# Quantum Leap: How will banks cope with tomorrow’s tech?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-05-29
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: The Future of Banking: AI, ML and Quantum Computing
Meta Description: Explore how AI and ML are reshaping the banking industry, creating efficiencies and personalised experiences. Discover the challenges and opportunities ahead.
URL: https://financedigest.com/quantum-leap-how-will-banks-cope-with-tomorrows-techhtml

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_By **Elina Mattila**, Executive Director, Mobey Forum_

Last century, one of most dramatic changes to the banking ecosystem was the integration of digital technology, both with back office and customer-facing systems. Today, we are entering a whole new phase. Customer demographics are shifting as technologies evolve, giving rise to a digitised market dynamic and a new playground for financial services, one that offers challenges and opportunities for [banks and financial institutions that didn’t exist just a few years](https://www.financedigest.com/four-years-of-open-banking-2022-may-be-the-best-year-yet.html "Four years of Open Banking: 2022 may be the best year yet ") ago.

**These are the droids you’re looking for**

![Elina Mattila](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/elina-mattila-1736842692958-compressed.jpg)

Elina Mattila

[Artificial intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-magazine.html "Artificial Intelligence in Banking Magazine") (AI) and machine learning (ML) are creating huge efficiencies for banks and consumers alike.

Conversational AI chatbots and voice assistants, for example, are emerging as a popular way to deliver rapid, personalised customer [service experiences](https://www.financedigest.com/personalizing-the-workforce-experience-in-financial-services.html "Personalizing the Workforce Experience in Financial Services") at scale. And the use-cases go way beyond basic customer support. With technologies advancing, these chatbots and assistants can act as [personal finance](https://www.financedigest.com/six-ways-to-prepare-for-a-personal-finance-crisis.html "Six ways to prepare for a personal finance crisis") advisors to help end-users manage their money, or pay bills with a simple command.

As AI becomes increasingly pervasive, [banks need](https://www.financedigest.com/change-is-inevitable-how-banks-need-to-adapt-to-customers-new-banking-habits.html "Change is inevitable – how banks need to adapt to customers’ new banking habits") to find the right balance between ease and experience.

Sometimes a customer wants a quick answer and a quicker fix. There are certain situations though, when considerable expertise, empathy and tact are required. Here, human interaction is the best approach.

But with [technology now able to effectively](https://www.financedigest.com/negative-effects-of-technology.html "Negative effects of technology") mimic human speech patterns, it will become harder to draw a clear line between people and robots.1 The question is – should consumers know?  Considering these ethical and reputational issues will be a priority for [banks as AI becomes integral to the delivery of financial services](https://www.financedigest.com/becoming-more-than-a-bank-adding-value-through-financial-solutions-as-a-service.html "Becoming more than a bank: adding value through financial solutions as-a-service").

**Delivering the personal touch**

AI and ML are also helping banks [move beyond](https://www.financedigest.com/the-high-strength-rtd-malt-beverages-market-to-move-beyond-the-monotony.html "The High Strength Rtd Malt Beverages Market To Move Beyond The Monotony") traditional pre-packaged products and services to forge a more meaningful connection with their consumers.

By using data to truly understand [consumer behaviour](https://www.financedigest.com/from-in-store-to-online-how-the-pandemic-affected-consumer-behaviour.html "From in Store to Online: How the Pandemic affected Consumer Behaviour"), banks can create products that are, well, better than those we have today. More flexible. More relevant. More equipped to help us reconcile our spending habits with our longer-term financial ambitions.

[Among younger consumers](https://www.financedigest.com/epi-how-to-build-trust-and-adoption-among-consumers-and-merchants.html "EPI: How to build trust and adoption among consumers and merchants"), who are increasingly wary of credit, for example, platforms that encourage savings, investment and financial-planning will resonate more than those that simply promote additional spending. [Banks benefit](https://www.financedigest.com/online-banking-benefits-and-risks-of-managing-your-finances-online.html "Online banking: benefits and risks of managing your finances online") too, as it keeps product portfolios relevant and allows resources to be distributed effectively and efficiently.

