In the 20th century, the Banking has constantly evolved and now offers four main services: the safekeeping of money, payments, loans and investments.
These services are vulnerable as they are offered now, starting with the safety of the people’s savings. One of the major technical challenges of the 21st century is to bring more security for both the clients and the banks. How can we evolve each of the above services?
The safekeeping of money and other valuables
The method that banks use to provide this service is nothing like it was in the 20th century – money is mostly a handful of digits on a network and its safe keeping doesn’t require large physical space but simply high-quality data storage devices that will be secure and will be safe and it can even be placed outside the bank.
With the uprising of crypto currency and with the digitalization of the monetary storage via crypto currency wallets and devices, in the future it is possible that banks won’t even exist physically – they might just be a VI computer program, accessible via devices that connect to the internet which will handle the storage and transfer of currency. People already just run through their credit card when making a purchase instead of handling cash, so it’s not unfair to assume that banks will store crypto currency online and its contents will be accessible via crypto currency devices
The same technological intrusion into the tradition of the system is happening again in this method as well. The 20th-century paperwork payment making is replaced with what now is called “the simplest method of sending money from one person to another”, again with the use of digitalization via credit cards and such. China is one of the early adopters about dematerialized payments, especially with the famous WeChat app that has a payment feature.
And this is only the beginning.
With the universal uprising of crypto currency, it is possible that the different currencies which countries have will simply transform into different forms of crypto currencies, stored in different crypto currency wallets and devices, and payment will be done by the transfer of credits either via USB ports connected with a wire, or even wirelessly via Bluetooth, having a VI computer program acting as a mediator, functioning similarly to a bank.
As time passes, these crypto currency devices and wallets can merge with other devices (just like our iPhones now are watches, alarm clocks, calculators, cameras and phones at the same time) and people will be carrying a multi-functioning wallet with all the data they need (data including their amount of credits or crypto currency).
The process of making loans from banks to people is pretty much the same from the 20th century up till now, with the difference on how the internal process is done.
There’s a lot more automation in the loaning and digitalization in the loan calculation process (differences, interest etc) but banks still do physically give out paper made money to people.
In some situations, the process is advanced and loans can be received on credit cards on which the loaning process is totally automated and digitalized, while the spending and the return of the loan is also.
With again, the uprising of crypto currency and crypto currency wallets and devices, it is possible that in the future loans will be made digitally, through the blockchain, make the calculations and then transfer the credit or the crypto currency on your secure personal data storage device (which will also store crypto currency).
It is reasonable that the physical existence of banks will diminish as the internet and its online internal and external banking and loaning processes will become the mediator, regulator and the source for loans of credits and crypto currencies.
The popularity of automated investing has started to render active fund managers irrelevant. An article from the Wall Street Journal puts it bluntly: “Active fund management is outmoded, and a lot of stock pickers are going to have to find something else to do for a living.”
Automation is yet again, proving to be the direction where the whole banking process is leaning towards. Instead of hiring a budget manager or a stock broker to hectically and neurotically look for the “best quality for the lower price” deals on a constant basis, in the future there might be AI computer programs with complicated mathematical formulas which will calculate the investments to your needs.
You will simply enter all the parameters of your investment (budget, quality, quantity, type of investment, time span in which the investment is supposed to be done and etc) and the computer with Nano speed will constantly be doing calculations based on the parameters you input and eventually, come up with the best solution to your investment problem.
As we know already that computers advance with an astonishing speed, it is reasonable to assume that in 100 years there will be computers with enough hardware and software potential to handle such complicated applications and processes to do the job efficiently and, if not even execute it perfectly.
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