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Shaping the future of finance

Is the future frightening or great?

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My partner called me and said she was in trouble. She had just been to the bank and was overdrawn by $1,500. Could I send $4,000 quickly to stop the bank from freezing her account? Of course, I did … only to discover it wasn’t her.

People are warning us that quantum computing, deepfake and AI is going to create a huge can of worms.

“AI, powered by quantum computing, is going to put financial crime on steroids.” Virgin Money CEO David Duffy

And yet Lori Beer, CIO at JPMorgan Chase, says that: “Financial services has been identified as one of the first industries that will benefit from quantum technologies.”

Who’s right and who’s wrong? Well, both and neither.

This is because technology, as always, has a positive and negative vibe. This has been true since humans invented the wheel and fire. You may say I’m wrong, but think about it. Imagine a neanderthal seeing his friend create fire. Is your reaction: “wow, that’s great, I can now eat hot food!”; or is it: “what are you doing you freak, that could kill us. Put it out now!”

The wheel?

“Woohoo, we can go and get around quicker!” or “WTF? The speed that goes could kill us!”

Whenever we make progress – usually with technology – there is fear and opportunity. This is exactly where we are right now with AI and quantum computing. Fear and opportunity.

For financial markets, quantum will turbocharge flash computing. Global markets will operate in nanoseconds without limits. That is a huge opportunity and truly frightening. The same is true for cybercrime and criminal activity. So yes, there will be more crime and concern, but it is no different to the way it has ever been.

Just as with the wheel and fire, quantum and AI just moves the human race along a path of development and progress that is unstoppable. In fact, it is likely that soon we will have something else to be bothered about, such as multiplanetary travel and life on Mars. Every time we move forward and develop, we create fear and opportunity. It is a basic of humanity.

So yes, quantum and AI creates huge issues with fraud, but equally in fighting fraud. The first uses of AI has been mainly in fighting fraud. As PWC note:

“AI is already widely used to prevent and detect fraud, in particular within banking and technology companies. Machine learning is commonly deployed to improve the detection of suspicious activity and malicious content.”

As Rahul Patil notes:

“Quantum computing holds tremendous promise for revolutionizing algorithmic trading. With its inherent ability to handle massive amounts of data and solve complex optimization problems more efficiently, quantum computers have the potential to enhance trading strategies, minimize risk, and optimize portfolio allocation like never before.”

Are we frightened or excited about the future? Do new technologies improve humanity or destroy the things we believe in?

Your choice, but I’m about to see if my cat is dead or alive … (when you know, you know)

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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