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Blockchain & AI remain beyond the horizon for end users…for now

Blockchain & AI remain beyond the horizon for end users…for now

(9 October 2018 - USA) BAML COO & CTO Cathy Bessant believes blockchain has years to go before it has significant benefits for consumers and investors.

Blockchain and other fintech innovations are not expected to have significant, practical impacts on consumers for at least another several years, financial leaders were told at conferences for SIFMA last week. “Blockchain/distributed ledger technology is not as impactful as the hype,” asserted Cathy Bessant, pointing to DLT as a promising technology waiting for proven benefits for consumers, businesses and regulators to cash in and it is effectively confined to labs for the foreseeable future. Panel speakers were generally in agreement that fintech’s promises will take years to become everyday realities.

“There’s nothing at scale now. It’s untested and untried,” said Bessant, who also addressed the discussion surrounding artificial intelligence (AI). “Nothing makes me crazier than when someone says AI is better than human intelligence. It is a subset of human intelligence,” complained the high-level BAML executive. Robo advice is another fintech innovation that hasn’t blossomed, JPMorgan Asset Management CEO of Asset Management Christopher Willcox said during the week in Washington. “Robo advisor technology has a long way to go,” argued Wilcox. He compared the current limitations of robo advice to Amazon at in its early stages where the only thing the technology could help a consumer to do was to get a book. During the SIFMA and CFTC meetings, fintech was often called so nebulous it can get in the way of discussions about the impact technology can and could have on finance. CFTC CIO and LabCFTC Director Daniel Gorfine said the trend is to drop the term “fintech” and speak about the specifics. Businesses will have to grapple with bringing fintech to its full potential by integrating it with their long established and relied upon legacy systems, said Fidelity technology executive Sanjiv Mirchandani. “Technology layers on top of each other. The old never goes away,” said Mirchandani. One factor propelling fintech is pressure from the financial crisis for financial companies to reduce costs. Another hurdle pointed out CFTC LabCFTC Attorney Brian Trackman is people are much more forgiving when a human makes a mistake than when a machine or AI does. With all of the advertised promises of fintech, there is an undercurrent of unease by the public about the flood of new and potentially privacy invasive technology, Citi Global Head of Fintech Policy for Global Consumer Banking Andres Wolberg-Stok acknowledged.

“The problem is not doing so much behind the scenes it looks creepy to consumers,” he said. Likewise, new CFTC Commissioner Dan Berkovitz said he is finding technology difficult to fathom as a consumer as well as a regulator. Taking an overview on fintech, both CFTC Chair Chris Giancarlo and Comptroller of the Currency CIO Beth Knickerbocker said reaching consensus among regulators is key to boosting blockchain, cryptocurrency, AI and other emerging financial technologies. But while consensus building is underway, they acknowledged the destination has yet to be reached. Within the SEC, Szczepanik said consensus on fintech oversight among the agency’s divisions will be as important as coordination with other regulators.

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