Financial Technology

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Tag: ai

FinTech 101: What is a Green Bank?

What Is a Green Bank?
You may have heard the term “Green Bank” and wondered what it meant. This short article will explain the term and concept behind it.

Green Banks in a Nutshell
A green bank is a bank that exists for the sole purpose of battling earth climate change by funding projects that may be able to decrease the global carbon emissions and increase the use of alternative and renewable fuels and energy. They tend to support infrastructure spending in wind, solar, and other renewable energy space.

Green Banks: Functional Model
Green banks are not climate charities. Their funding is expected to be paid back with a profit for the bank. Currently, they are supported by some states in the U.S. and also by private funding. Green Banks utilize philanthropic and public funds. They generally fund energy projects that beyond the research stage and “good to go”. The Coalition for Green Capital (CGC) is a nonprofit agency that is deeply involved in advocating for green banks’ continued development.

Where Did the Idea for Green Banks Originate?
The idea for green banks started in 2008 when two entrepreneurial-minded, Ken Berlin and Reed Hundt, came up with the concept as part of the Obama transition team’s plans for promoting cleaner energy changes in US society. A proposal to enact federally supported green banks was attached to the American Clean Energy and Security Act. The concept never made it as legislation at the federal level. Green bank supporters were not daunted. Consequently, green bank advocates persuaded some states to take up the cause.

Green Banks: Some Statics
Currently, there are at least ten states that have at least one green bank. In addition, they are in the early stages of catching on globally as well. They also exist in Australia, the United Kingdom, and Malaysia. Within the U.S., green banks have already been involved in the funneling of some $3 billion in funds for clean-energy projects.

Green Banks: Their Future Development
With the advent of the Biden presidency, green banks may again find a firmer footing at the federal level. Indeed, in December 2020, Mr. Biden proposed the idea of a national green bank. They appear sure to gain more traction internationally as the desire to dampen climate change takes hold.

Jacob Parker Bowles Mobile Payment Apps (3)

The Role of Artificial Intelligence in Finance

You’ve probably heard of the word fintech before, short for financial technology- just about everyone has these days. It’s usually a trending hashtag on Twitter. However, for those outside the finance sector, your understanding of what financial technology actually is and how it affects the industry may be somewhat limited. I don’t mean to insult anyone’s intelligence here; I simply mean that unless you actually keep up with trends in the finance industry, it would be difficult to have a firm understanding of the technologies that are being applied to it, as they’re constantly evolving.

Up-and-coming financial technology companies have the user in mind, as they work to optimize the user experience and streamline financial transactions through artificial intelligence. Artificial Intelligence, often abbreviated AI, can be thought of as a group of related technologies training machines to respond to and simulate the human brain. These related technologies include: “natural language processing (improving interactions between computers and human or ‘natural languages), machine learning (computer programs that can ‘learn’ when exposed to new data) and expert systems (software programmed to provide advice).” While this is all well and good for everyday people who just want to simplify their finances, banks are being forced into a position where they will have to either respond and adapt, or fail.

The financial landscape is rapidly changing, and it isn’t sticking around for stragglers. According to BBC News, “Machines are now responsible for most of the activity on Wall Street.” The stock market floor of a few years ago, with traders frantically shouting and signaling to make deals on commodities, is not the floor of today. Computers can respond in a matter of nanoseconds, whereas the average human response time is half a second. When it comes to stocks, every millisecond matters, so machines and high efficiency traders trained in these machines have started to take the place of traditional traders.

With Wall Street already responding to changing technology, it’s only a matter of time before banks and financial services will be forced to respond as well. As the latest Technology Tool for Today (T3) conference demonstrates, a number of finance companies are eager to jump on the bandwagon. Fidelity’s eMoney conducted a live AI demonstration of an interaction between Alexa and eMoney’s eMX personal finance platform in which Alexa could answer questions such as how much is in one’s bank account. EMoney also showed off a new virtual reality 3D financial planning experience where users can learn how to manage their finances through an online guide and communicate with an advisor afterwards through a video session- all from the convenience of home. Another fintech company, Redtail Technology, introduced a newer, more user-friendly version of their CRM software.

While AI presents a major disruption to business across multiple industries, the finance industry realizes its incredible potential. The finance industry is very much user-dictated, so any technology that will enhance the customer experience and make them more likely to trust in a bank’s services cannot really be a bad thing. Banks will simply need to rise to the challenge, because as research suggests, AI could double economic growth rates in 20 countries and increase labor productivity by 40 percent by 2035. According to Forbes:

Artificial intelligence provides banks, capital markets firms and insurers with an enormously powerful set of tools to transform and streamline some of their most fundamental financial processes. The challenge for many, however, is not only to identify and adopt the best AI technologies but to reshape and rethink their operating model and talent development to take advantage of AI’s transformative capabilities.

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