The future of financial technologies depends on AI

Maciej Zieliński

03 Jun 2020
The future of financial technologies depends on AI

AI has changed the way financial institutions collect and analyze data over the last few years. It has transformed the business environment by challenging companies and creating innovative business models.

In January this year, the Cambridge Centre for Alternative Finance together with the University of Cambridge Judge Business School and the World Economic Forum presented the results of research on the impact of AI on the financial sector.  From the responses of 151 institutions from 33 countries, a clear picture of AI as a key business driver emerged. Companies are beginning to see how much potential there is in artificial intelligence - most of the FinTechs surveyed already use it to create new services and products.

Application of AI in financial technologies

One of the most important conclusions drawn from the study is the rapidly changing importance of artificial intelligence in everyday business. Approximately 64% of financial institutions expect to use AI in the next two years in process automation, risk management, customer acquisition and service, as well as the creation of new products. Today, only 16% of companies participating in the survey do so. On the other hand, as many as three quarters of respondents expect that artificial intelligence will be very important in the development of the financial services industry in the short term.

As McKinsey & Company writes in its analysis, "companies that have made the strategic decision to implement AI on a full scale and in key business areas quickly see the value of this decision". They achieve attractive return on investment, grow faster and have much higher margins than companies that do not invest in artificial intelligence.

What exactly can AI help in the world of financial technologies? It enables a faster, more accurate assessment of a potential borrower, at a lower cost, taking into account a wider range of factors; it has enormous processing power and helps manage both structured and unstructured data; it is very effective in preventing credit card fraud and relieving customer service centres by powering smart chatbots. And these are just a few examples of how artificial intelligence can streamline your daily business.

Practical applications of artificial intelligence

One of the companies that already take advantage of AI is Underwrite.ai, which processes thousands of data to assess credit risk for people and companies applying for loans. Traditionally, analyses are impractically expensive and too slow to be used effectively in financial institutions in real time. By using artificial intelligence, this process has been optimized so that advanced credit analysis can be used without unnecessary time and large investments.

Examples of revolutionary applications of artificial intelligence in financial technologies can be multiplied. One of them is Kavout, an investment platform using AI to process huge sets of unstructured data and identify patterns in real time in financial markets. Another, Ayasdi uses existing data sets to help financial institutions detect mortgage fraud and money laundering, maximize liquidity and predict customer behaviour. 

Another is Kasisto, who also uses AI in his proposed solutions. For financial institutions, a KAI chatbot has been created, which helps to reduce the number of call centres by offering customers self-service solutions and additionally assists in making daily financial decisions.

- Financial institutions need technology that will help them better engage customers and reach new market segments, while building a stronger brand, said Zor Gorelov, CEO of Kasisto, quoted by PR Newswire. - Kasisto is the best AI conversation platform implemented in large banks around the world, working with millions of users in different countries in multiple languages and channels.

Another example, Feedzai, helps banks manage risk by monitoring transactions and alerting customers in case of suspicious changes in payment behaviour before processing payments. Feedzai has established cooperation with Citibank among others.

The Simundyne platform can also be an interesting example. It allows for quick and safe simulations, which allow for testing an unlimited number of scenarios in a safe environment. 

- After several years of consultations about virtual reality simulation and risk modeling conducted with many global institutions, I realized that traditional modeling methods are no longer up to date - admitted Justin Lyon, CEO of Symudyne, in an interview with MarketsMedia, explaining what prompted him to create the platform. - They do not capture the complexity of real systems and cannot effectively use the enormous power of technology and large data sets.

The Cambridge Centre for Alternative Finance study showed that although technology is a key element of further progress, it does not stand in the way of mass deployment of artificial intelligence. Existing solutions for years have still not been implemented by many companies dealing with financial services on a daily basis, which is attributed to obstacles in the form of lack of trust, complicated regulations and large amount of needed data. Artificial Intelligence can help you to take your business to the next level of sophistication and fully exploit its potential.

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Aethir Tokenomics – Case Study

Kajetan Olas

22 Nov 2024
Aethir Tokenomics – Case Study

Authors of the contents are not affiliated to the reviewed project in any way and none of the information presented should be taken as financial advice.

In this article we analyze tokenomics of Aethir - a project providing on-demand cloud compute resources for the AI, Gaming, and virtualized compute sectors.
Aethir aims to aggregate enterprise-grade GPUs from multiple providers into a DePIN (Decentralized Physical Infrastructure Network). Its competitive edge comes from utlizing the GPUs for very specific use-cases, such as low-latency rendering for online games.
Due to decentralized nature of its infrastructure Aethir can meet the demands of online-gaming in any region. This is especially important for some gamer-abundant regions in Asia with underdeveloped cloud infrastructure that causes high latency ("lags").
We will analyze Aethir's tokenomics, give our opinion on what was done well, and provide specific recommendations on how to improve it.

