Goldman Sachs Bullish On Bitcoin & Gold As Recession Signals Continue

Recent analyst reports from Goldman Sachs suggests investors should take advantage of the current Bitcoin price dip and buy now.

In a series of slides prepared by one of Goldman’s technical analysis teams and distributed to clients, the bank included one that put the short-term target Bitcoin price at $13,971.  They echo the sentiment shared by many that we are currently in a dip and that now is an ideal time to buy.

Bullish On Bitcoin Goldman Sachs

Source: Goldman Sachs

According to the report, there is also the potential that this could be the first leg of a five-wave count of price rises.  This means that any decrease in Bitcoin price from the $12,916-$13,971 level (where we’re currently at and have been for a few months) would be a smart buying opportunity.

This latest report from Goldman Sachs further adds to the sentiment that investors are once again eyeing the crypto industry.  Last year, Fidelity Investments revealed they would be launching a digital assets division, and earlier this year JP Morgan analysts claimed that Bitcoin has “intrinsic value”.

More recently, billionaire VC investor Tim Draper reaffirmed his belief in a $250k Bitcoin price by Q1 2023 at the latest.  These increasingly bullish feelings from Wall Street and institutional investors around the world will no doubt help drive up the price of Bitcoin in the coming months and years.

Gold was also mentioned favorably in the series of slides from Goldman, particularly in a scatter chart (see below) that “helps to identify where trends in the market are extending or turning on a week by week basis.”  Gold is featured in the “Strong and Stronger” quadrant, which means it has strengthened for both of the past two weeks. The chart also includes a note indicating that it is yet “another week in the top right quadrant for Gold/precious metals”.

Bullish On Bitcoin Goldman Sachs Percentage Increase

Source: Goldman Sachs

This comes in conjunction with a recent note sent to clients by Goldman Sachs saying that the bank expects the US-China trade war won’t be resolved before the 2020 presidential election.  They also said they believed that the economic slowdown will continue and that a recession is likely. Investors have already seen the stock market take a tumble as a result of geopolitical instability, and the U.S. has accused China of manipulating the value of the yuan to damage the profitability of American exports.

These economic conditions have caused analysts to speculate that the recent run-up in cryptocurrency and gold prices has in part been caused by Chinese investors wanting to protect their assets against a devaluing yuan.  This would mean that Bitcoin and gold prices would benefit even further from the continuation of the trade war and a subsequent recession.

BITCOIN DOMINANCE CONTINUES

Bitcoin’s dominance was down slightly this week, to 66% in total.  BTC saw significant growth in activity on futures markets, and many feel that we are currently in a bottom.  Several major analysts see a Falling Wedge pattern on the charts though, indicating that the Bitcoin price has a 70 percent chance of a bullish breakout

China’s digital currency is ready after five years of R&D.  An official from the People’s Bank of China (PBOC) recently stated that the CBDC (Central Bank Digital Currency) prototype exists and that the PBOC’s Digital Money Research Group has already adopted the blockchain architecture for the currency.  China’s CBDC won’t rely purely on the blockchain however, as they want a solution that has sufficient throughput required for retail use.

Mastercard recently added three job openings to their website pertaining to blockchain product management.  According to the job description, they are developing a blockchain wallet solution that will likely be a rival to Facebook’s upcoming wallet Calibra.

GOLD PRICE NOW TARGETING $1,550 LEVEL

After overnight buying took gold to $1,470 an ounce, the precious metal is now targeting the $1,500 level.  According to the MKS PAMP Group, an investment firm, “Early European bids underpinned the metal to a USD $1,470 high, with consolidation above USD $1,500 the key to a further extension of the recent move higher. Gold will now look to target resistance toward USD $1,480-$1,500, while USD $1,520 looms as a pivot for near-term pricing.”

Goldman Sachs also sees gold’s rally as far from over, with analysts saying that ““Gold prices have increased further as a weaker CNY sparked substantial U.S. and global growth fears. With growth worries likely to persist, gold could rise further, driven by an increased ETF allocation from portfolio managers, who continue to under-own gold.”

