Business, Finance & EconomicsWorld

The Bank Versus Modern Tech

Which will survive in the long run?

I am very sure finance industry players have always been pondering over How and What will the world of financial services look like in the next 10 or 20 years? Today, the financial world is at the point of enormous change that renders the future both exciting and shaky. Blockchain, artificial intelligence (AI), machine learning and robotic process automation (RPA) hold all sorts of promises for solving the banking problems of today.

When these technologies are fully realized, what will banking look like? Amazing! Isn’t it? I wonder what will come of staff and branch offices of not only the financial services but sectors. Can you envision branches and operation centers staffed by sophisticated robots instead of human tellers? Recently,Munich airport in Germany introduced and replaced humans with a humanoid robot to serve all customers who travel through the airport. Since their introduction,their services have been wonderful.

This makes it a challenge not only to the financial industry players but all other industries. I recently thought of this. If everyone from high net worth investors to high school teachers take financial advice from artificially intelligent apps and then investing across asset classes, currencies and geographies on a real-time basis,what will happen? What about if an asset manager of a bank, or any other company were as simple as plugging in an appliance? Gradually,innovations are advancing at a crawl on a daily basis. The future of banks is likely to be low cost. The biggest changes will clearly occur in consumer banking, in the next 30 years.

I am wondering whether  they’ll even be called a bank anymore because future banks will have no back offices. They will look more like technology companies favoring social equality. But the human factor won’t totally disappear—it will still be important in the world of corporate and investment banking, which is relatively riskier.

Digital Bank Options
Digital Bank Options


A traditional Bank
A traditional Bank


In the corporate world, smart contracts, together with the Internet of things, speeding up supply chain transactions and being able to track goods embedded with chips in transit, are all interesting use cases for blockchain. To buttress my point,Kevin Johnson, head of innovation programs at Innotribe, a SWIFT initiative to foster bank-fintech collaboration, has noted that fintech and regulatory technology (regtech) companies will need to move out of the lab, scale up and prove themselves. It shouldn’t just be innovation. We should note that,solving customer problems is at the core of every business.

Banks are starting to invest in technologies that have a more immediate payback and impact on their business. PwC’s Global FinTech Report 2017 says that 30% of large financial institutions identified AI as the most relevant emerging technology for investment in the coming years, compared to just 19% for blockchain. AI is moving at a much faster pace than blockchain. The applications of AI are enormous in solving real problems banks are facing. This application could be used to detect fraudulent transactions or to market cross-channel to ensure banks are are able to analyze nontraditional data to lend to businesses that banks do not normally lend to; the list is endless.One of the biggest problems banks currently face is software systems that produce a high number of false positives. Probably,employing robots can get rid of false positives. AI is becoming smarter and more humanlike. The question is-don’t they make mistakes? One thing that is likely to hold back AI’s progress in the coming years is banks’ existing data architectures. Banks will need to transition good structures into the private Cloud to support data going into AI. In the past, it was difficult,time-consuming and costly. Now, the larger banks are creating what they call “data lakes,” which pulls together all the data (e.g., customer interactions, emails, photos, account balances and transactions) and run queries across it. Beautiful! According to my investigation as a business writer,Austrian central bank is exploring whether it can get all banks to expose APIs in real time.

Data scientists, not bankers, will be in high demand; and countries like India and the Philippines, which are the back offices of the world, will have to reinvent themselves.

Predicting the future is a fool’s game, but a fun one. Let us know what’s your take on this in the comment section.

Sources:  Research: link;   Images: link, link

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