Evaluation Summary

Aethir Tokenomics Structure

The total supply of ATH tokens is capped at 42 billion ATH. This fixed cap provides a predictable supply environment, and the complete emissions schedule is listed here. As of November 2024 there are approximately 5.2 Billion ATH in circulation. In a year from now (November 2025), the circulating supply will almost triple, and will amount to approximately 15 Billion ATH. By November 2028, today's circulating supply will be diluted by around 86%.

From an investor standpoint the rational decision would be to stake their tokens and hope for rewards that will balance the inflation. Currently the estimated APR for 3-year staking is 195% and for 4-year staking APR is 261%. The rewards are paid out weekly. Furthermore, stakers can expect to get additional rewards from partnered AI projects.

Staking Incentives

Rewards are calculated based on the staking duration and staked amount. These factors are equally important and they linearly influence weekly rewards. This means that someone who stakes 100 ATH for 2 weeks will have the same weekly rewards as someone who stakes 200 ATH for 1 week. This mechanism greatly emphasizes long-term holding. That's because holding a token makes sense only if you go for long-term staking. E.g. a whale staking $200k with 1 week lockup. will have the same weekly rewards as person staking $1k with 4 year lockup. Furthermore the ATH staking rewards are fixed and divided among stakers. Therefore Increase of user base is likely to come with decrease in rewards.
We believe the main weak-point of Aethirs staking is the lack of equivalency between rewards paid out to the users and value generated for the protocol as a result of staking.

Token Distribution

The token distribution of $ATH is well designed and comes with long vesting time-frames. 18-month cliff and 36-moths subsequent linear vesting is applied to team's allocation. This is higher than industry standard and is a sign of long-term commitment.

  • Checkers and Compute Providers: 50%
  • Ecosystem: 15%
  • Team: 12.5%
  • Investors: 11.5%
  • Airdrop: 6%
  • Advisors: 5%

Aethir's airdrop is divided into 3 phases to ensure that only loyal users get rewarded. This mechanism is very-well thought and we rate it highly. It fosters high community engagement within the first months of the project and sets the ground for potentially giving more-control to the DAO.

Governance and Community-Led Development

Aethir’s governance model promotes community-led decision-making in a very practical way. Instead of rushing with creation of a DAO for PR and marketing purposes Aethir is trying to make it the right way. They support projects building on their infrastructure and regularly share updates with their community in the most professional manner.

We believe Aethir would benefit from implementing reputation boosted voting. An example of such system is described here. The core assumption is to abandon the simplistic: 1 token = 1 vote and go towards: Votes = tokens * reputation_based_multiplication_factor.

In the attached example, reputation_based_multiplication_factor rises exponentially with the number of standard deviations above norm, with regard to user's rating. For compute compute providers at Aethir, user's rating could be replaced by provider's uptime.

Perspectives for the future

While it's important to analyze aspects such as supply-side tokenomics, or governance, we must keep in mind that 95% of project's success depends on demand-side. In this regard the outlook for Aethir may be very bright. The project declares $36M annual reccuring revenue. Revenue like this is very rare in the web3 space. Many projects are not able to generate any revenue after succesfull ICO event, due to lack fo product-market-fit.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

Nextrope Partners with Hacken to Enhance Blockchain Security

Miłosz

21 Nov 2024
Nextrope Partners with Hacken to Enhance Blockchain Security

Nextrope announces a strategic partnership with Hacken, a renowned blockchain security auditor. It marks a significant step in delivering reliable decentralized solutions. After several successful collaborations resulting in flawless smart contract audits, the alliance solidifies the synergy between Nextrope's innovative blockchain development and Hacken's top-tier security auditing services. Together, we aim to set new benchmarks, ensuring that security is an integral part of blockchain technology.

Strengthening Blockchain Security

The partnership aims to fortify the security protocols within blockchain ecosystems. By integrating Hacken's comprehensive security audits with Nextrope's cutting-edge blockchain solutions, we are poised to offer unparalleled security features in our projects.

"Blockchain security should never be an afterthought"

"Our partnership with Hacken underscores our dedication to embedding security at the core of our blockchain solutions. Together, we're building a safer future for the industry."

said Mateusz Mach, CEO of Nextrope

About Nextrope

Nextrope is a forward-thinking blockchain development house specializing in creating innovative solutions for businesses worldwide. With a team of experienced developers and blockchain experts, Nextrope delivers high-quality, scalable, and secure blockchain applications tailored to meet the unique needs of each client.

About Hacken

Hacken is a leading blockchain security auditor known for its rigorous smart contract audits and security assessments. With a mission to make the industry safer, Hacken provides complex security services that help companies identify and mitigate vulnerabilities in their applications.

Looking Ahead

As a joint mission, both Nextrope and Hacken are committed to continuous innovation. We look forward to the exciting opportunities this partnership will bring and are eager to implement a more secure blockchain environment for all.

For more information, please contact:

Nextrope

Hacken

Join us on our journey to deliver top-notch blockchain tech and a safer future for the industry!