With no trade deal expected before the 2020 presidential election, investors will see higher gold prices due to increased global growth fears, added Goldman.  Gold’s ETF demand is also on a strong upward trend, with the bank upping its 2019 forecast from 300 to 600 tonnes.

Now is the time to take advantage of the rising price of gold and protect yourself from stock market volatility.  Indicators are showing that these bullish trends will continue in the gold markets, giving you an excellent opportunity for immediate growth and providing protection for your assets against future economic downturns.  Don’t miss out on this opportunity. Act now and reap the benefits of crypto investments.

Products-People-Digital Equilibrium

With Prof. Michael Porter

With Dr. Michael Porter

I am writing this blog post to bring out the essence of our discussions that occurred during the”FT-PTC Future of Industrial Innovation Global Series” organized in New York yesterday. Manufacturing industry thinktank and senior leadership personas have come together to exchange ideas on how manufacturers are adopting new-age technologies to compete.

A joint keynote address from Dr. Michael Porter and James Heppelmann (Jim), CEO of PTC, was an excellent “confluence of thought” that brought together strategic mindset and technology acumen.

While the siloed productivity of human and machine/product has been evolving over decades, the Digital technologies are offering capabilities that can enable progress to the global optima and excellence creating Human-Machine/Products-Digital Advantage. Machine and Products are interchangeably used from now on in the context of manufacturing.  The connection between Products/Machine and Digital (Cloud, Digital Twin, etc.) has been established for some time. This connection enables sensing of a product’s data by digital technologies (edge/embedded) or digital controlling through the optimization of products/machines. But there is a lag between the human-machine and the human-digital connection compared to the digital-machine connection. This lag is causing the “discontinuity” of humans in human-machine-digital ecosystems.

Prof. Porter elaborated on the manufacturing evolution to date as shown below. His vision of the next phase in the evolution is “Smart Connected People”. He emphasized that this phenomenon is happening now with progress from connected products (IIoT) to Smart Connected People with the advent of Augmented Reality (AR) on occasions combined with Virtual Reality (VR) and Xtreme Reality (XR).

ft-ptc1

Today’s interfaces separate the physical and digital worlds. A prime example being the GPS system in the car. The 2D display on the GPS shows directions, but human cognizance has to take that input, process it, and finally execute it. This 2D to the 3D gap is what Dr. Porter referred to as “Cognitive Distance” which results in “Cognitive Load”. Imagine a “Heads Up” display leveraging AR that minimizes and eliminates the cognitive distance and cognitive load. AR narrows the cognitive distance by integrating the Digital world into the Physical world, seamlessly.

Digital transformation is leapfrogging the industrial and manufacturing progress continuum from Monitor -> Control -> Optimize to “Autonomy”. AR technology is uplifting the human connection by enabling visualization and collecting the instruction to pass on to the machine. Technologies like computer vision are promoting the human-machine interaction such that the embedded software & systems are allowing humans to diagnose the inner workings of products which were an earlier limitation. In scenarios where AR gets dangerous, VR can fill the gap with simulations and move forward. Thus, the Human-Machine-Digital equilibrium is being established to drive the next-level of industrial innovation.

ft-ptc2

Prof. Porter’s strategic foresight was well complemented by Jim’s real-world technology development and use cases. New-age digital technologies are expanding industry boundaries through precision agriculture and smart city solutions. In the past, products progressed to smart products and then became connected smart products but the present and future of industrial evolution revolve around “product System” and “System of Systems”. All-in-all it was great mindshare on today’s manufacturing excellence. I am parking the detailed description of use cases to my next blog post.

P4 I summarize this post with two important closing thoughts from Dr. Porter and Jim.

  1. AR enables People as IoT enables Assets/Products
    • Enabling more effective training and guidance to address the shortage of skilled front-line workers
    • Enhancing worker productivity through better collaboration with machines
    • Counterbalancing the shift to automation by empowering human workers
  2. Both IoT and AR combined to change the competitive environment, requiring new strategic choices and organizational models. For example,
    • Technology development: internal or outsource?
    • Disintermediate distribution or service channels?
    • change the business model?

