We are always searching for what's exciting about Fintech, what's at the edge of the wave. It's encouraging to see, for example, JP Morgan launching its digital bank Finn out of St. Louis into the world, Goldman's Marcus lending to lots of subprime risks, and Venmo (i.e., PayPal) putting out a debit card to fight over the neobank consumer. But it's also sort of obvious. This is the innovation of 5 years ago, deployed at scale. Of course large finance firms have no choice but to innovate and copy startups, of course startups will diversify products from payments and banking to investments and insurance. We know the direction of travel, there is only one way to go.
The edge in consumer banking, apart from crypto, is figuring out the role of the human in the context of artificial intelligence. About four years ago, we started seeing chatbot companies like Finn.ai and Kasisto building out natural language interfaces into financial data, and virtual agent companies like Digit and Trim perform account actions like savings and planning. Now, robots are spilling out into the physical world to do the emotional labor of human employees. Take a look at HSBC, parking Softbank's Pepper robots into its physical branches. And while yes, this is a gimmick like Saudi Arabia giving citizenship to the Sophia robot, it is another step towards embodied digital agents.
The robot is currently used only for generic queries, like a chat window on a website but in a physical location. Its cartoonish form moves it out of the uncanny valley, to which both Sophia and something like Soul Machines still succumb. It is not integrated into a user's account or actual financial situation, but we can see a future where such automated interfaces are a bridge to bring in new customers -- both those that are not tech savvy and require the emotional labor, and those that want to geek out over a new user interface. And if you want to understand how something like this could become a window to your financial soul, just check out BBVA's new payment system. A camera placed at the checkout counter reads your face, identifies it using machine learning, and charges your account. All it takes is one camera, and one robot.