Banking for the 'snapchat generation' is about to get a lot smarter
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When Business Insider asked experts what they thought would change the financial industry in the next decade, nearly all said automation. But while some saw humans being replaced, others thought the tech will make humans better.
We surveyed chief technology officers, chief innovation officers, startup founders, and venture capitalists. This is what we learned:
We are heading towards a world where "ubiquitous mobile computing, an exponential growth in data, and continuous advances in machine learning and artificial intelligence will transform finance into an always-on, algorithmically driven industry," according to Sean Park, the founder, chairman and CIO at venture capital firm Anthemis Group.
Adding to this trend, he said, is the coming of age of the "snapchat generation," the millennials (and the generation ahead which some call "Generation Z") that have grown up using technology in an automated world.
It's clear that industry experts, from startup founders to senior executives at incumbent giants, agree. Here's a sampling of their thoughts:
David Reilly, CTO at Bank of America, believes that automation will "change how we insure property, loan money, invest money, deliver technology, write research reports, and what professionals in financial services do every day. " For example, an insurance company can incorporate far more data - from credit scores to behavior - when it decides how risky a customer is.
- He added: "Every week in the news we read about a new application for artificial intelligence, machine learning, neural networks, or robots - whether it is self-driving cars, AI assistants, predictive models, robots building (or printing) hardware, or how to invest our money...Put these all in the category of automation - and that is what will impact finance the most in the next decade."
- CEO of online lender MoneyLion predicts that "what was once a sit-down conversation between a client and their personal private banker might now be accessible through a mobile app to broad audiences, 24/7."
- Managing director at Techstars Accelerator Jenny Fielding said that currently technology "enables basic automation so that making payments, checking balances and customer service can happen in real time via messaging platforms. However, as the underlying technologies mature, deep learning algorithms will minimize the need for human interaction."
- PwC's coleader of US fintech Dean Nicolacakis, believes that automation will allow financial services to become "embedded directly into the user activity itself as a native, not a separate, function." Think services like Uber, where paying is simple within the app. He imagines that kind of seamlessness will come to other transactions like getting a mortgage.
- Chae H. An, vice president and CTO of the financial services sector at IBM sees the growth in artificial intelligence allowing banks to provide services tailored specifically to individual customers.
Cofounder and CEO of online investment manager FutureAdvisor, Bu Lo, said that "technology will also continue freeing up human financial advisors from mundane tasks so that they can focus on providing uniquely human value, like coaching and mentoring." Instead of having to deal with administrative procedures, advisors can spend time offering a personalized service according to client needs.
The days of traveling to your bank, waiting on line, and sitting down with a financial advisor to discuss your financial future are already a thing of the past for many. But experts think for most of us, the bank of the future will be entirely virtual.
"The impact on businesses will be profound," said Fielding.