In the end, I interacted with Prof. Porter to reflect on the discussions of the day and sought his expert comments on the man-machine inflection point. Here is the gist of my discussion. Over the past decades, the industry experienced a gradual reduction in annual work hours, resulting in the gradual improvement of productivity and output. One key attribute of productivity is man-machine collaboration. With digital technologies, the man-machine inflection further uplifted the productivity to 2X, 4X and in the panel discussion yesterday, one company executive was mentioning about 9X productivity gains. In view of this, my questions were,

  • Where does the productivity multiplication (constant uplift of human-machine combined productivity/inflection point) lead next?
  • In the near future, is it going to be survival of the fittest between a human vs machine as the trend line of annual working hours continue to decline?
  • In the long term, would machine constantly chase & replace the humans or the cognitive distance prevail in the foreseen future?

I will follow up with Dr. Porter on this and share further learnings. Stay tuned!!

Network Effects & Friendly Developer Moats

Crypto assets are unique in the sense that they are either natively baked into a network or exist on top of a network. There are many crypto assets but one, in particular, deserves your attention. The network is known as Ethereum and it has a native asset called Ether. Ethereum has the most daily users, daily transaction volume, the total number of assets built on top of the network and most importantly, the number of developers.

While Bitcoin is #1 when it comes to total network market capitalization and general market awareness, Ethereum will continue to gain notoriety in the space as it can do what Bitcoin cannot do; smart contractsprogrammable money and decentralized applications. Ethereum has developed an incredible network effect and developer moat during its past four years of existence. This will cause it to not only continue to grow rapidly, but with compounding effects as shown by Metcalfe’s Law.

Network effect is a phenomenon whereby increased numbers of people (developers, companies…etc) or participants (users, investors…etc) improve the value of a good or service. One way to judge a crypto asset’s network effect is to look at projects built on the network.

In the case of Ethereum, there are currently more than 2,600 decentralized applications. In comparison, its closest competitors are EOS.IO and BlockStack which have 297 and 250 applications respectively.

The problem for Ethereum competitors is that they are still building the primitive building blocks that are necessary to create more complex applications. Ethereum has been developing these building blocks over the past few years and includes things like decentralized exchangesoracles, and stable coins. These allow developers to build more complex applications through what is known as composability — the ability to leverage existing projects in order to build something completely new.

Ethereum Building Blocks — Source is Delphi Digital

Source: Delphi Digital

One great example of composability is Set Protocol. This utilizes Ethereum, a stable coin (Dai, built in 2017) and decentralized exchange (KyberSwap, built in 2018) in order to create automated asset management strategies which are sometimes called “autonomous money robots.”

Ethereum Composability — Source is Delphi Digital

Source: Delphi Digital

While there are already projects looking to compose Set Protocol into the next mind-blowing application, Set is just one example of many projects that were created through Ethereum composability.

The term network effect is not new and what we are seeing now is nearly identical to the growth of the internet.

“The internet was of relatively little value to anyone outside of the military and some research scientists at first, but as more users gained access to the Internet, they produced more content, information, and services.” — Wikipedia

This snowball effect that happened in the early days of the internet is happening now with Ethereum.

This network effect tends to create immense stickiness with builders which forms a developer moat. The majority of developers do not want to recreate an entire ecosystem just to deploy their new application successfully. This creates a chicken and egg problem for new networks as developers want access to the basic building blocks to create interesting and complex use cases, which sends them directly to the vibrant Ethereum ecosystem.

This post has only just scratched the surface of Ethereum, which is a constantly evolving organism and is nowhere near its final form. While it’s nearly a full-time job keeping tabs on this lush ecosystem, I do my best. If interested in learning more, feel free to reach out to me directly and I’ll be sure to point you to the best resources.

Reaffirming Bitcoins’ Strength for Long Term Investment 💰

bitcoin

A new study indicates that Bitcoin (BTC) holders make a profit after an average of 1,335 days – which equates to roughly three years and eight months. The data was released earlier by Bitcoin maximalists, and the cycle lengths are shown roughly correlate to the various reward halving events.

