HOMELESS people as well as banking and commerce will benefit from the advent of financial technology in Scotland, according a leading proponent and fintech expert.

Kent Mackenzie, Edinburgh-based global head of fintech at Deloitte, says financial technology is recognised as being able to axe hours of administrative work for bankers and business people but also that the the worth of such applications will reach well beyond the office.

Fintech can be used to build a digital background for people without an extensive conventional financial history that could mean access to mortgages and other financial services often outwith their reach.

In business, systems like the one his team created on credit management, which has meant time pushing paper has been slashed and the elevated element of staff’s role increased, can be developed to create a detailed digital credit landscape.

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In one commercial example, the automated credit management system cuts a ten-day activity to a matter of minutes.

He said: “So basically when a bank makes a loan out to a company, they have to gather in a whole bunch of information before they make that loan, once they’ve made that loan they have to gather that information every month to see if that business is still performing the way it should, and they have to check that information against a whole bunch of conditions and covenants.

“We built an AI solution that would take that whole process down to four minutes.

“You can imagine the saving, you can imagine the customer experience there, you can imagine relationship managers being able to spend their time doing more meaningful things than pushing paperwork around, so the benefits of that are quite significant for the organisation.”

Disruptive technology, or game-changing breakthroughs such as artificial intelligence, robotics and digital identity, along with blockchain “albeit the user cases are fairly undefined around blockchain”, are, he said playing an increasing role in a wide range of businesses.

He says: “On the advisory side we’ve done work around advising our clients to create chatbots and how to put chatbots into the business, with customers interacting with a chatbot rather than with a human."

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Mr Mackenzie, above, added: “You have to start to really think about that and you think, ok, it is one thing making sure the information is accurate but there is a whole other element around the ethics and so on with that – do we need to make customers aware that they are chatting with a chatbot and not a human?

“What happens if the chatbot gets it wrong, where does the liability sit?

“What about the tone of voice we need to put in for the chatbot?

“Our advisory business is to help companies think about that type of stuff.”

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He said the applications are far reaching: “We’ve been working with companies to think about how do you reimagine credit scoring, for example, for people who are maybe new to country but don’t have a wealth of credit history, that whole point around financial inclusion but the marginalised parts of society and solve some of the inequality we have around financial services.

“Until relatively recent days gone by to get a bank account you would need to show three years worth of payment data, three years worth of addresses, three years worth of employment.

“If I’m on the fringe a little bit and have maybe had a bit of a rough time, and it is very difficult for me to do that, it excludes a swathe of people.

“Financial services is a basic human right in my view.

“Fintech and this whole proliferation of data means that if I don’t have an address history and I don’t have an employment history, if I don’t have another bank account, well, actually there’s lots of other places you can go to learn about me.

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“That information is out there and you use machine learning, AI and data analytics to plot a view on, and even if it is a thin amount of data, plot a perspective on what people’s needs are.

“Solving and addressing the homeless troubles that we have in this country, fintech financial inclusion has got an absolute role to play in that level of support.
“So, yes, it has the opportunity to make this concept of financial services a basic human right come to life.”

He also says: “The march of the robots and people think holy s*** we’re in trouble, we’re not going to have jobs any more.

“If I take the relationships managers who were spending ten days moving around bits of paper trying to pull figures out of different formats and then photocopying and scanning and moving around, with that type of example 80 per cent of their time was doing that and 20% of their time with clients.

“Their job won’t go away, what will happens is 40% of the time or 30% of the time will be spent moving paper, and 60% or 70% will be time spent on the elevated part of their role which is interacting with their clients.”