Artificial Intelligence in India’s Fintech
With a growing number of FinTech startups, India is considered to be one of the top five global FinTech hubs. The country’s population of over 1.3 billion is highly under banked, with digital penetration growing rapidly. This, combined with the recent demonetization and push towards a cashless economy, make it an exciting space for global Fintech.
As the FinTech space grows, Artificial Intelligence (AI) has been seen to be gaining significant attention. AI has the potential to transform the way we conduct financial transactions, and several Indian startups are already capitalizing on this technology.
- AccuraCap: Founded by a computer scientist and a finance whizz, AccuraCap is a fund management firm that runs on mathematical modeling, data analytics, and artificial intelligence. With capital worth 80 million Rupees (approximately $1.2 million), returns have been off the charts. PicoPower, a small cap fund run by the firm, has shown returns of 185% in four years, with Apha10, a large cap fund, earning 101%. These returns are significantly higher than comparable funds, with a lower risk profile. AccuraCap uses a model created by the founders, which looks at millions of data points in terms of business fundamentals, as well as market performance over the past 5-7 years. While there have always been doubts regarding the effectiveness of AI, AccuraCap is ready to shatter all doubts and takes over the fund manager’s role.
- Rubique: Rubique, previously known as Bestdealfinance, is an Indian lending platform that brings borrowers and lenders together and helps in the final closure process. The online platform allows you to apply for a loan, with the matchmaking algorithm finding eligible lenders. The service aims to make loan disbursement a quick and convenient process, by matching borrowers to the most appropriate lender. For example, if the borrower does not meet the required credit eligibility criteria, the team ensures you will be matched to other financial institutions. The company has on-boarded over 50 banks and NBFCs, and disbursed over 40 million Rupees within the first year of operations.
- Lakshmi: In November 2016, Citi Union Bank (CUB) became the first bank in India to launch a robot to deal with customer queries. The pilot robot, titled Lakshmi, interacts with customers and answers questions ranging from account balance and bank charges, to interest rates on loans, and movements in exchange rates. Based on the IBM Watson artificial intelligence engine, Lakshmi learns as she interacts with customers. Furthermore, the robot is programmed to be discreet; only generic questions are answered through voice, while answers to more personal queries are displayed on the screen.
While these are just a few example of AI being applied in India’s FinTech space, the future potential for this technology is immense. Currently there is further work being done on Chatbots, robo-advisors, and AI algorithms in the lending space. The biggest challenge in the area however, lies in gaining the trust of consumers.
How much would you really trust a computer with decisions related to your finances?