Around 100 of the U.K.s finest minds in the financial technology sector gathered Tuesday for the Financial News and WSJD inaugural Fintech Conference in London. The group, which included members of Financial News’ 40 Leaders in Fintech, were broken up into working groups, each looking at different aspects of the future of banking, including regulatory requirements, security concerns, big data conundrums and rapidly changing customer demands.
Their mission: Design the Bank of 2020.
Here are some of the key innovations they came up with:
1. Banks and financial services firms will revolve around customers’ choices. For instance, as you develop and start saving money, you will have the instant and personal choice to delegate your money management to a number of providers, or you can manage it yourself. You will be able to set criteria that auto update your portfolio with your preferences, for example, investing only in environmentally sustainable businesses or the country where you were born.
2. The banks of the future will be on mobile phones. For example, your phone will be learning of investment opportunities on an instantaneous and ongoing basis and presenting them to you.
3. There will be robot advisers that stop you from making unsound financial choices, in real time. For example, if you try to buy too many shares in a company, an automated Know Your Customer and Suitability Tool will prevent you from doing so. If you make an impulse buy of, say, a jacket that you don’t really need [the tool knows what jackets you already have], it will tell you what you’re trading off in terms of future savings for your pension or your children’s education.
4. Powerful algorithms will monitor the behavior of a bank’s data to identify external and insider security threats.
5. Banks could become identity brokers, analyzing and using the information they know about their clients, and giving that insight over to customers or other vendors for specific products and services, like insurance, and creditworthiness.
6. Banks will be replaced by platforms that are run almost entirely by algorithms and robots – they will essentially become technology companies that mediate information and analysis about customers, products, and markets.
7. The bank account of the future will be bank-agnostic: an open ecosystem where you manage all of your current and future financial needs. Bank accounts will be like your cell phone number, it’s still your account even though you can move it from one bank to another. The account will represent your identity and you will be able to keep it regardless of who is providing the service, be it a bank, a large tech firm or a young company.
8. Blockchain technology will be widely used to distribute, verify and record a wide-range of financial services, making the financial system more decentralized. Some risks will be eliminated, while some new risks will be introduced.
9. Social trading will become widespread, with lending, borrowing, and trading on social network platforms.
10. Decentralized and crowdsourced loans, mortgages, and risk management products will become the norm. Traditional middlemen will be cut out, with institutional investors providing funds to consumers or businesses directly through online platforms.