Fintech
“The Beginning of Artificial Intelligence” and Embedded Finance: In Conversation with Visa at the Dubai FinTech Summit
Earlier this month, The times of fintech participated in the second edition of Dubai Financial Technology Summitto capture all the emerging industry trends across the Middle East.
During the two-day event in Dubai, we sat down with Vanessa Colellaglobal head of innovation and digital partnerships at Visato find out his opinion on some of the most important issues currently affecting the world of finance.
As a global leader in payments, Visa spans a wide range of regions and sees a wide range of different approaches and use cases around the world. Colella explained how the goals of some of the largest tech companies may differ from those of smaller fintech companies.
“The big tech players and global tech platforms we have worked with often innovate around new technologies, new business models or simply new industries they want to enter. These companies tend to derive a good portion of their innovation from economies where the payments infrastructure is quite mature.
“Whereas in fintech, these kinds of innovations tend to come from economies where, at least for a decent portion of the population, the payments infrastructure might be a little more fragile or inaccessible to people.
“So this is one example: we have innovation driven by companies investing $40 billion a year in research and development of a particular type, and we have other innovations coming from the fintech community, to solve different problems. I think a lot of that comes from the characteristics of the infrastructure, the different markets, where you see very different models.”
The power of integrated finance
Integrated finance it is a term that has generated considerable interest and enthusiasm in the fintech sector for several years. Colella discussed why she believes this publicity is warranted and how payments integration could have a positive impact on the global economy.
“There is a $1.7 trillion gap between goods moving around the world and liquidity in the supply chain. So if you think about it, it means that some suppliers have to wait to get paid. If you are a large, important supplier, you will be able to say that I get paid on Tuesdays.
“If you are a little long, you will have to wait for the whole process and until I can get paid, because I have no power to set the terms. This means that a significant part of the world economy is actually financed by the smallest and longest tail of global supply chains, which is completely counterintuitive.
“These are not the businesses that can afford to finance everything. What if we could integrate payments throughout the supply chain and logistics? And what can you use to reduce that $1.7 trillion gap, and then lift that burden off the long-tail suppliers. Then you would see its growth and GDP increase in many places around the world.”
Leverage artificial intelligence across all operations
As various industries continue to leverage leverage artificial intelligence (AI) to streamline various processes and solve a number of pain points in all aspects of their operations, the financial sector has also acquired the technology.
In fact, AI has become the buzzword of not just the last year, but probably at least the last three years. But Visa has been using the technology long before that.
“We have been using artificial intelligence for 30 years,” Colella explained. “We use it to combat investment fraud. We used machine learning to optimize our models. Visa stopped more than $40 billion worth of fraud last year, up from $27 billion the year before.
“So there is a long practice of using cutting-edge technologies to ensure that we are keeping ecosystems safe and healthy. At Visa, we don’t just think about risk and fraud, but about loyalty, about hyper-personalized shopping experiences, about a different kind of customer support, about different kinds of customer service powered by AI.
“I think this is just the beginning for artificial intelligence. Now, we are still early in the generative phase and researchers are still discovering things too. That tells you how early we are with technology, but I think technology is only part of it.
“We always have to consider what new technologies are. What is the new behavior of people and what kind of industrial structure is established? We are still at the beginning of all three.”
Is Dubai leading the AI league table?
Dubai has established itself as one of the most attractive emerging regions for finance and is fast becoming a global fintech hub. Indeed, Dubai has seen a surge in fintech investment in recent years, with total fintech funding reaching $2.3 billion in 2023 alone.
Colella explained how the region became a pioneer: “I think, as we sit here in Dubai, it’s quite interesting what the UAE has done in terms of appointing the Prime Minister of AI in 2017 – well before the current fascination with what artificial intelligence can do.
“Whenever you have new types of behavior and new infrastructure, no one can just flip a switch and solve a use case. No startup succeeds overnight: on average, it takes about seven years.
“This region is quite interesting not only for capital investment, but also foresight on what the government will need to do, how the region will attract talent, how it will create the necessary conditions for many different sectors. types of thinkers to thrive?
“I think this is important for generative AI in particular, because of the costs associated with it, the work being done is very concentrated.
“We have been used to living for several decades in a world where technology was equally distributed. In the beginning of the Internet there were only a few service providers, but this has become very accessible with many developers. The cost of generative AI means that, right now, the work is very concentrated on just a handful of players.
“The kind of work that’s happening here and other places around the world, making some of these models open source and allowing people to develop, is a really positive development of what’s happening here.”