Weekly Analysis And Opinion Highlights – 1 May 2023

And we’re kicking off the week with new analysis and opinions on fintech with banking, Artificial Intelligence,  ESG, crypto, and more. Dive into the latest fintech insights and have a great start to the week!

China, America and why not all growth is equal (Financial Times)
Last week was the tenth anniversary of the Rana Plaza factory collapse in Bangladesh, in which 1,100 garment workers were killed because a shoddily constructed factory collapsed on top of them. It turned out that the factory was making goods for major global brands. The managers who took the decision to outsource to unknown individuals way down the production line were just doing what Finance 101 would tell them to do: move expense off the balance sheet, and treat labour like a cost not an asset. Never mind the risks hidden in plain sight, even those that result in death and despair. The global trade system as it stands isn’t working well. In his speech, Sullivan talked about the US maintaining its commitment to the WTO, while also recognising the key question of today: “How does trade fit into our international economic policy, and what problems is it seeking to solve?” As I’ll argue further in future, it should start by seeking to solve the problem of concentration and competition. Read more

Is there a lack of confidence around ESG reporting? (Fintech Global)
Deloitte has found less than half of professionals are confident in the ability of their firms’ financial reporting teams to gather ESG metrics for regulatory compliance purposes.  Only 16.4% of professionals reported that their organisation had an ESG controller, however, professionals from organisations that have an ESG controller report confidence in their financial reporting in this area that is 30 points higher than the confidence levels of those without – 75.5% to 45.3%. At the time of the poll, 41.6% of respondents said that their organisations have no plans to hire dedicated controllership staff, while 7.2% plan to hire an ESG controller in the year ahead. Read more

How fintech can improve data access for finance institutions (Fintech Magazine
Fraser Stewart, Co-Founder and Chief Commercial Officer at Lyfeguard, explains how the fintech sector can improve data access for financial institutions. Data is the new currency in today’s financial landscape, and the fintech industry is at the forefront of leveraging technology to solve problems and create better financial solutions. Financial organisations are competing to digitally transform their operations, and, in a world where the economic back drop is uncertain, customers are demanding so much more, with increased volumes of data, new data handling policies and cyber threats on the rise. Differing ways of managing data can act a useful tool in solving some key issues within the finance industry. Read more

How can developers train AI models without violating copyright? (
To build a large language model (LLM), you need hundreds of terabytes (if not petabytes) of training data. But where do you, as a developer, get all this data? And once you’ve built your model, how can you be sure that you don’t get hit with a lawsuit if it turns out that you’ve unknowingly used copyrighted or inaccurate data? In some instances, AI developers have been found to have gathered or scraped hundreds of gigabytes of pirated ebooks, proprietary code, or personal data from online sources – without the consent of the subjects or authors involved. Given that the standard for an LLM today is one that can recite poetry, write Python, and explain quantum physics, that creates a competitive incentive for companies to build the biggest models possible. Read more

How is AI impacting the insurance industry? (Fintech Global)
Idolised by visionaries, dismissed by sceptics, artificial intelligence (AI) undeniably has the potential to transform entire industry ecosystems, according to InsurTech Tractable. The scale of AI advancement is unlike anything seen before, with companies like OpenAI releasing ChatGPT, then GPT-4, quickly followed by the AI language models from Google, Bard, and Microsoft, Bing. This AI explosion unfolded in just a matter of weeks and tech leaders across the globe leaped into the game, questioning both how their businesses should be leveraging the tech, and what risks it presents as it continues to advance.This happened against a backdrop of a rocky start to the year, with skyrocketing inflation, labour shortages mixed with workplace layoffs, an escalating war in Ukraine and subsequent continued supply chain disruptions. Read more

Crypto: a source of safety and geopolitical strength? (Fintech Magazine)
Todd Crosland asks whether crypto is a source of geopolitical strength and ponders whether another industry might be lost to American over-regulation. Born partly in reaction to the 2008 financial crisis, cryptocurrency was created as a radical alternative to the traditional financial industry. Rewind 15 years: banks that were “too big to fail” had failed and subsequently caused mass panic across the globe. A few weeks ago, there was the second biggest collapse of a bank in US history, Silicon Valley Bank. This time, with cryptocurrencies a prominent financial instrument in the global economy, bitcoin has increased by 40% since the fall of the bank. Whatever the reasoning, bitcoin has proven to be a winner during this latest wave of economic uncertainty. Read more

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