From AI-powered financial advisors to “self-driving money,” banking braces for the digital future

Transform is an online magazine and platform for conversations about how digital technology influences our world.

Published regularly throughout the year, it looks at how tech is re-shaping the present and gives readers a glimpse of the future.

Transform’s latest edition is about #DigitalFinance.

In this issue:

Here’s what banks will look like in 2050

Digital technology could usher in a golden age of digital banking, with artificial intelligence giving consumers financial advice and other customized guidance.

So says futurist, author, and banking expert Brett King.

“The early wallet systems we see today, like Alipay and WeChat Pay in China, Paytia in India, and Kakao in South Korea, will evolve into AI-based bank accounts that help us with our day-to-day money management,” King says. “I think this is probably the most positive development in banking we've seen in the last couple of hundred years.”

In an interview with Gavin Allen, Executive Editor-in-Chief at Huawei Technologies, King predicts that fairly soon, banks around the world will be augmenting human advice with AI. “We will rely more and more heavily on artificial intelligence to give us the best advice.”

He also predicts that smart glasses will become an integral part of people’s financial lives. “You're not going to have programs or apps like we have today,” King says. “You won't have a mobile banking app that pops up on your screen.” Instead, the smart glasses will look at your situation, interpret your need, and provide you with a solution – whether that's access to credit, helping you understand the impact of a spending decision, or some other financial issue.

Read the entire interview here.

Here’s what old-line banks get right about digitalization

Traditional banks have been right to tread cautiously, even if technology is moving full speed ahead.

That’s the perspective of Dame Jayne-Anne Gadhia, founder of the Snoop money management app and former CEO of Virgin Money, part of the Virgin Group. 

Dame Jayne-Anne denies that banks have been slow to embrace full digitalization. “It's not as simple as waving a magic wand. It’s complex, expensive, and risky. It’s a big project that people will have to plan for over many years.”

She observes that, in many areas, not just banking, upgrading legacy systems from COBOL programming and AS/400 hardware is extremely difficult. This has caused some of the more established banks to think hard about their digital strategy.

“Some have decided that the best way forward is to digitize their front end so that customers can interact digitally with their bank, while the established back end is still there and running,” she says. “Others—the new tech banks like Monzo and Starling—have built a completely new digital stack, which means that both the front and the back end are supporting the customers through new technology.”

You can read the full interview here.

Banks will leverage tech to create cool new products – but they’ll have to move quickly

David Brear, CEO of the financial services consultancy 11: FS, says technology will open up new levels of service for old-line banks.

“Machine learning, algorithmic banking, and AI, along with the opening up of data platforms to gain access to information,” will help consumers make better decisions.

Brear also talks about what he calls “self-driving money.”

“That’s where my bank is there to make me better off. It will move my money around to make sure that I'm always getting the best products at the best rates. I’m always being looked after,” Brear says.  

Brear has compared legacy banks and startups to the race between the tortoise and the hare. 

The race still has a long way to go, he says, noting that legacy banks have still got hundreds of millions of customers around the world, even though the fintech hares may be running faster at the moment.

He sees the modernization of banking as a Darwinian battle. “It's not the strongest of the species that survive,” he says, “but the ones most adaptable to change.”

Read Transform’s complete interview with David here.

More than 50 million Bangladeshis manage their financial lives with this app

Bangladesh is one of the world’s most densely populated countries. More than 70 percent of citizens live in rural areas, where mainstream banks don’t provide services.

In a country with 169 million people, nearly 85 million don’t have bank accounts.

The country’s unbanked population is, for the most part, unable to obtain credit, make digital payments or deposits, or start a savings account. 

One solution is offered by bKash, a simple, affordable mobile payment service. More than a decade after its launch, bKash has accumulated more than 50 million registered users.

bKash has become a trusted brand in Bangladesh. Its bright pink signs are eye-catching and easily identifiable. The company's advertising billboards also often occupy prominent locations in towns and cities and promote the value of the service through customer stories. In Bangladesh, everyone knows bKash, whether or not they’ve used its service.

To find out more, read the article and watch the video here.

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