How fintech will change the way business operates in Australia
Automated data management solutions such as AutoEntry are disrupting the Australian finance scene by simplifying accounts preparation for accountants and bookkeepers.
Launched last year with over 25,000 businesses set up on the platform worldwide, AutoEntry captures and analyses scanned and photographed purchase and sales invoices, receipts, bank and card statements, automating data entry into accounting solutions such as Xero, QuickBooks, MYOB and Reckon. It helps users to access their financial records remotely, and upload paper documents such as bills invoices and receipts at their convenience via a mobile app.
Its founder and CEO Brendan Woods offers his view on how the growing industry will shape the way business is conducted in the country...
With the continuation of Moore’s Law and computing power predicted to exceed that of human brains by 2045, it’s a time of extraordinary technological growth and social change. Technology is reshaping the entire financial services ecosystem, from bookkeeping and accounting, payments to investment management and insurance. And in so doing, it’s driving enhanced working efficiencies and conveniences, whilst significantly contributing to the wealth of the economy.
Legacy institutions which once held a stronghold over market share are being challenged by fintech innovators disrupting the industry and forcing existing businesses to ‘adapt or die’. In fact, PwC Australia found that a telling 83 percent of traditional financial services firms believe their business is at risk from a disrupter.
The financial services sector is a major contributor to Australia’s economy, employing thousands and providing over $140 billion to its GDP. And as the gateway into Asia, the Australian market has become an increasingly attractive proposition for investors.
In fact, according to research from KPMG, Australia received more than $626 million in fintech investment last year, with Sydney now ranking in the top 10 fintech hubs. With many global banking brands setting up their Asian headquarters in Sydney, further development of fintech ecosystems is also expected across other Australian cities, such as Melbourne and Perth.
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As well as its locality, key to growth within the region has been the reduction of certain legislative red tape, following liaisons between the government and the Australian Securities and Investments Commission (ASIC). This has enabled early stage start ups to test APIs in a regulatory ‘sandbox’ without first securing a financial services license, reducing costs, regulatory risks and time to market.
So with significant sums of capital funding future fintech growth, what are the major trends afoot, and how will they impact business?
Focus will remain on one of the most institutionalised sectors within financial services - insurance, with analysts predicting that ‘Insurtech’ will continue to advance as it catches up with the pace of change seen in other sectors. This may involve the use of AI and robotics to take on certain admin functions for brokers, or purpose built apps to automate insurance premiums and quotes for customers.
Digital payments will evolve to be worth $1.8bn by 2020, as innovation diversifies how we move our money. Mobile wallets such as Android pay, launched in Australia last July, and developments within fraud detection will be some of the key trends to shape the trajectory of the industry. Within this, Bitcoin, continues to command headlines as the world’s ‘first decentralised digital currency’. Powered by blockchain technology, Bitcoin was first created by the enigmatic computer scientist known as ‘Satoshi Nakamoto’ in 2008. Its purpose was to circumvent state sanctioned currency controls and streamline online transactions by removing third parties. Supporters of the movement are excited by its endless possibilities, with blockchain theoretically allowing users to transfer goods, services and IP as well as funds, by replacing our existing centralised system.
Sustained growth within artificial intelligence (AI) is set to drive global GDP 14 percent higher by 2030, chiefly derived from increased productivity gains in the workplace. This includes the automation of routine tasks to enable employees to focus on value-adding work. One sector these technologies have seen significant growth in is accounting and bookkeeping, with 83 percent of accountants claiming that an understanding of technology is now as important as knowledge of the trade itself.
The future is digital, so to stay ahead, firms should incorporate automated, mobile, and cloud-based technologies into their IT infrastructure where possible, to engage with customers on their terms and maintain relationships. The right application of technology will also empower businesses to make redundant outdated and time consuming practices, whilst transforming service delivery.
With its strength within financial services, coupled with local talent and readily available funding, Australia is set to become a fintech superpower. As well as impacting the growth of other professional services, this will position Australia to capitalise on new trading opportunities from growing economies such as within Asia, ultimately providing greater efficiency for local businesses and more personalised financial services for consumers. With the development of existing trends, and the emergence of new ones, the next few years are certain to be an exciting time of change and opportunity.
Chinese Firm Taigusys Launches Emotion-Recognition System
In a detailed investigative report, the Guardian reported that Chinese tech company Taigusys can now monitor facial expressions. The company claims that it can track fake smiles, chart genuine emotions, and help police curtail security threats. ‘Ordinary people here in China aren’t happy about this technology, but they have no choice. If the police say there have to be cameras in a community, people will just have to live with it’, said Chen Wei, company founder and chairman. ‘There’s always that demand, and we’re here to fulfil it’.
Who Will Use the Data?
As of right now, the emotion-recognition market is supposed to be worth US$36bn by 2023—which hints at rapid global adoption. Taigusys counts Huawei, China Mobile, China Unicom, and PetroChina among its 36 clients, but none of them has yet revealed if they’ve purchased the new AI. In addition, Taigusys will likely implement the technology in Chinese prisons, schools, and nursing homes.
It’s not likely that emotion-recognition AI will stay within the realm of private enterprise. President Xi Jinping has promoted ‘positive energy’ among citizens and intimated that negative expressions are no good for a healthy society. If the Chinese central government continues to gain control over private companies’ tech data, national officials could use emotional data for ideological purposes—and target ‘unhappy’ or ‘suspicious’ citizens.
How Does It Work?
Taigusys’s AI will track facial muscle movements, body motions, and other biometric data to infer how a person is feeling, collecting massive amounts of personal data for machine learning purposes. If an individual displays too much negative emotion, the platform can recommend him or her for what’s termed ‘emotional support’—and what may end up being much worse.
Can We Really Detect Human Emotions?
This is still up for debate, but many critics say no. Psychologists still debate whether human emotions can be separated into basic emotions such as fear, joy, and surprise across cultures or whether something more complex is at stake. Many claim that AI emotion-reading technology is not only unethical but inaccurate since facial expressions don’t necessarily indicate someone’s true emotional state.
In addition, Taigusys’s facial tracking system could promote racial bias. One of the company’s systems classes faces as ‘yellow, white, or black’; another distinguishes between Uyghur and Han Chinese; and sometimes, the technology picks up certain ethnic features better than others.
Is China the Only One?
Not a chance. Other countries have also tried to decode and use emotions. In 2007, the U.S. Transportation Security Administration (TSA) launched a heavily contested training programme (SPOT) that taught airport personnel to monitor passengers for signs of stress, deception, and fear. But China as a nation rarely discusses bias, and as a result, its AI-based discrimination could be more dangerous.
‘That Chinese conceptions of race are going to be built into technology and exported to other parts of the world is troubling, particularly since there isn’t the kind of critical discourse [about racism and ethnicity in China] that we’re having in the United States’, said Shazeda Ahmed, an AI researcher at New York University (NYU).
Taigusys’s founder points out, on the other hand, that its system can help prevent tragic violence, citing a 2020 stabbing of 41 people in Guangxi Province. Yet top academics remain unconvinced. As Sandra Wachter, associate professor and senior research fellow at the University of Oxford’s Internet Institute, said: ‘[If this continues], we will see a clash with fundamental human rights, such as free expression and the right to privacy’.