AI has already turned into a hot topic among BigTechs and predictions indicate that in 2020, companies within the financial sector will invest $11 billion in AI, in a market that is valued at $191 billion. Making the financial industry leaders in AI expenditure out of all other industries.
AI implications are changing the present and the future of payments for consumers as well as businesses.
AI has already turned into a hot topic among BigTechs and predictions indicate that in 2020, companies within the financial sector will invest $11 billion in AI, in a market that is valued at $191 billion. Making the financial industry leaders in AI expenditure out of all other industries.
Alibaba is one of China’s most notorious representatives among the BigTechs. With the assistance of AI technology, Alibaba and Tencent have further disrupted the financial services industry with a new offering: a 1-second loan decision for their users.
The procedure consists of a 3-minute application process (with most KYC information available from the user profile data), a 1-second AI decision to assess whether a candidate can meet repayment schedules and zero staff members involved in the entire process. This is also known as the 3-1-0 principle, applied to micro-loans.
The second principle, 2-1-2, focusing on loans, consists of a 2-minute application procedure, 1-second for auto-review, and a 2-hour algorithmic settlement.
The two companies are disrupting China’s financial sector as they have already given loans to more than 100 million consumers. A number of these loans have been given out to clients who do not qualify for a loan from conventional banks. The eligibility for a loan is being assessed utilizing AI through the individuals’ income and payment ability. Normally speaking, paying for your utilities in time allows you to be assessed as eligible for a loan.
This is possible due to the vast amount of information these companies possess as they process 90% of the mobile payments that take place in China. The total value of transactions handled by Alibaba and Tencent in 2018 was estimated at $25 trillion.
This new offering represents a single example among many disruptive financial services that are steadily changing the face of the payments world with the assistance of AI technology.
