April 23, 2017
We’re FinTech infovores here at Let’s Talk Payments so it’s not surprising that we come across a lot of great content. So we thought instead of us just passing these great articles around in our Slack channel, we’d share them with you, loyal LTP readers! And we aren’t just sharing articles we agree with, rather articles that made us think this week.
The multi-billion dollar question is: how much do we trust AI with our money?
Machine learning (ML) continues to bombard FinTech, from capital markets to personal savings. The benefit of leveraging neural networks and other ML technology is decisions, based on patterns and data feedback loops, can be made faster and better than any person could dream. The question is, at what cost? How much data are consumers willing to fork over for better security and money saving?
The line that made me think (emphasis mine), So in five years, we should be really good at giving people financial advice before they even realise they need it. This sounds great on the surface but who’s responsible when an algorithm makes a significant financial decision you don’t agree with?
According to Bookstaber, it’s time to stop tweaking a 150-year-old model that seems to be getting worse, not better, at predicting crises, and embrace something totally new.
Risk is fundamental to the financial services sector. Modeling, predictions, and economic theories of markets shape major decisions individuals, businesses, and regulators make about the future. You’d think the deluge of data we have would dramatically improve the current risk assessment models, preventing more and more unforeseen. What if our current models have fundamental flaws? There is no denying modern economic theory has helped fundamental progress be made in society but what if there are major flaws holding us back? Using history as our guide, it shouldn’t be surprising that we will discover theories and models to better understand how our complex economy works. It’s more a question of when will we recognize it?
The U.S. has been somewhat quiet on the blockchain startup front, which has more to do with regulatory issues than a lack of companies that can innovate, and that has resulted in an absence of blockchain buzz in Silicon Valley.
Anyone following LTP and FinTech is keenly aware of blockchain; there is no shortage of worldwide hype or activity. What’s fascinating is how different countries, regulators, and economics are embracing blockchain technology. If blockchain fulfills its promise, entire industries will need to be reimagined (and lots of middle and back-office works will need a new home!). However, this are early days for blockchain and we have to wonder if everyone implementing blockchain is truly weighing the tradeoffs and planning for inevitable hiccups in implementation. As with anything new, experimentation is the only way to learn and there are plenty of blockchain companies being created. That said, regulators in the US may benefit from a ‘wait and see’ approach to blockchain regulation by learning from others.
Consortiums tend to largely be clandestine ventures with little visibility on what’s going on on the inside.
LTP’s Aman Trivedi, our internal blockchain guru, provided a great overview of the blockchain consortia ecosystem to help you know who’s who in these blockchain groups. What’s the difference in R3CEV, Hyperledger, and Ripple? The sparse amount of information on these consortia is a tad ironic as central thesis of the original blockchain (bitcoin) is transparency. Blockchain, despite how much it has been in the news, is still very new. Most blockchain companies (and consortia) will not be around in five years, so time is the ultimate judge. That said, keeping tabs on what’s happening is critical to almost every industry.
We plan on sharing several articles each week. Tag LTP on social media if you think there is a ‘must read’ from the week!
See you next week!