AI in fintech | Alex Jimenez | Engati CX
In this episode we discuss the digital fintech landscape, the use of AI and Automation in banking, and more with Alex Jimenez, the CSO of Extractable and one of the top 30 fintech influencers.
Video of Alex Jimenez's Interview
We have the pleasure of welcoming Alex Jimenez for this episode of Engati CX. I’m Aishwarya Sankhé from the Engati team. Let's begin with a quick introduction.
Engati is the world’s leading open multilingual, no-code chatbot platform. Available across 14 channels, with 25,000 bots, created across 186 countries in every domain & use case. We run the Engati blog, and the video channel which receives 200,000 visitors annually.
And now for our guest.
Alex Jimenez is the Chief Strategy Officer at Extractable, a strategic consulting, design, and data analytics agency that focuses on the future of financial services. Recognized by Onalytica as one of the top 30 influencers in fintech, Blockchain, and Innovation. His work has been cited by the Wall Street Journal, the Boston Globe, The Financial Brand, the American Banker and the Boston Business Journal. Welcome to the show Alex.
Thank you for having me.
So let's begin with an open question. Why digital tech and why financial services?
I don't know- I just fell into it. I have an engineering degree and after school, I went into insurance, which then led to me going to business school. And somehow I wound up in a bank, so I didn't specifically set out to be a banker. I was supposed to be an engineer.
And why Digital tech? Back in 2009/2010, when the rollout of the iPhone in the U. S. Happened, I was part of a department that managed online banking. And given the fact that I own online banking, I then own mobile banking. And so it just rolled from there again, just happened by chance. I was in the right place at the right time.
That's really interesting, actually. Do you believe Blockchain is here to stay and will fundamentally alter the digital fintech landscape?
Blockchain is here to stay, but Blockchain is not going to fundamentally alter digital fintech Landscape. we've been hearing that the Blockchain is going to change banking for now. 6-7 years, maybe 10 years. And many tests are happening and have happened. And the majority of the ones that have worked have been in payments because that is what Blockchain is good.
Uh, it's good for blocked payments for crypto. It's good for certain very specific things. But I've seen organizations watching technology where a simple database would have sufficed and they missed the point of blockchain altogether.
So I don't think the Blockchain is going to change banking, financial services or the digital fintech landscape. It will improve it in certain applications, but not not entirely.
That's really I kind of surprised to hear that because you were known as, um, a top influencer in Blockchain, So it's really interesting to hear your perspective on it.
Well, there's a few of us that keep saying Use blockchain for what is good for, don't just use Blockchain because it's a buzzword, because it's something that's new or different. If you can solve your problem with the database for the centralized permission database you do not need Blockchain. Uh, it is best when it's decentralized when it's open. And there are not many applications from a central organizational stamp point that a bank or central bank or a new insurance company would have. You know, they are all about controlling data and controlling information and controlling funds and controlling risk management. You can't do that in a decentralized model.
So on the topic of databases, what's your view on it? B2B cloud based platforms as it applies to banking or finance services?
Well, up until a couple of years ago, Cloud was a forbidden term in banking or financial services. People were concerned about security. Ah, the legacy thinking was “If I don't have the data in my shop, in my tech, in my hardware sitting right here in my office or sitting right here in my facility, I do not control it and therefore it's dangerous. I don't want to give out the control.” That's change a bit. However, we've had a couple of instances not long ago. Capital one being the biggest one, where a cloud system was gamed. unfortunately, or fortunately was done by an insider, and not someone from the outside. but that proved to some people that that is still a dangerous model.
And so they're still the friction from the industry to keep everything within house everything, keep everything on Prem, and therefore cloud in any form is not Ah, not favored. Ah, there are However, more people, particularly as we import more people from other industries into financial services, that have had experience with cloud that that thinking started to change. And so we do see more and more organizations defining a cloud, uh, strategy and going forward with some non-essential data being hosted off-prem, being in the cloud. And so it's changing very slowly, much slowly, but much more, much more slower than in other industries.
How well do you think the banking industry is responding to the developments in AI and automation?
