Yugabyte @ Money 20/20 USA 2023
7 Key Takeaways from connecting with pioneers
The Money 20/20 USA conference last week got us a chance to get together with many leaders, start-ups, and thought leaders in finance, payments, and technology.
1. TRUST & AI:
Building Trust in the Banking Industry with Ethical AI
Lots of conversations on how trust and reputation are paramount.
For traditional banks, this trust and confidence that customers have in them are everything. As we navigate through the new era of artificial intelligence (AI) and look ahead to the quantum age, maintaining these values becomes more important than ever. We must adhere to core values, scientific standards, and structures that revolve around risk, fraud, security, and privacy. These standards are not static; they continue to evolve. But is that enough? The truth is, we can’t predict everything that will happen in this ever-changing landscape. The answer that resonated time and again was “We must do more”.
In this rapidly evolving financial landscape, AI is a powerful tool. However, building and maintaining trust in the industry is equally critical. It’s clear that organizations are taking steps to embrace AI while ensuring that it aligns with ethical principles and data transparency. As we move forward into the Data and AI age, the industry’s commitment to these values will play a pivotal role in shaping its future.
Trust remains at the heart of the financial sector, and AI must be harnessed responsibly to uphold that trust.
Many financial organizations, engendering trust is a primary role. They raised the question of how AI fits into this trust-building equation.
2. Balancing AI with Human Elements:
While AI has great potential, it should be balanced with the human element. Certain areas like underwriting and lending benefit from AI, but human oversight remains essential to ensure ethical and responsible use.
The use of AI to combat fraud and improve intelligence within financial organizations. They stressed that regardless of the AI technique, bias in AI often stems from the data. Transparency about data usage and privacy is vital for building trust.
In our many exchanges with FinServ leaders, several key points emerged that shed light on how the banking industry is approaching AI while maintaining trust.
Emphasis on importance of continuous adherence to core values and working closely with technology stakeholders and partners to ensure ethical AI. Discussed the need for collaboration in the industry and globally to get it right.
3. Quantum Computing and the Future of Encryption:
Several conversations & sessions around the imminent threat that quantum computing provided by the cloud service providers poses to traditional encryption methods and the proactive steps that need to be taken to safeguard digital security. The discussion sheds were around the urgency of addressing this challenge and the collaborative efforts required to adapt to the changing landscape of cryptography.
Many discussions highlighted the urgency of addressing the threat of quantum computing to encryption and the collaborative efforts being made across the financial sector to adapt and protect data. It was a call to action for payments networks and issuers to embrace quantum-resistant cryptographic techniques and work together to secure the digital landscape against emerging threats.
Optimism and Opportunities:
Discussions on the emphasizing that quantum computing could also provide opportunities, such as simulating risk scenarios and detecting irregular patterns related to fraud and impostors. It’s essential to view this challenge with a proactive, optimistic mindset.
4. The Future of Work:
Lots of discussions around how the future of work is evolving rapidly, with a trend towards multiple careers simultaneously, especially for GenZ’s and Gen Alphas. This shift requires financial services to adapt to the changing needs of non-traditional employees, such as 1099 workers.
5. Tremendous growth and opportunity in LATAM.
In LATAM, there exists a remarkable surge of growth and an array of opportunities that revolve around digital identity, fraud prevention, and financial inclusion. The driving forces are:
- Pursuing Financial Inclusion as a Objective: Financial inclusion continues to be a critical goal in LATAM: Financial inclusion is closely linked to digital identity in the region where efforts are being made to use digital identity to bring more individuals and businesses into the financial ecosystem. For many, digital identity can represent a key to prosperity and inclusive growth.
- The Escalation of Synthetic Identity Fraud: Synthetic identity fraud is a growing concern in LATAM and continues to be a significant trend in the realm of digital identity, particularly in a region where a fifth of overall revenue is lost to fraud.
- LATAM’s Prominent Presence at Money 20/20: LATAM (particularly Brazil) made a significant mark at Money 20/20, underscoring its position as a thriving and dynamic market. This vitality is propelled by three pivotal growth drivers: an extensive unbanked population, a youthful demographic, and an impressive 20–30% growth rate in the e-commerce sector.
6. Ecosystem & the Importance of Partnerships:
Partnerships are crucial for fostering innovation. Ecosystems should be built around the right partners to create value, and partnerships should be mutually beneficial.
- Consolidation in the Payments Industry: Consolidation is a natural evolution in maturing industries, and is true particularly with Payments. It is providing efficiency, scale, and access to new markets.
- Efficiency and Economy of Scale: Consolidation can lead to efficiency and economies of scale, benefiting businesses by allowing them to operate more effectively and access previously untapped resources.
- Slower VC Deployment: The pace of venture capital funding is influenced by LPs (Limited Partners) slowing down their investments due to factors like the denominator problem, impacting VC cadence.
7. The Common Thread of DATA:
Certainly, and many organizations here use AI to fight fraud, to make our systems more intelligent to power what we’re doing. I think what is changing, what’s different now is the ability to go after unstructured information much more, in a sense, foundational models that are available to us. But whenever you talk about AI, and regardless of the technique, it always gets back to the Data. The bias doesn’t come from the technique. The bias is there in the data. The technique is just unearthing it. And when you look at things like the tech lash that’s happened, it gets back to trust. I think a lot of the fear, the uncertainty around AI in the consumer realm is they’re not quite sure how their data is being used, what are the controls pertaining to their right to privacy and the ever changing landscape of sovereignty rules and regulations.
Data stored will need to be secured and protected for privacy and should only be used by utilizing anonymized methods.. By taking this proactive stance, we can aid consumers in comprehending the authenticity of the data originating from their core business systems and reference applications. Most importantly, this approach underscores how data is being managed, forming the bedrock of trust. That’s how we can understand the biases and how to really use these powerful new techniques in a very, very responsible way.
It is clear that while technology and innovation are driving forces, they must always be harnessed responsibly to build trust and create a brighter, more inclusive future for all; we are Yugabyte are working towards that!
Thank you for reading!
