FinTech LIVE New York - The Future of FinTech Forum

October 03, 2024

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Talking at FinTech LIVE New York, Nabil Bawa and Philippe Daoust discussed their vision for the future of the fintech industry

On 17 June, Nabil Bawa, Managing Director of Financial Services at NTT DATA and Philippe Daoust, Vice President and Managing Director at the National Bank of Canada took to our virtual stage at FinTech LIVE New York to explore how they believe the future of the fintech industry will pan out, as well as the importance of recognising how we can manage the current issues the industry faces, too.

Throughout the panel discussion, Nabil and Philippe highlighted how rapidly the fintech industry is evolving and how players need to embrace innovations such as fintech partnerships and strategic AI to maintain a unique competitive edge and adapt to prominent issues shaping the future of fintech, banking, and financial services.

The Future of FinTech

The Impact of AI

Throughout the discussion, both speakers focused on the importance of strategically integrating AI, in order to utilise the span of its potential.

When discussing AI, Nabil spoke about how AI has allowed customer segmentation, decision-making- making and data usage to be transformed. As well as this, he encouraged banks to ensure that their AI investments align with the goals of their business, are practical and practical. Nabil then continued to enforce the fact that data needs to be used effectively and ethically when utilising AI, to enforce robust data governance.

"Traditional banks must invest in AI and data analytics or risk losing their competitive edge, especially with open banking reducing their data advantage,” Nabil said.

Philippe focused on the fact that AI has the incredible potential to change the banking environment. By making use of AI, processes can be made clearer, allowing smaller players to begin to compete with bigger banks. Philippe concentrated on the fact that AI will alter retail banking, enhance customer experience and create real- time competition through combining AI with open banking.

"With open banking and AI, we’re looking at a future where real-time competition in retail banking will enhance customer experiences,” Philippe said.

Banking

Both Nabil and Philippe discussed the fact that bank and fintech partnerships are coming under greater criticism for their regulations. They continued to focus on the fact that understanding and navigating regulatory changes will be challenging in the future, but necessary due to the strong relationship between fintech and financial services.

Philippe emphasised the need for fintechs and mid- sized banks to form a partnership in order to maintain their competitive advantage. He continued to discuss how fintechs need to be engaging with banks as clients rather than investors, whilst also noting the fact that mistakes will be inevitable in this process in crafting partnerships.

"Fintechs are capturing the attention of younger generations, and traditional banks need to modernize or lose relevance, " Philippe explained.

However, Nabil focused on the fact that traditional banks can become competitive and reduce the threat of open banking by investing in AI and data analytics. He went on to discuss the fact that modernisation is also key for the future, in order to appeal to younger generations who are inheriting wealth and finding fintechs more appealing.

Emerging Threats

The pair of speakers delved into the risks associated with developments in the AI industry, whilst emphasising the need to consider ethics when using AI. In addition to this, both speakers touched upon large language models (LLMs), and how AI is causing these to develop into a potential threat due to their ability to enable sophisticated cyberattacks.

Philippe discussed how AI models can create unintentional bias in models, like discarding customers due to socioeconomic factors, whereas Nabil highlighted the fact that the use of AI can result in job displacement and anti-competitive behaviour. Nabil focused on the fact that these risks are even greater in smaller fintech players.

Another threat the pair discussed was the development of cybersecurity threats. Nabil spoke about the use of cloud infrastructure can become a threat, as well as third- party vendor attacks.

"Cloud-based cybersecurity is now a priority as banks migrate more systems to the cloud. Supply chain attacks are another growing concern, where third-party vendors can act as conduits for breaches," Nabil clarified.

Yet, Philippe focused on the fact that cybersecurity needed to be solved by changes in behaviour and user education, as well as new technical solutions. He emphasised the fact that banks cannot be entirely responsible for cybersecurity and how customers and institutions need to work together as a collective effort.

"Banks can have the best systems, but if end-users aren’t trained to avoid fraud, the right password and login are still difficult to detect. There needs to be a behavioral change, and banks must push cybersecurity to the forefront alongside customer experience," Philippe explained.

Overall, the panel discussion highlighted the importance of financial institutions adapting to the evolving financial landscape and both speakers discussed how regulatory, technological, and ethical challenges need to be confronted to excel in the future.