ETtech Morning Dispatch: Monday Insights
Happy Monday! Today, we delve into the rising employee-linked fraud in the banking sector, the booming AI companion market, and the resilience of India’s IT industry. Here’s what you need to know:
Fraud Prevention Takes Center Stage in Banking
Banks intensify employee screening
In light of increasing fraudulent transfers and mule accounts, banks are ramping up their internal systems to prevent employee involvement in fraudulent networks.
Driving the news: According to a report by AuthBridge, there has been a 10.4% rise in discrepancies between employee-submitted data and that from background verification firms. This trend is attributed to a fierce job market and easy access to financial services.
Keeping pace with technology: In response, banks are collaborating with fintech startups to leverage advanced technologies aimed at identifying fraud early. The Reserve Bank Innovation Hub (RBIH) has developed an AI-powered mule hunter model to assist banks in detecting mule accounts.
AI Companions Reshape Human Connections
Rise of relationship apps
The emergence of AI companions—ranging from virtual girlfriends to holographic friends—is transforming the landscape of personal relationships, driven by a growing demand for customizable, judgment-free connections.
What’s happening: A plethora of romantic chatbot applications, including Replika, Character AI, and India’s Urvashi, is seeing remarkable success, collectively amassing over 100 million downloads on Google Play. Replika alone achieved 10 million downloads and generated $90 million globally within the first eight months of 2024.
Market potential: According to Ark Investment, the AI relationship sector could reach an astounding $150 billion annually by 2030, fueled by the popularity of these platforms.
Using AI platforms: These applications allow users to create personalized companions, with functionalities that span casual conversations to romantic engagements. Character AI, benefiting from its 25 million active user base, recently attracted attention through a $2.7 billion acquisition by Google.
Advice from experts: Relationship mentors caution users of potential downsides. Excessive reliance on AI companions may lead to unrealistic expectations in real-life interactions. Former Google CEO Eric Schmidt warns that such relationships might intensify feelings of loneliness among users, due to an obsession with “perfect” partners.
IT Industry’s Steadfast Performance Amid Stock Market Fluctuations
Resilience of India’s IT sector
Despite recent stock market fluctuations, India’s $254 billion software services industry demonstrates notable resilience, with analysts suggesting the current dip is temporary.
Market dynamics: On November 28, the IT index experienced a significant downturn, dropping over 2% on both BSE and NSE, driven by concerns regarding high US inflation and its effects on corporate strategies.
Positive outlook: Analysts project a recovery might commence in Q4 of this fiscal year, driven by sustained deal momentum in the early half of FY 2024-25, alongside expected reductions in US interest rates and the increasing pipeline of generative AI projects.
Future expectations: Analysts from Kotak Securities and Bernstein envision a robust growth cycle starting in FY26, citing strong order books and the expansion of AI-related contracts as key catalysts for future growth.
Other Top Stories
UPI Dominates Digital Payments: India’s UPI has exceeded 10 billion merchant transactions as of October, registering an impressive 53% year-on-year growth during the festive season, surpassing cards and mobile wallets as the preferred digital payment mode.
ChatGPT Bug Surprise: Users have reported a strange bug with ChatGPT, where the model is unable to generate a response for the name “David Mayer.”
Concerns Over Regulation: Social media companies express apprehension regarding potential overregulation by Sebi in their recent submissions to the market regulator’s draft proposal.
Global Picks We Are Reading
■ Can Europe build its first trillion-dollar startup? (FT)
■ The Beginning of the End of Big Tech (Wired)
■ Breaking down the world’s tariffs against China’s tech industry (Rest of World)
