Quantum computing uses superposition and entanglement to create states with an exponential scale to store and use relevant information. Instead of manipulating individual bits like a standard computer, the quantum process relies on quantum bits, or “qubits,” to process data.
Additional technologies, such as artificial intelligence and blockchain, are introducing new ways to work with data in the banking sector as well.
Each new technology offers the potential to transform how customers interact with their preferred institutions. They can help innovators disrupt traditional processes, encourage more customization, and make it easier for wealth to grow.
Quantum Computing Can Streamline Data
Quantum computers operate in frigid environments, with temperatures close to absolute zero. It is the only way for the equipment to work with the superconducting qubits over an extended time.
The power of this technology is that it can process so much more data than the traditional computer. We have already seen how analytics can transform business when it embraces the idea of a digital transformation.
Quantum computing, when integrated into the banking sector, can increase the speed of transactions, improve investment opportunities, and detect anomalies in spending habits.
Artificial Intelligence Provides Automation
Up to 80% of the online customer service processes that exist in the banking sector are already powered by some form of artificial intelligence. Innovations in this sector help institutions reduce expenses on their front-line services because chatbots and similar services can replicate the concept of human interaction.
The impact of AI does mean a reduction of job opportunities in the banking sector for customer service, but it creates more openings in coding, programming, and software development.
AI can even learn the personal preferences of individual customers to create customized user experiences. It can anticipate the need for a loan, check credit scores for a mortgage, or encourage more portfolio diversity with a quick review of the consumer’s data that they generate with each interaction.
Blockchain Reduces Costs and Improves Speed
The reason consumers are flocking to blockchain technology is because of the numerous benefits it can offer. There are lower fees involved with transactions, better speed in asset transfers, and better global accessibility. Because you are creating what is essentially a peer-to-peer transaction, ideas like cryptocurrency become a borderless solution that still offers a higher level of transparency for the banking sector.
According to Jean Chalopin an entrepreneur, “Distributed ledgers can reduce operational costs for banks as well, creating the potential for real-time transactions between institutions.” There could be fewer gatekeepers in the credit segment of the industry as well, reducing the barriers and risks to borrowing so that interest rates can stabilize.
What This Means for the Future
The impacts of quantum computing, artificial intelligence, and blockchain on the banking sector could be positive, but they will also be disruptive. The institutions who are willing to embrace these changes proactively are the ones that will most likely see success in the future.
With a value of over $134 trillion, the global banking industry is one of the most integral components of our economy. Even if these technologies only improve revenues by 1%, that is a $1.34 trillion benefit to the world. That is why we must embrace these options.
Artificial intelligence (AI) and deep learning have moved from the fringes of the FinTech sector to the center of the debate surrounding its future. This industry works with massive datasets, enormous staffing resources, and plenty of capital.
With a focus on deep learning, there are several critical benefits that this technology can provide at the local level. These approaches will help to evolve today’s approaches to tomorrow’s successes.
5 Benefits of Deep Learning and AI
The FinTech sector is one of the few that already has the resources in place to employ critical developers, build killer apps, and create machine learning opportunities. That is why it stands to benefit the most from this development in the following ways.
1. It will redefine customer service.
Deep learning and AI use interfaces to interact with customers and answer questions. This process reduces staffing costs in the front, middle, and back of the office because it can apply to a firm’s data processing or underwriting needs as well. When consumers can receive natural responses through options like Natural Language Processing, it becomes faster, easier, and cheaper to take care of individual needs.
2. It produces more reliable information.
AI can also work to mine the data that each person provides to the world every day from their social media history, web browsing habits, and other information-processing tasks. If someone does not have a credit history and needs a lending product for some reason, then this benefit allows lenders to determine if that individual presents an acceptable credit risk.
3. It can improve money management.
Citi Private Bank uses the benefits of AI and deep learning to anonymously share the portfolios of other investors to help its customers determine what their best-investing strategy should be in the future. This technology makes it easier to predict where markets are going to go, how companies will perform, and the way investors will react with their trading behaviors. The computational power of deep learning, when combined with the right apps, will consistently beat human predictions.
4. It will help with regulatory compliance.
Artificial intelligence improves the decision-making process because it can examine multiple factors immediately. When there is a denial for credit, such as with a loan refusal, regulations may require an explanation for that decision. According to Jean Chalopin, an entrepreneur “By using the deep learning process, AI can reduce risk while improving communication because it can offer accountability beyond the calculation of cash flows or the prediction of a future scenario.”
5. It works to reduce fraud.
Hackers often target the FinTech sector because of the number of assets that it manages. Innovative deep learning algorithms can examine patterns of regular use, and then identify actions that fall outside of that baseline. This process makes it easier to see where fraud may occur.
Future of AI and Deep Learning in FinTech
The critical elements of a successful embrace of artificial intelligence and deep learning are time, skill, and access to data. When you have them together in the correct combination, then you can provide fuel for an engine that will save the FinTech sector time and money. Every transaction becomes a source of data that can be analyzed, and then optimized, for use.
Those who take advantage of these benefits will see the most success in the future. That is why the next significant innovations in AI and deep learning will likely come from this industry.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.
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