2022 will be a year of immense opportunity and growth for the financial technology sector. Companies from across the globe are leveraging blockchain, machine learning, and other emerging technologies to disrupt traditional banking models. Banking institutions have been slow to embrace these technologies, but the tides are beginning to turn. Banks recognize that they need to adapt if they don’t want to be left behind by this technological revolution.
The State of Blockchain In 2021
In 2021, blockchain technology finally reached a tipping point as many corporations and governments began testing its potential applications across a wide spectrum of industries. IBM has been at the forefront of blockchain development, launching an entire product suite devoted to this emerging technology. The IBM Blockchain Platform was launched in March of 2021 and is designed for enterprise applications that want to take advantage of blockchain capabilities like smart contracts.
Not only did large corporations get on board with blockchain in 2021, but governments also began testing its potential. Dubai plans to become the world’s first blockchain-powered government by 2020. In the United States, Delaware made strides to be a leader in blockchain as well as President Trump signed a congressional bill for blockchain technology to be used for data collection from the Department of Homeland Security.
The State Of Artificial Intelligence In 2021
Artificial intelligence (AI) has been making waves for decades, but it wasn’t until recently that consumers began to really see the benefits of AI in their day-to-day lives. Companies like Google and Facebook have been using AIs to personalize users’ feeds for years. However, many consumers did not begin seeing the benefits of this technology until 2021 when Apple unveiled its intelligent assistant Siri 2.0.
The IBM Watson Conversation Service was also launched in 2021, marking a pivotal point for AI as a whole. This tool allows anyone to build their own chatbots for Facebook Messenger, Slack, and other communication platforms through the use of natural language processing (NLP). Consumers were finally able to interact with AI in a way that goes beyond the traditional question and answer model.
Many experts believed that 2021 would be a watershed moment for AI as the technology continued to progress at an exponential pace. This prediction ended up being true as many companies began rolling out intelligent chatbots to better serve their customers.
AI Trends in Banking and Finance
Financial institutions are just beginning to explore how they can leverage artificial intelligence in their day-to-day operations. Many banks are beginning to use AI chatbots to better serve their customers, particularly when it comes to questions regarding bill pay and deposits.
IBM has been working closely with Capital One on several initiatives that combine blockchain technology with artificial intelligence in order to improve banking services for consumers all over the world. Their partnership was kicked off in 2017 when they announced a partnership between IBM’s Blockchain Platform and Capital One’s API platform in order to make bill pay faster, more secure, and more reliable.
Although this is certainly an exciting time for AI enthusiasts, there are still many barriers associated with this emerging technology. The biggest concern about AI right now is data protection. Banks are responsible for keeping their clients’ data safe, so it’s important that they take necessary precautions to keep this information out of the wrong hands.
Details about the IBM Future of Blockchain and Artificial Intelligence Study
IBM surveyed over 1,000 banking executives from around the globe in order to get their insights on blockchain technology and artificial intelligence. Two-thirds (66%) stated that they plan to invest $5 million or more in blockchain initiatives by 2021. Most of these investments were geared towards internal development rather than acquisitions or partnerships.
Nearly three-quarters (72%) indicated that they would be investing $5 million in artificial intelligence projects by 2021. A vast majority (87%) also believe that AI will be critical for financial services moving forward. According to the study, 65% of banking executives believe that AI will have a larger impact on the finance industry than both blockchain and robotics.
In addition, almost half (48%) of financial institutions said that they were planning to invest at least $1 million in the Internet of Things over the next two years. Their main areas for investment include intelligent ATM machines and biometric security systems.
Interesting Trends in the Financial Services Industry
Some interesting trends have emerged from the study as well. For example, 77% of banks are embracing change by working with fintech companies rather than viewing them as a threat. Only 23% felt at risk from these emerging technologies, which is much lower than other industries such as energy or retail who felt threatened by their new competitors.
IBM’s survey further confirmed that banks and financial institutions will play a critical role in the development of blockchain and AI technology moving forward. It was very clear throughout the study that banking executives were bullish about both technologies, so it would be safe to assume that we could see even more investments from these companies over the next few years.
This article is part of a paid promotion for IBM Blockchain. I am being compensated to help share this with you but as always my opinions are my own! If you have any questions please feel free to send them my way! And if you’d like some tips on how to kick start your career in Blockchain.