• Platform

Navigating the AI landscape in fintech

1 October 2023

As Head of Data Science and Analytics at JUMO, Niklas von Maltzahn is a driving force behind the company’s mission to improve financial inclusion and empower people around the world. With extensive experience in data science and a deep understanding of the techniques and tooling artificial intelligence and machine learning provide, Niklas leads a team that’s committed to using data-driven insights to revolutionise the fintech industry. He gives us his take on navigating the AI landscape in fintech.

‘Artificial intelligence (AI) has become a buzzword that’s thrown around in meetings, tech conferences and casual coffee shop conversations. While some view it as an existential threat, I see it as a tool – a powerful one that can augment our capabilities and redefine how we operate in the fintech sector, especially at JUMO. Additionally, most of the value these tools and techniques give us can be passed on directly to the customer.

The narrow genius of AI

‘While public sentiment around AI often leans towards the idea of an omnipotent machine, most AI, in reality, has a narrow scope. Let’s take Chat GPT for example. It mimics human-like text-based conversations but it’s unable to evaluate the creditworthiness of our customers. AI excels at what it’s designed to do, but it can’t wear all hats. This underscores the importance of human practitioners who can wisely apply these AI tools where they’re most effective. A tool is only as good as the person wielding it, and that holds true for AI in Fintech. While AI is powerful, it’s not a plug-and-play solution. Additionally, most of the recent hype is centered around solving problems in the computer vision and natural language domains. This does little for driving value for the end customer.

How we make AI work at JUMO

‘At JUMO, we’ve been leveraging AI in our workflows for many years, particularly in developing our prediction engine. It’s a novelty for much of the rest of the world, but not for us.

AI entails way more than a technological shift; it’s a paradigm shift in how we understand finance. Traditional lenders use age-old methodologies to assess creditworthiness, which may be effective, but they’re also limited. Many of our customers, for example, do not form part of the ecosystem these traditional methodologies employ to assess creditworthiness. We’ve adopted a more progressive approach and cutting-edge techniques. Our decisioning models are powered by best-in-class techniques that analyse customer behaviour before and after loan repayment. Our most recent R&D is showing very promising results using transformer architectures – the AI technique that powers ChatGPT. Watch this space! Our AI models are able to make incredibly accurate predictions about customer behaviour.

AI is an enabler that drives up our predictive accuracy allowing us to serve more customers.

‘Our team of seven is not only up to date with the latest research but also frequently tests new techniques to assess their efficacy. This helps us keep our AI-driven solutions current and pioneering. We use state-of-the-art frameworks enabling us to adapt swiftly to the fast-evolving AI landscape.

The leadership equation

‘In a way, integrating AI into a company’s operations isn’t just a technical challenge; it’s also a leadership one. As someone at the helm, you have to decide not just which tools to adopt but also how to use them to foster creativity and diversity within your team.

AI in fintech is complementing, not replacing

‘On a related note, let’s put to bed the narrative that AI will “take our jobs.” In my experience, AI serves as a brilliant co-pilot, assisting in tasks ranging from data analysis to software development. Take GitHub Copilot for instance, an AI-powered tool that suggests code as you write. It’s not perfect, but it does boost efficiency by about 70 to 80%. But here’s the catch: you need to have a foundational understanding of what you’re doing to reap its benefits fully. For a seasoned developer, Copilot is a game-changer, but if you’re a junior relying solely on it, you’re setting yourself up for failure.

What is the future of AI in Fintech?

‘I’m not fearful of AI replacing my job. I’m excited by the prospect of my job definitely changing, frequently and often. But my role is going to remain completely relevant. AI doesn’t negate the need for expertise; it amplifies it and allows us to focus on higher-order problems, to innovate and to drive the fintech industry forward in ways we can’t yet fully comprehend.’

Connect with Niklas on Linkedin