Super intelligence as the future of financial services
I was invited to attend the Huawei Intelligent Finance Summit two weeks ago and it was a fascinating insight into innovation priorities and use cases around the world in the past year.
The Huawei Intelligent Finance Summit took place over June 3-4 in Shanghai, China
The theme of financial super intelligence is especially relevant in 2021, with several conversations in the financial services space happening as a result of convergent innovation across industries, from healthcare to education to financial services and insurance.
The digitalisation of banking and financial services has undoubtedly come a long way in the last decade. We have moved on from an era of PCs, PC internet, mobile internet and now industrial internet with over 16 billion connections.
The next step, as discussed in one of the keynotes, is to create intelligent connections to achieve tremendous scalability for 100s of millions of connections, in a converged development environment. It was a fascinating insight into how the impact of infrastructure, storage and computing power will drive the world into industrial scalability and convergence.
Several key insights came out during the event:
A change in risk models – A clear trend was highlighted about intelligent risk control gradually replacing traditional risk control, using available intelligent data analytics tools. A recent Burnmark study also spoke about this topic in detail, with several steps identified – from risk deconstruction to reporting – that can be undertaken with big data analytics, AI and machine learning in very interesting ways.
Distributed collaboration – We’ve heard about collaboration in the digital banking industry for several years now; the conversation now is centred around the scalability, breadth and depth of these collaboration models. With increased efficiencies in cyberinfrastructure and sharing capabilities, collaboration between internal and external partners has seen several interesting use cases in the past year. During the summit, Huawei also announced a partnership with Temenos matching Huawei Infrastructure and Huawei Public Cloud with Temenos’ core banking products, which appears to be guided by this desire to achieve greater scalability and access.
‘Bank of Things’ – Physical entities that are modular, interrelated and connected were also much talked about – with a view to understanding what these building blocks could create for the bank of the future. With the advent of hugely interconnected networks in the 5G era, we now have capabilities for faster processing and better data flows and value mining, helping with large-scale adoption of Internet of Things. These capabilities, when they are fully utilised in retail banking, will lead to interesting use cases around ‘Bank of Things’ as well. One of the use cases highlighted was around 100 billion terminals being connected to achieve efficient, intelligent data sharing and analysis.
Cloud 2.0 – Huawei believes strongly in cloud as a foundation for digital transformation and considers ON Cloud (resource-centric cloud) and IN Cloud (application-centric cloud) with their cross-cloud services a game changer in capacity expansion and ecosystem management.
Credit – One of the areas benefiting from more data and convergent super intelligence is credit and behavioural data analysis, with a desire for transaction data in real time that allows better data modelling and customer understanding. This will ultimately lead to incredible transformation in credit risk systems and models, as was discussed at the event. Intelligent connectivity can be used to dynamically derive and improve credit data credibility and support better decision making and services around credit.
The summit also brought forth several solutions and use cases that solve very specific problems.
Payments innovation continues to be a hot topic in Asia, and a partnership with Wallyt, a QR-based payments company, was announced for a one-stop payments platform. eGoo Networks, a 5G video-based customer service solution, offered channel capabilities while Sunline offered marketing and data asset management capabilities. Several use cases revolved around platformisation for efficiency and convenience, including solutions from Beiming Software for insurance data unification and Quantex for agricultural risk management.
The most interesting aspect of the payments use cases discussed at the event, to me, was the impact on financial inclusion brought about by improved mobile infrastructure and network capabilities. Huawei’s work with M-Pesa is a case study much talked about. Its work with G-Money and Ghana Commercial Bank is also fascinating in a country with 73% of all transactions conducted using mobile money. QR code-based payments, improved pre-sales and after-sales services for merchants and API-based platforms were discussed as key areas of focus to better facilitate financial inclusion.
I’ve since spoken with Ben Yang, vice president of global financial services business unit, enterprise group at Huawei, who says:
“Network carriers are the most readily available infrastructure around the world, and are available even in rural areas. This makes it possible to offer financial inclusion at scale using basic phones and features like texting for money transfer to the mass market. We have seen penetration of banking services increase from 21% to 85%, using mobile money, in countries like Kenya.”
Investment in infrastructure is clearly key to unlocking the potential of digitalisation in financial services across all use cases discussed. Infrastructure investments are also needed to boost industry connectedness across manufacturing, property, travel, automotive, health and financial services industries, which will ultimately create efficient joint ecosystems. And at the heart of this connectivity lies open systems that are able to bring products, services and technologies in one platform – it’s evident the world’s financial services companies are headed in this direction.