AI is another. Another area where we're very much beginning.The adoption of algorithms and fairly basic AI is mostly in places like fraud prevention and underwriting. We don't see it a lot in customer service. We don't see it a lot in providing better services for clients. Uh, marketing, uh, areas within financial services have started to talk about it, but they don't understand it yet. They haven't really rolled it out much. And the proof is for anyone that has a banking account in the US, you do not get personalized information on almost any level.
I'm still blown away by capital one sending me a happy birthday email every year. They've done this for, like, over 10 years, and they're the only financial services company that Does that. I mean- This is not, You know, this is not complicated, but even to that level of personalization it’s not happening. Ah, so we're far away from what people believe we're capable of, even with the technology we have today. So we're really early on.
So, besides marketing, what else could we be doing better to improve AI? So that it becomes more accessible to banking and financial services?
Right. Well, for one thing, we can improve what we're doing in fraud. We can improve what we do in grace. We can even improve what we’ll be doing on the writing. Uh, but certainly being able to support our clients better with, ah, with offerings that are specific to their needs, specific to what they're doing, specific to their lives. Uh, we certainly can do that. And it's not just from a marketing standpoint, but being able to replicate what we used to have long, long ago when people had relationships with a bank with a local banker.
So back, back when I was a little a little kid back in the seventies, my dad used to take me to the branch and he would talk to his friend, who was his banker. Uh, and they, by the way, they're still friends. They're both in their eighties, they’re retired to live in Florida, and they're still friends, right? Uh, that person knew my dad. That person knew our family. That person understood our needs because he was at that level.
You know, nowadays, it's difficult to do that and certainly there are examples of people still doing that. But we can replicate that with data we can replicate. Replicate that with AI, and other tools, and we just are not there yet. And we should be, uh, because the capabilities there.
So do you believe the interaction model is shifting away to be more conversational intelligence based in the future?
It should. I tell you, have a five year old daughter who, uh, when she was four she loved Alexa. But we had a problem because she started wanting to have a conversation with Alexa and Alexa, couldn't? You know, it could answer a couple of questions, but it couldn't hold a conversation. And we actually had to be shut off Alexa, because she was getting so upset that Alexis wouldn't talk to her. Right. And you know, I tell you this because I think that there's a lot of that going on with all of us, you know.
To be able to ask Siri or Alexa or some bot a question a Simple question is one thing. But to be able to have a conversation and to have an interaction that really, uh, is meaningful, you do need that conversational capability.
Ah, and I think one of the things that we need to get more people involved in digital and for getting more people adopting digital as a model for service is to be able to provide a conversational interface on whether that is through, uh, through a text bot or through a voice bot. I think that is key to the user interface that will make sense for people. And I believe that we will get to the point where we're really just talking to our machines. And we're not no longer trying to learn what are the arcane codes or keys or skills that we need to be able to converse with or get anything out about technologies.
So you know we'll be talking to refrigerators, we'll be talking to our microwaves, we'll be talking to your cars. Uh, and so we will be talking to our bank in some form, That is not that is not, you know, a person. And certainly where people could come into the discussion is when it gets a little more complicated than what a bot can’t support. Right? But you know when you have when the majority of phone calls that a bank gets on their call center is for a balance. Ah, you know, those sort of things could easily be done by AI, uh never mind. It doesn't even have to be AI to be truthful, right?
Uh, it has to be a good interface in front of a fairly simple model. But you know, the real basic questions can be handled by AI and everything else to be headed by a person. and which should be We should be there. We should be going to that. But I talked to a lot of organizations and conversational interfaces are on their radar. But are not in their immediate radar. And they should be. I'm sure you guys would agree with that.
Definitely, definitely. So Do you think there's still a place for branches like physical bank branches in the digital world?
Um, I'm one of those people that years ago you would have told me that in 2020 we still have many branches as we do, that I wouldve said Absolutely not. You know, 10 years ago I was saying, No way they'll be gone in five years. Uh, obviously I was wrong. Ah, but now I believe that at some point they will be, uh, you know, they will be similar to landlines, to phone lines, that there will be some out there, but the vast majority of people are not going to be using them.
And we're getting to that point in some parts of the world where people just don't go to a branch in the U. S. we still do a lot of that part. Part of it is because banks have done a terrible job or providing good digital experiences. And so when it's insanely hard to get a small business loan yeah, through a digital channel, You just, you know, throw up your hands and go into a branch. Uh, and so the legacy bankers will say, Well, here's the Here's the reason why we need a branch because people are coming or branch. Well, yes. You know, you're even them terrible digital experiences. Of course. Of course. They’re coming to a branch. Uh, so there's that part of it.