The chart (shown above) essentially considers the amount of time between different peaks and how long it would take an investor to profit if they bought at the previous cycle’s peak. Refer to the chart above.

This means that a 100% definite profit would have taken a maximum of 1,335 days, which relates to the bull market run that occurred late in 2013 when the Bitcoin price surged to $1,150. If an investor bought at that price, the peak of that cycle, then it would have meant it took until early 2017 before the Bitcoin price finally broke that level again.

Seeing as this chart is looking at the market extremes, missing the peak of that rally would have resulted in a drastically reduced wait for a profit. Holding Bitcoin for 317 days would have given a 75% chance of profit. You’d have a 60% chance of profit if Bitcoin was held for 35 days, and the likelihood that you were up over any single day was 50%.

If that sounds like a long time, comparable data for the stock market is exponentially longer. To contrast, an investor would have needed to hold their position for 23 years to achieve a sure profit on the S&P 500. This makes it clear that not only is Bitcoin safe, long term storage of wealth, but it is a reliable vehicle for your wealth if you are looking to turn a profit quickly.

It’s also notable that the analysis looked purely at the chance of profit and not the scale of that profit. When Bitcoin is on a bull run, the profits there dwarf those achievable on the stock market indices. A real-world example from this year is the Greyscale Bitcoin Investment Trust, which outperformed everything else so far in 2019 with an appreciation of almost 300% to date.

In addition to Bitcoin, Gold has also been an extremely strong performer this year and is presently a hot topic among traders. Bullish signs continue this week and leading investors have been speaking out on the merits of the precious metal. Mark Mobius, the founding partner of Mobius Capital Partners, appeared on CNBC earlier this week and recommended that investors hold 10% of their portfolios in physical gold.

The latest price targets have the Gold price reaching the $1,600 mark before the end of the year. As global trade policy uncertainty continues, Gold looks a solid bet to keep building on its bullish momentum.

INVESTORS UNNERVED AT MORE WARNING SIGNALS IN STOCK MARKET

Earlier this week, a powerful warning signal revealed itself as the stock market got turned upside down.

Value stocks, or those with low multiples and stable fundamentals, significantly outperformed their growth counterparts. This type of shift is unnerving to investors because “momentum stocks”, or those defined by their large growth expectations relative to the broader market, have outperformed value names in recent years. Rotation away from these stocks could result in a downturn for the broader market.

Over the past 5 years, momentum stocks have blown away their value counterparts. Most of the top-performing S&P 500 stocks this year are growth names. Seven of the 10 best-performing stocks in the benchmark — including Chipotle Mexican Grill, Advanced Micro Devices and MarketAxess Holdings — have a much higher valuation relative to the broader index, FactSet data shows.

Monday’s session was the complete opposite of the year’s trend, however. This, coupled with geopolitical trade uncertainty, casts a dark forecast over the markets for the coming months.

LEADING INVESTOR SAYS ‘GOLD IS THE WAY TO GO’

Mark Mobius, the founding partner of Mobius Capital Partners, appeared on CNBC earlier this week and recommended that investors hold 10% of their portfolios in physical gold.

“Physical gold is the way to go, in my view, because of the incredible increase in money supply,” said Mobius.

“All the central banks are trying to get interest rates down, they are pumping money into the system. Then, you have all of the cryptocurrencies coming in, so nobody really knows how much currency is out there,” he told CNBC’s “Street Signs” on Friday.

Mobius said that investors should place at least 10% of their portfolios in physical gold, with the rest invested in dividend-yielding equities. That’s especially true if the dollar gets weaker.

“People are going to finally realize that you got to have gold because all the currencies will be losing value,” he added.

Gold can retain its value much better than other forms of currency and is traditionally a safe haven during market volatility. A weaker dollar tends to boost the price of gold as global trade in the yellow metal is denominated in U.S. dollars.

“At the end of the day, gold is a means of exchange. It’s a stable currency in some way,” said Mobius.

