FRISCO, Texas–The number of fintechs will surpass the number of credit unions within the next few years, according to one person, who advised CUs to recognize the $86 billion invested in fintechs during 2018 deserves attention.
Of course, many of those fintechs will either eventually consolidate or go out of business, but there remains numerous lessons for those CUs from the new players in financial services, according to Kirk Drake, founder of Ongoing Operations.
Chief among those lessons, said Drake in remarks given to Catalyst Corporate’s Economics and Payments Forum, is those companies’ investment in and use of artificial intelligence (AI).
Drake used several charts to show how for most of human existence there has been a fairly steady pace of change, but change itself is about to change with a sharp spike in its pace as AI increasingly penetrates society.
‘Hard to Catch Up’
“If you’re not in the early stage, it’s really hard to catch up,” said Drake, pointing to the “s-curve wave” of change that used to take place perhaps once per decade but that is now occurring every few years.
Drake said the world is approaching a state of “Super AGI” (artificial general intelligence). “This is where all the computer together are smarter than all of us on the planet, and the scary part of it is, it will probably happen in your lifetime,” he forecast.
Among the other predictions: By 2024, AI will be better at translating languages and will be 100% ubiquitous. By 2027, self-driving trucks will be on the road. By 2031, most retail workers will no longer be needed. By 2053, AI and robots will be working as surgeons. By 2063, AI will be outperforming humans.
“We are working with numerous fintechs that are using or experimenting with AI,” said Drake. “But no credit unions really are, and that’s a really scary proposition. The fintechs are missing the data credit unions have, but they have been able to turn to other tools and resources to compensate for that.”
The fintechs, said Drake, began by working in the cloud with providers such as Amazon or Azure.
Failing Fast
Drake said he is a huge believer in failing forward fast. And he urged his audience to allocate some budget and “try things that are interesting.”
“Credit unions don’t have data in the way Amazon or Google does,” he told the meeting. “Your one data warehouse might give you a 10% or 15% lift in what you’re doing. But you can really soar when collaborating with multiple other credit unions.”