At the turn of the 19th century, the Industrial Revolution completely changed the landscape for countries worldwide and introduced us to mass production of consumer materials. During the 20th century, the Internet's Information Revolution upended years of established business, education and communication practices. What have we seen with each major transformation? Increased prosperity in populations that were prepared for the tidal wave of innovation that swept the world. So, what does the 21st century hold? The 5th paradigm of Computing. The Technology Revolution is upon us.
For the early adapter, mass artificial intelligence (AI) integration, virtual worlds hosting businesses and currency, and remote access and mobility are the new tickets to prosperity. Where will we see the greatest and most challenging changes? The world of finance; more specifically, banking and investing.
The purpose of this paper is to raise awareness of the effects of the Technology Revolution (i.e., The Internet of Everything) and how it may affect a world population.
Virtual Currencies are Coming
If you aren't familiar with the world of virtual currency, you might want to take some time to further investigate. It seems that virtual currencies – such as Bitcoin, Dogecoin, Ethereum, and a whole basket of other, less popular alternatives are sweeping the financial world. The advantages that are offered by utilizing virtual currency are enormous. First, they offer populations from varying countries the opportunity to buy and sell with citizens from other countries without the need for exchanges, burdensome fees, and delays of days or weeks.
Second, they offer trust and safety without the need for a third party (such as card processors, money transfer entities or banks). Thanks to the blockchain technology, transfers of virtual currencies are virtually hack-proof, and once verified by proof-of-stake or other similar verification processes, you are assured of the validity of your transaction.
And last, but definitely not least, virtual currencies are not controlled by centralized governments, and therefore cannot be manipulated like fiat monies. You have only to look at the situation in Venezuela or India to understand the significance of this element.
Banking with Apps and Mobility are Key
As you witness the oncoming tidal wave of virtual currency and Blockchain technology, the banking industry is also undergoing revolutionary changes. The banking industry, however, is experiencing winds of change from several directions; Yes, Blockchain technology is going to have a tremendous impact on the future of financial transactions, but in addition to this impending change, Banks are also during a greater challenge: Millennial Banking. The big banks are beginning to develop marketing strategies to appeal to this ever-growing class of customers, but smaller, local banks have been slow to act. Marketing to the Millennials, and then to Gen Z will require apps, mobile services, lower fees, and secure operating environments. These tech savvy generations may force changes in the brick and mortar existence: physical locations and human tellers may become a scarce commodity.
Investing with Algorithms will be the Norm
Everyone has seen the commercial of the father and son, sharing a nice dinner, discussing the future. Father asks if son is saving. Son says, "sure" and begins to ask about his Father's investing firm; such questions as rate of return, refund of fees, etc. Father looks at him with a wry smile. "That's not how it works" he says. Son says, "maybe it should". If that's not a wake-up call to investment firms, brokers, and even investors, there will never be one.
The perfect financial storm is bearing down upon us. You have generations coming of age that perfectly understand apps, algorithms, and the virtual world. You have mass integration of virtual currencies set to bring another 2 billion people into a "banking market" of some variation, and many of the younger, technologically savvy generation won't continue to allow "business as usual" in the investing world.
You have only to look at many of the trading brokerages today, and access the new trading and research platforms to understand that changes to the investing landscape using algorithms and artificial intelligence are becoming the norm. Not only do algorithms provide results based on mathematical information, they allow individual investors to make choices based on their interest, their concerns, and their socially responsible convictions. No more gut instinct from a broker that just might be more interested in his commission than the health of your account.
I can say one thing with certainty: Regardless of the actual date of arrival, change is coming…