FinanzaWhose Future Does Finance Belong To?

25 Luglio 20230

The financial world is evolving rapidly thanks to emerging technologies such as blockchain and artificial intelligence (AI). Both have the potential to have a profound impact on finance, but in different ways. Looking ahead, a key question is: Will blockchain or AI determine the future of finance?

Blockchain: The basis for a new financial system

Blockchain first entered the financial industry’s radar thanks to the rise of Bitcoin. But blockchain is much more than the technology behind cryptocurrencies. The blockchain is a decentralized, distributed ledger that records transactions and enables secure and transparent peer-to-peer transactions without third-party intermediaries.

Blockchain has attracted the attention of major financial institutions and companies around the world. Accenture estimates that investment banks alone could save $8 billion to $12 billion a year by adopting blockchain for some functions. Why the enthusiasm? Blockchain offers several important benefits to finance:

– Increased security and reduced risk of fraud through encryption and distributed ledgers.
– Faster transactions and greater efficiency through smart contracts
– Reduced costs through the elimination of third-party intermediaries
– Increased transparency through immutable and shared ledgers.

Many experts argue that blockchain will revolutionize finance the way the Internet has transformed media and commerce. American Banker, for example, predicts that blockchain could replace traditional banking systems. Others predict that decentralized finance applications (DeFi) will provide banking services such as loans without traditional banks.

From simplifying cross-border payments to the ability to trade securities in tokens, blockchain has enormous disruptive potential. “Blockchain points the way to a future of programmable, self-executing financial transactions conducted among intelligent digital agents,” writes EY’s Paul Brody.

AI: the brains behind the new finance

Like blockchain, AI is transforming finance. But while blockchain provides the distributed and secure structure for transactions, AI provides the brains to power smarter financial services.

AI is already becoming an integral part of everything from credit decisions to fraud detection, portfolio management and beyond. According to a 2022 Economist Intelligence Unit report, 97 percent of financial institutions are using or experimenting with AI.

In asset and investment management, AI robo-advisors such as Betterment and Wealthfront automate portfolio management, investment recommendations, and rebalancing. For credit decisions, AI evaluates alternative data sources to assess risk more holistically. Chatbots handle customer inquiries, while AI analyzes trading data and news to generate stock recommendations.

The benefits that AI brings to finance are.

– Faster and more accurate analysis and decisions through machine learning.
– Identification of patterns and insights that might elude humans
– 24/7 availability for customer service interactions
– Continuously improving systems that learn over time

Many even predict that AI will give rise to “autonomous finance,” in which AI will not just support finance professionals, but autonomously manage many processes from start to finish. Autonomous finance could be future-proofed against disruptions such as pandemics.

The outlook: Collaboration, not competition

When looking at the future of finance, blockchain and AI may seem like competing technologies. In reality, according to experts, blockchain and AI will likely develop symbiotically, amplifying each other’s strengths.

Here are three ways blockchain and AI could converge to transform finance:

1. AI managing blockchain networks-AI’s optimization capabilities can help manage decentralized blockchain networks, addressing challenges such as scalability. AI models can predict transaction volumes and adjust network parameters accordingly.

2. AI analysis of blockchain data – Blockchain generates large amounts of valuable data. AI can discover information from transaction metadata, wallet addresses, and activity on the blockchain. This data can be used for trading, credit scoring, and financial forecasting.

3. Machine learning for smarter contracts – Blockchain smart contracts enable automated financial transactions. The integration of machine learning takes smart contracts to the next level, enabling dynamic and responsive contracts that can adapt to new data.

According to Visa, “applying AI to blockchain data unlocks the true power of both technologies.” The synthesis of blockchain and AI could produce revolutionary financial applications, from smart investment platforms to self-managed DeFi protocols.

The big picture

Taking a step back, both blockchain and AI are part of the historic wave of digital transformation sweeping finance. Traditional financial institutions must keep pace or risk obsolescence. But change also creates opportunities to make financial services more inclusive and accessible.

As Accenture notes, emerging technologies such as blockchain and AI enable finance to “create consistent, frictionless experiences for customers; expand access to the underserved; improve data security and resilience; increase transparency; and achieve radical cost efficiencies.”

Ultimately, it is likely that the future of finance belongs not just to blockchain or AI, but rather to those who can strategically leverage both. As IDs, Nicolas Kokkalis and Rodrigo Amaro, write: “The sweet spot for financial services will be found where all three of these technologies intersect: blockchain, AI and cloud. That is where the most disruptive innovations will happen.”

The path forward requires agility, openness to emerging technologies and a focus on positive societal change. As financial institutions navigate this landscape, blockchain and AI will remain crucial and interconnected forces shaping the future of the industry.

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