Now is the time to take advantage of the rising price of gold and protect yourself from stock market volatility. Indicators are showing that these bullish trends will continue in the gold markets, giving you an excellent opportunity for immediate growth and providing protection for your assets against future economic downturns. Don’t miss out on this opportunity. Act now and reap the benefits.

Fashion Builds Trust with Blockchain

fashion BC

The gig economy and millennial are placing experience over just customer service and rewards over loyalty. The expectations are steep rising when it comes to the Apparel and Footwear as the industry leaders are elevating to overall fashion management. Combined with richer experience expectations, consumers are demanding more awareness with granular traceability and sustainability attempting to drive deeper to know more about apparels they buy, including the story behind each garment and how and where they are manufactured. It is high time for fashion brands to prove their trustworthiness necessitating complete transparency across the value chain on ethical sourcing and sustainability. It is more important in current times where many apparel companies lack ethical supply chains, and ~10% of global emissions are produced by the fashion industry alone.

The blockchain beyond cryptocurrencies offers a decentralized structure that provides immutability, transparency, and security making data trustworthy and scalability.  Blockchain technology has the potential to enable creating a fair, safe and more transparent fashion industry.  In this blog post, I will try to articulate how blockchain can bring added value to transforming business model and culture of the apparel industry from a supply chain that prizes consumption to a demand chain that takes pride in sustainability.

By leveraging Blockchain, fashion companies can offer greater transparency in supply chains creating new incentives for companies to change the way they do business and showcase their organizations. As shown in the diagram above, Blockchain helps create a peer-to-peer and decentralized network that connects all stakeholders in the value chain (design houses, farmers, raw material suppliers, manufacturers, transporters, distributors, retail outlets, banks, consumers and other parties of the complete supply chain). Using a decentralized system, all communication between these stakeholders will be direct and will not pass through a specific central entity. Due to its decentralized nature, the blockchain platform will not have any single point of failure and will not rely on any single entity.

The blockchain has demonstrated fashion supply chain transformation improving track-and-trace and inventory management thus far. By a further confluence of Blockchain, 3D printing and AI/ML technologies, the fashion industry may very well see much more dramatic improvements. Blockchain technology empowering fashion business with uniform real-time access to updated product information supplied by brands, a universal pathway for retailers to immediately report back to suppliers on aspects like stock levels and customer feedback, and has potential to add further on to this new building block structure.

Summarizing below how Blockchain technology further augments fashion value chain capabilities that help to deliver better outcomes.

Fashion Value Chain Capability Building with Blockchain:

Blockchain technology can provide consumers visibility into the entire fashion lifecycle of a garment, including materials and vendors used, the labor sources, and even the production, shipping and warehouse locations involved. Everyone from the farmer to the textile mill to the garment factory can communicate directly with the brand that buys from them. As well, consumers can interact directly with the brand/design house for co-creation or customization of the garments, influencing pricing and even co-investing in the concept. I can all out the following to articulate how Blockchain is augmenting fashion industry capabilities,

  • Create new levels of trust among Suppliers, Brands, and Customers
  • Design better PRODUCT, Offer improved SERVICE and Tell a unique STORY
  • Transform Apparel companies to Fashion Conglomerates

Delivering Better Outcomes with Fashion Blockchain:

Global companies like Patagonia and Everlane have been successfully betting on sustainability and supply chain transparency as a distinct selling proposition enabling customers to identify their suppliers. How Blockchain is delivering better fashion outcomes is summarized below.

