Artificial intelligence and blockchain will soon be two essential elements of business models. They will apply to almost every industry, but only if companies will be able to integrate technology within their strategy with the aim to support human intelligence. This was – in a nutshell – the main topic of the Strategy Innovation Forum at the Ca’ Foscari University in Venice. We attended the “AI and blockchain in FinTech” panel.
Why is Al industry’s real game changer?
Artificial intelligence was born in the 1990s, when it consisted of systems that could process simple logical inferences and connections. It then evolved into deep learning around the year 2000, when machines could learn and change their behaviour through experience. AI is now living its third wave, the one that will lead it to perform cognitive operations. However, in a landscape where machines have a predominant role (Digital-First), only an approach that acknowledges the centrality of the human being (Human-Centred) can extend productivity criteria and generate new categories of meaning. With a human-centred approach, AI can modify traditional industries in such a way that the benefits will involve all stakeholders. Experts estimate that AI will bring changes for a value of 15 trillion dollars globally by 2030 (Rao et al., 2017; Panetta, 2018).
As AI, blockchain is also growing exponentially. Known for being the skeleton of Bitcoin, blockchain has countless applications, as it ensures data traceability, anonymity, and incorruptibility. In a post-Covid world, blockchain can be used to increase the security and efficiency of supply chains – which were the first business victims of the pandemic.
According to a survey by the Word Economic Forum, by 2027, 10% of global GDP will be “stored” on blockchain platforms. In Italy, blockchain-based projects are valued 30 million euros: it’s a small number, but it redoubles every year (source: the Blockchain and Distributed Ledger Observatory by the Politecnico di Milano School of Management).
Business: it’s a question of strategy
Companies are starting to notice that, in order to effectively integrate these disruptive technologies into their business, they should not just get tools that offer the same security level while streamlining processes or making them more cost-efficient. They need to review their strategy from the very foundations. The first companies that will take this approach will have a huge competitive advantage.
Clearly, we are talking about something of crucial importance. Big techs know this very well, since not only have they invested in AI platforms in the last decade (Amazon’s Alexa, Apple’s Siri and Microsoft’s Cortana), but according to CB Insights, they have also acquired 635 AI start-ups between 2010 and 2019. And they have done so at an increasingly fast pace: +38% YoY since 2013, up to 166 deals in 2018.
The Italian case
On the AI front Italy is doing its part. The recent strategy for Artificial Intelligence gives Italian SMEs some guidelines to implement AI, and projects the country at the helm of the European program to transform the Continent into the world leader of data economy. It all comes down to creating a reliable ecosystem – which includes all the technologies that make AI work properly, from 5G to blockchain. This ecosystem should also be sustainable, i.e., it should not just improve SMEs processes but also help create a better society, reinforcing local well-being and the Italian cultural and artistic heritage.
In the meantime, actual progress has been made, since for the first time last June, Italy entered the top ten ranking of super computers (which are the commodity of AI) thanks to two machines: Eni’s “Hpc5” in Pavia and Mius Cineca inter-university consortium’s “Marconi 100”. And one of the world’s most advanced supercomputing centres is being built in Bologna, in the Technopole area. It will be called “Leonardo” and will have a power of 270 petaflops (i.e. 270 million billion mathematical operations per second – just consider that the best and second-best supercomputers globally are the Japanese “Fugaku” with 415 petaflops and Ibm’s “Summit” with 148 petaflops). Moreover, at the beginning of September Turin was chosen to host the headquarters of the Italian Institute for Artificial Intelligence (I3A) – the head centre of research and technology transfer regarding AI.
To us, the potential of these technologies is very clear, as highlighted by the investments we have carried out in AI-based start-ups in the last five years or more. We are thinking in particular of three companies, operating in three very different areas.
The first is BorsadelCredito.it, a P2P lending fintech service for SMEs. Founded in Milan in 2015, its greatest strength is a proprietary algorithm that can analyse the creditworthiness of companies in 24 hours and in a very reliable way, thanks to big data and machine learning.
The second case is that of Wonderflow, which analyses consumer feedback to find essential information for the improvement of products and services. Its technology can process over 150,000 texts per hour and can read over 10 different languages, including the Arabic and Asian ones.
Last but not least, Keyless, founded in January 2019 in London, is a cybersecurity company that enables the biometric recognition of employees (i.e. of banks) who will thus be able to access their accounts without any password, in a completely safe way, just using any camera-equipped device.
Three small, but big, steps into the future.