Ian Gauci on Fintech and AI

Frederik Bussler
Nov 1 · 3 min read

From October 30th to November 1st, hundreds of blockchain professionals from industry and academia are joining forces in Athens, Greece at Decentralized 2019 to engage in workshops, talks, and networking. One prominent keynote speaker was Ian Gauci from GTG Advocates, whose talk was titled Fintech and AI: Disintermediation Through Innovation.

Gauci began his talk with the history of the Internet and financial services:

“We’re celebrating the first 50 years of the Internet — it changed our lives forever but also changed existing legacy structures.

Today, innovative technology, savvy users, and the digital economy are testing the metal of the existing financial service industry. The industry is morphing because of this innovation.

We see the FSS, South Korean authority, they’re embracing RegTech and SupTech using Ai and big data to regulate existing financial services providers. AI is such an important force, undisputed.”

Clearly, the rise of the Internet has had dramatic implications, with many interesting examples of innovation to look at:

“One example of this innovation is robo advisors: The automation of financial services. An industry led by tech with the US leading the pack. There’s massive, disruptive potential. This industry started in 2013 with approximately $2.3bn assets held by robo advisors. It ended up in 2017 with 800% growth, we’re looking at $20bn USD worth of assets.

It’s estimated that by 2020 that’ll be $1.1t worth of assets.”

With all this talk on “automation,” Gauci clarifies what it really means:

“Automation is a simple function deriving from software, just like blockchain. It can have different flavors, like automation without intelligence based on pre-determined input. It’s very similar to RPA, robotic process automation, which dis-intermediates the human function.

Intelligence comes in to give autonomy to autonomous software. The capacity to assess and learn from the situation. This poses existential questions. This is something regulators are currently looking at.

To be autonomous, we need data to feed the software. We already have legislation like GDPR to fuel further data through open API interfaces. In the future, mobile phones with AI may be our personal advisors. Total dis-intermediation through technology. Challenging the existing status quo in regulation and regulatory functions of certain regulators.

Regrettably, all the guidances are very static in their approach. They don’t tap into the new innovations. Automation will dis-intermediate the human. We need to tap as well into what’s changing and monitor the tech to ensure it’s auditable.”

Essentially, with all this dis-intermediation, we need to take precautions:

“We need to ensure the technology is safe.

We should think of an innovative way of doing sandboxes. One that is multi-sectoral, with financial services, tech, and data protection authorities. Data is the blueprint of the software. They ensure the software is apt for the services offered.

We’re after creating transparency and liability factors when it comes to software. The regulatory focus needs to evolve.”

Democratizing AI.

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