Financial industry set for great transformation with fintech and AI advancements: Panel

Advancements in fintech and artificial intelligence (AI) will drive greater transformations in the financial industry in 2026, according to some investment firm representatives on a panel at the Singapore Fintech Festival (SFF) on Nov 12, but they also cautioned about the risk of an AI bubble bursting soon.

- Benjamin Lim Correspondent

Further developments in AI could also solve some problems while creating new ones, including talent and energy shortages, some of the panellists said at the event at Singapore Expo.

The financial industry could find itself at a critical juncture in 2026, as fintech advancements are poised to deliver disruptions.

Mr Sandeep Naik, advisory director at New York-based private equity firm General Atlantic, said fintech built the digital infrastructure and digital payment rails for the world over the last decade, without any form of large-scale disruption to the industry.

But he foresees that programmable finance - the embedding of blockchain and smart contracts into digital money and payment systems — could cause major disruption within the next 12 months.

Other disruptions could see computing costs go down, while regulation will be more proactive and innovative to become a core component of the fintech industry, he said.

Mr Saemin Ahn, managing partner at Japanese venture capital firm Rakuten Capital, noted that while the surge in AI investments has advanced the infrastructure for the financial sector of the future, it has also led to a significant drop in innovation in other critical sectors.

“So much investment has focused on AI-first initiatives, which means that we are not putting enough capital towards human talent in other industries, for example pilots, nurses, and heating, ventilation and air-conditioning engineers,” he said.

He predicts that capital flows will eventually still return to industries that are less reliant on Al.