  1. Enabling sustainability and circular economy: Blockchain is boosting fair trade practices offering consumers’ increasingly demanding transparency and allowing them to know where the fashion product is coming from.
  2. Better Traceability and Transparency: Blockchain enables fashion companies to communicate with the customers the complete product story (DNA) for each and every fashion garment. This includes comprehensive details on all stages of product life cycle starting from design inspiration, raw materials, manufacturing and distribution to the stores and also providing visibility of all stakeholders involved in the value chain to create traceability and transparency in true sense.
  3. Improved Experience & Goodwill: Blockchain applications allow customers to scan the tag and discover the history of every garment and thus help in improving the customer buying experience. Blockchain applications also can help fashion companies who license their trademarks or designs in tracking the sales and working out the royalty payments. As well, it enables design houses to document process steps and thus having the organic evidence of ownership on the designs.
  4. Brand Authenticity:  Fashion products can be verified by both retailers and consumers since branded garments pass through the blockchain steps and hence can be tracked. This could help to reduce the counterfeiting and diverting out of authentic products. Every time a fashion item moves from one place to other, its tag or code gets scanned thus recording its location with the time stamp. Consumers would be able to scan the item and trace its journey from raw material stage to their home and would be able to ascertain if the product is real or a counterfeit. Blockchain applications can help provide protection against the counterfeiting.

Fashion Blockchain Use Cases:

Blockchain is creating enough traction in the Fashion industry and successful use cases are increasing day by day. Here are few use cases of interest,

  • VeChain solution to tackle the fraud and ensure anti-counterfeiting of fashion products.  It provides a company’s product with a QR code or smart chip with its own unique ID. The company embeds the code, or chip, in its products, scans it, and stores it on the blockchain. The company can then track the product along with each phase of its life cycle: from its creation to the consumer. The blockchain is tamper proof. Consumers will know when they purchase that they are purchasing the original, authentic product.
  • Fashion Coin (FSHN) is a peer-2-peer version of electronic cash for Generation Z. Based on creativity, game theory and steganography+cryptography, Fashion Coin provides seamless and effortless online payments  – with maximum speed and limitless scale.
  • LUKSO is an open blockchain ecosystem specifically created for the fashion and lifestyle industry, providing a decentralized innovation and trust infrastructure for fashion brands, start-ups, and customers. The LUKSO architecture encourages its users to design and deploy an infinite number of innovative features for the modern fashion system: it opens up digital wardrobes and sharing economies, secures IP rights and authenticity, enables omnichannel communications and novel ways of funding collections.
  • faizod is currently paving the way in this area, working together with a logistics company to pioneer a prototype of such a Blockchain-based tracking system. The prototype pairs Blockchain with radio frequency identification (RFID), which uses radio waves to transmit information to a reader.
  • Provenance is increasing the transparency in the fashion supply chain by tracking the journey of raw material through the supply chain, this collaboration between fashion designer Martine Jarlgaard and Provenance highlights the role of blockchain technology in increasing transparency and substantiating claims in the fashion industry.

Given all the advantages, blockchain clearly seems to be the future for fashion, however, to speed up the application, a single and comprehensive blockchain standard adopted by the fashion industry has to come in fast.

Life Reimagined with Seamless Travel Experience

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Reimagining life in every aspect and bouncing ideas that create better experiences is the motto of this blog page. As per the AARP research in 2018, 57% of leisure travelers like to spend time with family and friends, 49% want to relax and rejuvenate, and 47% try to get away from routine stressed life. But the real-life experience of travelers is just the opposite of these expectations. Solutions that offer seamless travel experiences is the need of the day for better leisure outcomes. The ideal travel experience of current generation passengers would include:

  • Real-time journey information delivered to their personal devices
  • Biometric identification to facilitate their travel processes
  • Automation of more airport processes
  • Wait times of less than 10 minutes at security/immigration
  • Bags tracked throughout their journey
  • A human touch when things go wrong

What if a passenger arriving at security and immigration checkpoints has been previously vetted at check-in allowing a seamless, contactless process where the passenger simply needs to look at a smart camera to be cleared and allowed passage? Offering universal travel pass integrating cross-border security checks, hotel check-ins and entire travel life cycle tied with digital identity should be the new mantra of the travel industry.

Such universal travel passes will create a newfound demand for travel consultants to be more integrated with various service providers, making it a lucrative profession. Each traveler will be assigned a passenger record name/record locator so that all the services they opt for will be availed and kept secure, and the travel consultants will be the integral component of providing this.

