skills management, learning experience platforms, and internal talent marketplaces, according to the latest worldwide market study by Gartner. "With a tumultuous global economy, HR technology leaders face a balancing act in 2023," said Sam Grinter, director at Gartner . "Leaders must anticipate greater levels of accountability and demand for measurable outcomes to justify new technology investments." HR Transformation Market Development Forty-four percent of HR leaders report driving better business outcomes is their number one strategic priority for HR technology transformation over the next three years. Growth in headcount and skills (26 percent) and cost optimization (17 p

Virtual Reality Market Set to Reach $100 Billion

Virtual Reality (VR) market growth is now finally coming to fruition. Thanks to current actions and market momentum, VR is approaching what can be considered critical mass. And, not a moment too soon. This growth momentum comes from new hardware and content releases, accelerating enterprise value recognition, and a significant metaverse wild card that could potentially lift adoption and usage. According to the latest worldwide market study by ABI Research, over 85 million VR Head Mounted Displays (HMDs) will be shipped in 2027 across consumer and enterprise segments, creating a $100 billion VR market that includes hardware, software, and services. Virtual Reality Market Development "Expectations have been high in VR for years, and even decades, without notable growth to show. That growth is finally coming over the next five years," said Eric Abbruzzese, research director at ABI Research . The barrier to entry is lower than ever, all while content performance and user experien