INDUSTRY – FINANCE
INTRODUCTION
In 1967, when ATMs were introduced, it was expected to spell the end of bank branches and bank teller jobs. Instead the number of bank branches and tellers increased, with their roles emphasizing sales and customer service, rather than dispensing money.
In 1994, when on-line banking was introduced, a major loss of jobs was prophesied. And this time jobs did start to be lost – but less than expected, because of resistance to technology from an older demographic and from some industries (such as real estate).
Currently, several technologies are coming together to have a significant impact on the industry and its employees:
- On-line digitized payments using mobile phones are reducing the need for cash – and this is being encouraged by governments worldwide partly because of concerns about illegal payments and money laundering, but primarily because the replacement for cash – digital currencies – provide government information and control over all receipts and payments, i.e. the complete loss of privacy. (Visitors to China have noticed that most business people no longer carry purses or wallets – just their mobile phones.)
- The internet continues to reduce the need for bank branches, tellers, and stock brokers.
- AI is being used to automate credit application processing and financial planning.
- Blockchain has the potential to totally re-structure the finance industry with its ability to by-pass the need for a trusted third party in financial transactions, such as international trade, money transfers, and mortgage processing.
- The impact of digital currencies, like bitcoin, and of central bank digital currencies (‘CBDC’) is only just starting. In 2020, China began testing their CBDC, the e-yuan, in major cities with millions of transactions completed before thee year-end. Also in 2020, the Federal Bank of Boston started to examine the use of a so-called Fed-coin, and all major central banks are studying how to implement a CBDC.
This time the writing on the wall really does need to be read!
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First live blockchain-based settlement of U.S. equities (Equities/Blockchain - 2020-02 - Coindesk)
New York-regulated crypto startup Paxos, in conjunction with Credit Suisse and Nomura-owned broker-dealer Instinet, has implemented the first live blockchain-based settlement of U.S. equities.
Comments on the impact of financial bots on jobs in the finance industry (Robotics - 2019-10 - Bloomberg)
Robots have replaced thousands of routine jobs on Wall Street. Now, they’re coming for higher-ups. Varied comments include:
“Financial machine learning creates a number of challenges for the 6.14 million people employed in the [US] finance and insurance industry, many of whom will lose their jobs – not necessarily because they are replaced by machines, but because they are not trained to work alongside algorithms.” (Lopez de Prado)
“43% of CFA members and candidates expect their roles to change significantly in the next 5-10 years … The 3 roles most likely to disappear are sales agents, traders and performance analysts.”
HSBC swaps paper records for blockchain to track $20 billion worth of assets (Banking/Blockchain - 2019-11 - Reuters)
An HSBC platform will digitize paper-based records of private placements, using blockchain to reduce the time it takes investors to make checks or queries on holdings. These records are typically held on paper and lack standardization, making access tricky and time-consuming. HSBC currently looks after up to $50 billion worth of the assets.
AI will replace 200,000 US banking jobs by 2030 (Finance/AI - 2019-10 - Big Think)
A Wells Fargo report predicts that, before 2030, over 200,000 jobs will be lost in the US banking industry, which is investing $150 billion a year into technology. Branch, call center, and corporate employees will be cut by about 25%.
HSBC processed the first blockchain letter of credit using Chinese yuan (International Trade/Blockchain - 2019-09 - Reuters)
HSBC completed the first yuan-denominated blockchain-based letter of credit transaction. HSBC and other banks want to use blockchain technology to streamline the traditionally paper-based and bureaucratic business of financing trade. HSBC used the Voltron trade finance platform, developed by them and 7 other major banks.
The insurance adjuster is a drone (Drone/Insurance Adjusting - 2019-06 - ZDNet)
Drones have become a key tool in the insurance sector, where damage assessments are frequently performed by drones equipped with machine vision and AI.
Every rental contract in Malta will be registered on the blockchain (Rental Contracts/Blockchain - 2019-06 - CoinDesk)
Malta will require every rental contract to be registered on the blockchain. This ensures security, prevents record tampering, and ensures only authorized persons can access the records. The distributed ledger prevents there being contracts for which there is no record.
A blockchain-based real-estate transaction platform can close a traditional real estate deal entirely online (Real Estate/Blockchain - 2019-06 - CoinDesk)
Propy is a real-estate transaction platform that empowers buyers, sellers, their agents, and escrow agents to close a traditional real estate deal entirely online. The purchase offer, payment and deeds are uploaded to an immutable blockchain. Propy completed its first deal in 2017, its first US transaction in Vermont in 2018, and has assisted worldwide in over 60 real estate transfers.
Tata settles securities between national depositories on a blockchain (Securities/Blockchain - 2019-04 - CoinDesk)
India’s Tata Consultancy Services has completed a blockchain trial of cross-border securities settlement between two central securities depositories. The successful pilot project created a set of equity and fixed income securities for Morocco’s Maroclear depository and the Kuwait Clearing Company. Segregated accounts to hold the securities were also created. The cross-border settlement instructions for these securities were matched and settled instantaneously, with confirmation notifications also arriving in real time.
French lender Societe Generale issues $112 million bond on Ethereum blockchain (Investments/Blockchain - 2019-04 - CoinDesk)
French financial services giant Societe Generale Group has issued bonds (to itself) worth $112 million in the form of a security token on the public ethereum blockchain: “Many areas of added value are predicted, among which, product scalability and reduced time to market, computer code automation structuring, thus better transparency, faster transferability and settlement. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.”
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