Seamless universal travel experience is a great value to the travelers. And such a seamless travel experience is becoming a reality with new digital technologies. These technologies can enable travel agencies to transform into ‘digital travel agents’, enabling the booking process to become a trip planning experience, where agents will be able to provide more content, information and booking details. The congruence of technologies like IoT, Cloud, AI, Voice-Enabled Devices, Blockchain, and 5G has the potential to offer better experiences to travelers. As tourism continues to grow and route availability continues to shrink, airports are turning to seamless travel initiatives to help passengers stay on the move and increase their satisfaction.

The dominant technologies enabling seamless universal travel experience include,

  • Internet of Things: IoT can create a seamless trip where travelers are connected to their travel agents at every stage. IoT has the ability to connect customers with travel consultation throughout the entire lifecycle of the travel experience. For agents, a global or universal passenger record can allow travel consulting to change according to any requests from the customer. As for travelers, agents can provide a universal ‘travel pass’ that can be used for a trip, without separate boarding passes, hotel check-in, bus passes, and even theme park tickets. This universal travel pass would also handle multiple currencies, where travelers won’t need to worry about exchanging currencies when traveling between different countries.
  • Cloud – Improves the collaboration with travelers for a more personal experience transforming the offline model of the travel agent to have access to all cloud-based bookings regardless of location
  • AI and voice-enabled devices – AI has the potential to transform the inevitable hassles and inconvenience of airport travel into delightful passenger experiences. AI could enable travelers can leave their home with one single biometric identifier – and board a plane or cruise, check into their hotel, and hire a car with that unique identifier. Acuity Market Intelligence forecasts that the total number of airport biometric touchpoints – increasingly AI-enhanced facial recognition – at check-in, bag drop, security, and boarding gates will increase at a 27% CAGR from 2019 – 2022. Voice will be the future of booking travel. Travel agents are then able to take advantage of this and sell high value and high engagement products via voice
  • Blockchain – Blockchain technology could develop a ticket-booking solution that integrates multiple agencies – long-distance, regional,  and local agents, including Uber/Lyft car- or any other car-sharing firms. With a blockchain-based solution, travelers can book their travel with agents participating in the network with just a few clicks on a single website, without the need to switch across multiple sites and providers. The blockchain ledger can then record single customer purchase and even accurately can split the payment among the providers.
  • 5G network high speeds – 5G will give agents a better way to connect with travelers during their trips. If the traveler has a 5G connection, that allows the agent to be able to have a better video call with the traveler, without physically being there with them, assisting them along the way. 5G combining with VR/AR technologies offers a more engaging and immersive booking experience

Travel & Tourism sector should embrace the change creating a mass personalization contextualized to the travelers and leveraging ecosystem working with all stakeholders involved to maximize value leveraging biometrics and universal digital identity for truly seamless passenger experience.

Future of Financial Services Workforce

UntitledFinTech disruptors have been finding a way in by focusing on a particular innovative technology or process in everything from mobile payments to insurance. A forte of technologies “AI-ML-DL-NLP-CV” is fueling the FinTech innovations. The large financial services companies can’t be complacent as FinTechs have been attacking some of the most profitable elements of the value chain and as well as areas which were historically subsidized.

Let us refresh our memory on these AI technologies and their relevance to the financial services industry.

  • AI makes machines to learn from experience and perform human-like tasks – AI offers robotic & intelligent process automation (RPA/IPA) of financial processes
  • ML is a specific subset of AI that trains a machine on how to learn – ML is enabling algorithmic trading lead to better predictability and decisions around credit and consumer lending, thereby lowering risk to the bank or financial institution
  • DL is s a type of ML that trains a computer to perform human-like tasks, such as identifying images – leverage big data (customer demographics, consumption records, etc.) to parameterize a DL model that can simulate the likely response to new product/service configurations (e.g. new credit card with cash rewards, moderate interest, zero interest on balance transfers, etc.)
  • NLP is a branch of AI that helps computers understand, interpret and manipulate human language – NLP is shaping the future of banking with voice assistants and ubiquitous computing.
  • CV s a field of AI that trains computers to interpret and better understand the visual world –  CV is transforming financial services by using appealing visuals and new solutions for a new world where seeing is believing

These new-age FinTech developments are leading to a continuous transformation of the financial services workforce. The changing landscape and evolving financial services resource pyramid is presented in the diagram above. I would like to highlight a few trends reshaping the talent of financial services on this blog post.

