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Banks Are Turning Towards Blockchain And Artificial Intelligence

by on June 6, 2016
 

Financial institutions all over the world are keeping a close eye on financial innovation these days. Blockchain technology and artificial intelligence both seem to be gaining importance. However, neither solution is cheap, and the price tag could be a significant entry barrier for a lot of players.

Artificial intelligence has been referred to as a way to disrupt banking at the core. Robo-advising is an obvious example of combining finance with machine learning and artificial intelligence. Automation in the industry will happen at some point, yet it remains to be seen how that will materialize exactly.

Blockchain technology is another hot trend in the financial sector these days, although there is very little effort to show for it. In fact, a recent study by Synechron Inc. demonstrates how only 12% of survey respondents are working on the blockchain. The other 88% has projects in development or not interested at all.

This number is in stark contrast to the 55% of participants feeling that blockchain will change the game in the next ten years. However, there are a lot of regulatory issues to overcome, which is something about half of the respondents sees as a hurdle. Artificial intelligence has its own hurdles as well, particularly when the total cost is concerned.

Artificial Intelligence and Blockchain In Finance

Both types of technology are entwined with the future of finance as we know it. Once thought of as concepts that would only exist in science fiction, artificial intelligence and blockchain have come a long way in recent years. Despite the high costs, more banks are working on AI solutions compared to blockchain projects, though.

Getting involved with either blockchain or artificial intelligence requires a solid plan and an eagerness to learn. Just because something is labeled as “smart” does not mean it won’t require involvement and dedication to make it work. Additionally, once solutions are deployed, enterprises must stick with it and assign targets that need to be reached.

Despite the impact blockchain technology will have in the next ten years, it will take some time until the business evolves. It is important to note financial institutions do not need to love the blockchain to see the potential. Important applications and platforms can be built on top of this technology, yet it will take time, money, and effort to do so. Almost nothing worthwhile comes for free in this world.

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