In 2017, the chancellor of the exchequer claimed fintech is leading the UK’s fourth industrial revolution and transforming the way we live and conduct business. And, with investors having pumped over £825m into fintech disruptors last year, the sector is not set for a slowdown any time soon.
Each week, a new application of artificial intelligence (AI) or machine learning hits the headlines – whether it’s AI assistants, investment aids or predictive models. Under significant pressure to lower costs and improve the volume, speed and quality of customer information and financial services, bosses are looking to boost business functions through automation.
Over time, these robots learn from data patterns and past behaviour to make high-speed assessments and perform most operational functions 24 hours a day, seven days a week. With competition increasingly growing in the financial world, automation provides companies with the opportunity to accelerate key processes and provide a more efficient service.
This is particularly useful for fintech innovators who can harness technology to offer a growing range of tools and services to clients, from mobile payments to crowdfunding and online lending. In the case of alternative business finance, automated credit checks and online applications are replacing lengthy negotiations between clients and bank managers. All it takes is a computer, smartphone or tablet to access a range of funding options at affordable rates.
However, whilst automation represents innovation and advancement, machine learning is not and should not be used to replace human interaction with clients. When it comes to business lending, a “computer-says-no” algorithm leaves many bosses without the chance to negotiate or justify their need for a loan. Considering that many Small businesses do not have filed accounts, automating in the name of mechanised efficiency means unfair rejection.
The issue here is that people – whether a business owner or not – will always place a premium on personalised customer experience. There is no better way to overcome an issue than by speaking in person.
For precisely this reason, robotic process automation (RPA) is only effective if it is used to free up human advisers so they can add a personal touch to the lending process. Humans build emotive and long-lasting relationships with customers – chatbots don’t.
At Fleximize, we have created an efficient but relationship-driven approach, using automated credit-checking software to produce a fast process from initial application. A significant part of our assessment is still made through online data, such as credit scores and behaviour, but we believe there are better ways to predict a company’s growth. That’s why we take the time to learn as much as we can about every business.
Whilst it is undeniable that we are heading towards a world where an exponential growth in data will transform the finance industry for good, there will always be roles that only people can perform because of emotional and cognitive requirements. With that in mind, the alternative finance industry needs to find an effective equilibrium between automation and manual practices so that one compliments the other.
As much as fintech is concerned with data, finance and algorithms, the end user is still very much a person in need of conversation, empathy and advice. Any credible organisation should be combining the two for the good of its customers.
Peter Tuvey is co-founder of alternative finance provider Fleximize