  • AI automating business-as-usual activities of financial services: Robots and AI already started addressing key pressure points, reduce costs and mitigate risks. Building capabilities to target a specific combination of capabilities such as social and emotional intelligence, natural language processing, logical reasoning, identification of patterns and self-supervised learning, physical sensors, mobility, navigation and more are in swing. The goal is to look far beyond replacing the bank teller. There are whole categories of work that had not been seen as cost effective to automate. However, with lightweight software ‘bots’, workers are freed up to focus on higher value activities.
  • Changing patterns with Human vs Machines foray: Are financial services firms moving to re-shoring of work with talented machines? The answer seems to be, Yes. In the last two decades, many financial firms have ‘offshored’ repetitive tasks to lower-cost locations such as India, China, and Poland. However, relative costs for labor in those regions have started to rise. Combine this with improvements in robotics and AI capabilities and machines are becoming credible substitutes for many human workers. As the capabilities continue to improve and technology continues to drive down the cost of machines, these forces will combine to spur re-shoring, as more tasks can now be performed at a competitive cost on-shore. Even functions that seem dependent on human input, such as product design, fraud prevention, and underwriting, will be affected. At the same time, the need for software engineering talent will continue to expand
  • It is not just automation, Technology is picking high-end work: ML is enabling next-generation algorithmic trading systems are moving from descriptive and predictive to prescriptive analysis, improving their ability to anticipate and respond to emerging trends. And while algorithm trading programs were once limited to hedge funds and institutional investors, private investors can now get access to them too. AI soon automate a considerable amount of underwriting, especially in mature markets where data is readily available. Even in situations where AI does not completely replace an underwriter, greater automation would allow humans to concentrate on assessing and pricing risks in the less data-rich emerging markets. It would also free up underwriters to provide more risk management, product development advice and other higher value support for clients.
  • While building machines, the real focus is on accessing the necessary talent and skills to execute strategies and win markets: Financial services firms lack the internal knowledge and expertise need to implement a customer-centric approach. For example, a mainframe programmer who maintains a core banking platform may not have the skills or interests to learn to code AI applications. Many senior IT executives, non-IT staff-members, and even technical personnel do not have the skills needed to build and operate an effective digital channel offering. Financial institutions are starting to realize they will need talent with very different skills. This might mean finding more industrial engineers for robotics work, or retraining underwriters to do higher value work once AI is used to automate certain existing functions. But the issue runs deeper than developing a different competency model. First, firms to understand what is already working and what needs to be done differently. This might involve changes across the human capital strategy through revitalized recruitment, learning and development, partnering and cultural initiatives.
  • The contingent workforce is creating the talent-exchange mindset: financial firms need to address is the growing preference for flexibility and entrepreneurship among many in the labor force. In the United States, the US Chamber of Commerce has found that 27% of the labor force is currently self-employed, and some believe that this ‘contingent workforce’ could rise to 40% or more within several years. Practically, for this reason alone, financial institutions will need to adopt a ‘talent exchange’ mindset, leveraging part-time and/or self-employed individuals in a creative manner. This may range from bidding out specific tasks or work to expanding the use of seasonal or temporary workers. Of course, this will introduce challenges around culture and quality, and this will introduce new opportunities as well. For example, we might see employers using online platforms to manage confidentiality and legal risks in creative ways.

Artificial Intelligence capabilities impacting the financial industry and thereby attitudes toward work continue to change, some of the attributes that have benefitted institutions in the past such as big firm and stable employment are slowly losing their appeal. Refreshing financial firm’s approach to recruiting, learning and development, and culture may offer an effective way to address issues that FinTech has brought into the open market.

Welcome your ideas in further spotting future trends in financial services workforce.