They're still a desire for people to interact with people. Uh, anything coming out of the current crisis is one of the things we're going to see is a bigger adoption of video, as we're doing right now. We're just gonna be more and more people who are going to adopt that, and that is going to drive some of the traffic away from branches as well. But people still are gonna want to do that and It's not just the older people.
You actually see some millennials and Gen Z’s still going to Branch and actually opening accounts at a branch. And the reason for that is they don't feel comfortable with their ability and their knowledge of financial surfaces to actually do it on their own, even if there is a simple digital experience. So they still go to a branch so that there's going to be a time for that to continue. But as we improve our digital experiences, and as we do more ah, more applications of the same thinking, and improve for our customer experiences, and we start using voice interfaces and AI and so on.
There'll be a time when people are just not going to even think of a branch. That's just not going to be something that is gonna be there. So it's that five years from now, probably not starting 10 years from now, maybe, Ah, but certainly the trajectory in the U. S. And in Europe there have been just fewer and fewer branches. And I expect that you know, some point Well, oh, finally, they’re all gone. I'll be retired by then.
Is there any advice you would give someone who wants to pursue a career in digital technologies applied in Fintech?
Well, um, it certainly you know, the Fintech companies are hiring developers. That's the Number one need Ah. However, I see that that will only take you to a certain place. Fintech companies not only need developers, but they also need people who are designers, who are designing those digital experiences that are better than what's out there. Uh, but there are some. There is some need for people that are outside of technology to help people digitize their thinking and digitize operations and digitize how things are done in a way that's humanly positive.
SO. You know, just today I was reading about digital anthropologists. It's a new field, right? So obviously yeah that makes sense, you know? So for those of us that work or have worked at financial services, companies that have long, histories, you know, companies have been around for 100-150 years, some in Europe, you know, being around for 200-300 years. Ah, there is a culture there that is not necessarily, uh, open to Fintech. And those organizations are going to need people who are training in the humanities, people who are trained in psychology, people who are trained in other modalities to help the organization change its culture and to be able to be, ah, open to digital experiences.
So certainly if you have the aptitude for being a programmer and you know that's the easiest, fastest way to get into fintech. But there are other things, right? There are other, uh, uh, disciplines that can take you into fintech. it’s a little harder, and it's gonna take some time, etc. The other need outside of just being, ah, pure developer is infra security, cyberSecurity. Uh, that's more and more important Every day. the bad guys always seem to always be ahead. One step ahead, and so it's a growing need and, you know, organizations are having a very difficult time. Finding resources there is oh, that's another big area where people can focus on. If you want to get into Fintech.
Are there other sound bytes you'd like to share with our viewers?
Given where we are today. And I believe that Ah, the rosy picture of those people that say we're going to see more or more people adapt in digital, like, right away A short term. You know, I don't think that that is necessarily gonna be happening. I think that we were going to see people wanting to go back to the social sphere. And you're gonna see people who are gonna be wanting to be out there more.
Ah, so they might even be a little bump and more people visiting banks, visiting branches just cause to be like “Hey, I could do it I think aloud and let's go out and go to a branch.” Ah, and yeah, I think that the things that are going to see a bump and increase in interest, particularly from a customer side. Not necessarily the organizations are those things that help humanize the digital experiences and those things that help connect people.
So I mentioned video banking is probably something that you're going to see more. I think the augmented banker. Meaning a banker that it’s a tool with digital tools. Ah, that is held by AI that's held by, technology is going to be something that is gonna be the future, particularly in the midterm. Ah, so that's those other things that I think are going to get a bump in the interest from clients as supposed to mobile, mobile banking, you know? Yeah, we're going to get a couple more people using mobile banking, but I don't think this is gonna be the one thing that gets everybody to adopt it.
So that was my final question. Thank you so much for talking to us. You've really opened my eyes to Fintech and Financial service is and banking And how the future is gonna look in terms of banking and financial services. so thank you so much for that.
Thank you for having me.
Podcast of Alex Jimenez’s interview on Fintech
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