Insights from Brett King’s FITSPA 2023 conference presentation;
In an age where floppy disks seem like ancient relics, technology continues to evolve at an astonishing pace. The 2020s have been dubbed the “Decade of Man Plus Machine,” signifying the symbiotic relationship between humans and technology. As we celebrate the incredible progress we’ve made, let’s consider this fact: your smartphone, a device you use for selfies and mobile gaming, has 5 million times more processing power than the computer that landed humans on the moon in 1969. It’s an extraordinary testament to how technology has become intertwined with our daily lives.
This is no different for the banking sector, the banking and financial services ecosystem is rapidly changing. Traditional banks that do not embrace digitization are at risk of becoming obsolete. Instead, we see technology-first organizations and fintech companies taking center stage. In Uganda, as in many parts of the world, mobile payments are revolutionizing the way we transact, and this is just the tip of the iceberg. As we look ahead to 2050, the future of banking, particularly in Uganda and Africa, is set to be transformed by science and technology.
At Kanzu Banking, we’re excited to explore the possibilities that the next three decades will bring and how fintech, AI, and cutting-edge technologies will shape the banking landscape.
To understand the trajectory of banking, we can categorize it into five distinct eras:
1. Bank 1.0 (Traditional Banking): The conventional way of banking that has been around for centuries.
2. Bank 2.0 (Self-Service Banking): The introduction of ATMs and Internet banking in the 1990s.
3. Bank 3.0 (Fintech Revolution): The era that began in 2007 with the rise of smartphones, leading to a paradigm shift in the design of banking.
4. Bank 4.0 (Embedded Banking): The era where financial services become seamlessly integrated into our daily lives, think “buy now, pay later.”
5. Bank 5.0 (Autonomous Banking): A future where AI-driven algorithms may replace the majority of human roles in banking, reshaping the industry’s structure.
As seen above, the rise of digital competence is inevitable. Today, some of the world’s fastest-growing financial institutions are digitally competent technology-first companies, not traditional banks. From China to Latin America, digital players are gaining ground. As a result, market share is shifting, and financial services and banks that fail to adapt will likely face challenges in the coming decade.
AI: The Future of Banking
Artificial Intelligence (AI) is the next frontier in banking. It’s not about AI being smarter than humans; it’s about condensing vast amounts of data and knowledge into algorithms that can provide superior advice. We’re currently in the alignment phase, seeking ethical guidelines for AI’s safe operation. But the advice phase is just around the corner, where AI will augment human expertise across various sectors, including healthcare, law, and financial services.
AI has the power to transform traditional bank accounts into “Smart Bank Accounts.” These accounts will offer real-time advice, helping you manage your money, save better, and make financial decisions with unprecedented precision. Think of it as a personal financial advisor right in your pocket, accessible through your smartphone.
Massive tech giants are poised to wield tremendous influence as we move into the 2030s. Their relentless innovation in AI and other technologies is redefining entire industries. We’re already witnessing the birth of smart glasses and augmented reality, and we’re just scratching the surface. When we consider the transformative potential of AI and smart glasses, it’s clear that banking and financial services are on the cusp of an incredible revolution. Traditional banking methods, such as going to a branch and filling out forms, are becoming relics of the past.
In the future, your smart glasses as seen above could provide you with real-time financial insights and advice. Imagine walking into a store, and your glasses inform you that you may need extra cash for your shopping, offering to provide it instantly for a small fee. No more declined card situations or last-minute credit applications. It’s banking that understands your needs before you even ask.
And when it comes to significant financial decisions like buying a home, the data-driven insights of tech giants like Google and Apple will be at the forefront. They’ll know your intent to purchase a home, possibly even before you do. The AI-powered financial landscape will focus on understanding your needs and providing solutions proactively, making your life simpler and more convenient.
As we venture further into the “Decade of Man Plus Machine” and beyond, Kanzu Banking is committed to staying at the forefront of these technological advancements. We’re excited to be part of the fintech revolution, helping you embrace the future with confidence.