In the mid-90s, Bill Gates said that ‘banking is necessary, banks are not.’ This sentiment has deepened among the population over the last decade, with public opinion turning against banks after the financial crisis of 2008 and technology opening up a range of new options for financial management. This has enabled startups to enter the sector at an unprecedented rate, causing a high level of disruption. Apple, Stripe, and Square are just a few of the companies revolutionizing how we pay for things, while digital currencies and peer-to-peer lenders are opening up new funding avenues for startups and SMEs. In a recent PricewaterhouseCoopers survey of more than 1,300 financial industry executives, 88% said they feared their business was at risk to standalone financial technology companies in areas such as payments, money transfers, and personal finance, and 51% said they believe they could lose as much as 40% of their revenue to standalone FinTech firms.
Did you know that artificial intelligence and machine learning could detect that it wasn’t really you who just swiped your card? That’s right, systems are being developed to flag transactions that seem fraudulent, so that banks can call up consumers and take control before the damage worsens. With everything from your refrigerator to your car going smart, banking and financial services cannot afford to lag. Before this decade ends, AI and big datawill be making radical changes to the way banks serve their customers.
From creating better customer experiences and providing personalized financial advice, to automating process and administrative work as well as lower their own internal costs, banks can benefit greatly by leveraging AI and big data. Here are some of the most interesting ways AI and Big data will transform banking in 2019.
By Daniel Gutierrez : Original article
Artificial intelligence promises to change customer relationships with banks. As more customers bring devices such as Amazon’s Alexa and Google Home into their residences, forward-looking banks can offer automated services to help users perform tasks such as requesting an address change or submitting an application for a credit card or personal loan.
In a recent report on the projected impact of AI on the banking and finance industry, the World Economic Forum warns that small and midsize banks struggle to find their footing in this rapidly changing environment.
It is not enough to just import technologies like AI, blockchain or smartphones into existing financial services, says futurist and fintech entrepreneur Brett King. To stay in business, banks need to rethink the role their business plays in their customers’ lives. King paints a vivid picture of how Jack Ma, robo advice and quantum computing will shape the Bank 4.0.
1. Supply chain management.
For supply chain management, the blockchain technology offers the benefits of traceability and cost-effectiveness. Put simply, a blockchain can be used to track the movement of goods, their origin, quantity and so forth. This brings about a new level of transparency to B2B ecosystems — simplifying processes such as ownership transfer, production process assurance and payments.
2. Quality assurance.
If an irregularity is detected somewhere along the supply chain, a blockchain system can lead you all the way to its point of origin. This makes it easier for businesses to carry out investigations and execute the necessary actions.
A use-case for this is in the food sector, where tracking the origination, batch information and other important details is crucial for quality assurance and safety.
Recording transactions through blockchain virtually eliminates human error and protects the data from possible tampering. Keep in mind that records are verified every single time they are passed on from one blockchain node to the next. In addition to the guaranteed accuracy of your records, such a process will also leave a highly traceable audit trail.
Of course, the entire accounting process also becomes more efficient on a foundational level. Rather than maintaining separate records, businesses can only keep a single, joint register. The integrity of a company’s financial information is also guaranteed.
4. Smart contracts.
Time-consuming contractual transactions can bottleneck the growth of a business, especially for enterprises that process a torrent of communications on a consistent basis. With smart contracts, agreements can be automatically validated, signed and enforced through a blockchain construct. This eliminates the need for mediators and therefore saves the company time and money.
Today, blockchain solutions like CREDITS offer autonomous smart contracts paired with its own internal cryptocurrency. By consolidating everything into a single platform, businesses can integrate services without disclosing an excessive amount of proprietary information to third parties.
Just like in supply chain management, the promise of blockchains in the aspect of voting all boils down to trust. Currently, opportunities that pertain to government elections are being pursued. One example is the initiative of the government of Moscow to test the effectiveness of blockchains in local elections. Doing so will significantly diminish the likelihood of electoral fraud, which is a huge issue despite the prevalence of electronic voting systems.
Another example is when NASDAQ leveraged blockchain technology to facilitate shareholder voting. It worked with the joint efforts of their blockchain technology partner and local digital identification solutions, which provided governments with identity cards. After seeing success, they described the “e-voting” project as a practical, necessary and disruptive.
6. Stock exchange.
The notion of using blockchain technology for securities and commodities trading has been around for a while. Given the open-yet-reliable nature of blockchain systems, it isn’t surprising to hear that stock exchanges now consider it as the next big leap forward.
In fact, Australia’s stock exchange is already dead set on switching to a blockchain-powered system for their operations, which is designed by the blockchain startup Digital Asset Holdings. In a press release published in December 2017, Blythe Masters, CEO of Digital Asset, said, “after so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential.”
7. Energy supply.
There are two types of businesses — those that shrug off monthly utility bills and those who scratch their heads, wondering where their energy expenditures are coming from.
In certain parts of the globe, commercial establishments and households can now take advantage of blockchain-enabled “transactive grids” for sustainable energy solutions that accurately track usage. A couple of examples would be Powerpeers in Netherlands and Exergy in Brooklyn. Blockchain can also be used to improve the tracking of clean energy. After all, once power is sent to the grid, no one can really discern if it’s generated by fossil fuels, solar energy or wind.
Traditionally, renewable energy is tracked through tradable certificates that are issued by the government. These certificates are, to put it bluntly, terrible in serving their purpose — something that blockchain would have no trouble handling.
8. Peer-to-peer global transactions.
Finally, the meteoric rise of Bitcoin and every other cryptocurrency in the market isn’t without merit. For one, it enabled the fast, secure and cheap transfer of funds across the globe.
While there’s already a slew of services like PayPal that process international payments, they usually require sizable fees per transaction. Other P2P payment services also have specific limitations, such as location restrictions and minimum transfer amounts. That’s why more businesses, as well as regular users, are beginning to prefer cryptocurrency for international transfers. Not only are they generally more secure, users are also granted more freedom when it comes to the movement of their funds. It’s clear that the blockchain is making strides into different industries outside of cryptocurrency. One could argue that most people aren’t ready yet for decentralized digital ledgers, but looking at blockchain’s progress thus far, it probably won’t be long before non-adopters follow suit.
Is Blockchain Technology the New Internet?
The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community has now found other potential uses for the technology.
In this guide, we are going to explain to you what the blockchain technology is, and what its properties are that make it so unique. So, we hope you enjoy this, What Is Blockchain Guide. And if you already know what blockchain is and want to become a blockchain developer please check out our in-depth blockchain tutorial and create your very first blockchain.