**A Quantum** **of Solace for banks**

To remain [competitive in the long-term and deliver truly personalised experiences and services](https://www.financedigest.com/uk-says-baker-hughes-altus-deal-may-hurt-competition-in-oil-well-services.html "UK says Baker Hughes-Altus deal may hurt competition in oil well services"), continually improving data quality and using smarter tools is key.

Enter [quantum computers](https://www.financedigest.com/quantum-computing-in-finance-the-next-digital-arms-race.html "Quantum Computing in Finance: The Next Digital Arms Race?"), which have the potential to completely revolutionise AI, ML and data modelling.

It’s [reported that quantum computers can be up to 100m times](https://www.financedigest.com/credit-suisse-executives-reassure-investors-after-cds-spike-financial-times-reports.html "Credit Suisse executives reassure investors after CDS spike, Financial Times reports") more powerful than traditional computers.2 Such power could allow [banks to deliver AI services and applications that are simply beyond our reach today](https://www.financedigest.com/stress-testing-why-did-my-bank-go-bust-today.html "STRESS-TESTING – WHY DID MY BANK GO BUST TODAY? "), and incorporate critical thinking, creativity and intuition.

Of course, it is hard to [say when the first commercial applications](https://www.financedigest.com/high-barrier-packaging-films-for-pharmaceuticals-market-set-for-5-cagr-through-2029-blisters-remain-top-application-area-says-a-new-fmi-report.html "High Barrier Packaging Films for Pharmaceuticals Market Set for 5% CAGR Through 2029; Blisters Remain Top Application Area, Says a New FMI Report") of quantum computers will become viable. Harder still is to [predict what the quantum future](https://www.financedigest.com/covid-19-impact-on-attitude-and-heading-reference-systems-market-volume-analysis-future-prediction-industry-overview-and-forecast-2028.html "Covid-19 Impact On Attitude and Heading Reference Systems Market | Volume, Analysis, Future Prediction, Industry Overview And Forecast 2028") will look like, not only for banks, but for society as a whole. The prospect of such overwhelming change makes it critical that banks and financial institutions come together now to [explore future opportunities](https://www.financedigest.com/fish-protein-market-exploring-future-growth-2021-2031-opportunities-development.html "Fish Protein Market Exploring Future Growth 2021-2031 | Opportunities & Development") and negotiate potential challenges.

**The Bank of GAFAMAT?**

Looking into the more immediate future, Google, Amazon, Facebook, Apple, Microsoft, [Alibaba and Tencent](https://www.financedigest.com/china-regulator-says-alibaba-tencent-have-submitted-app-algorithm-details.html "China regulator says Alibaba, Tencent have submitted app algorithm details") – the major technology titans collectively (and clunkily) known as GAFAMAT – have recently poured huge investments into financial services.

Many see the ‘Bank of GAFAMAT’ as the [next logical step](https://www.financedigest.com/open-finance-the-next-step-for-global-digital-transformation.html "Open finance – the next step for global digital transformation"). Changing consumer behaviour, particularly among [younger generations](https://www.financedigest.com/british-monarchys-fashion-mantle-passes-to-younger-generation.html "British monarchy’s fashion mantle passes to younger generation"), is a key driver. 36% of all [consumers would consider switching to a GAFAMAT bank](https://www.financedigest.com/the-new-wave-of-consumer-friendly-banking.html "The new wave of consumer-friendly banking"). 50% of those are aged between 25 and 34.3

Where does this [leave banks](https://www.financedigest.com/societe-generale-says-two-senior-executives-to-leave-bank.html "Societe Generale says two senior executives to leave bank")? Given the impact of GAFAMAT in other sectors, there is an understandable wariness in some quarters.

In the [open banking era](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration"), however, GAFAMAT should not be seen as an existential threat, but rather an opportunity to deepen customer engagement and establish stronger bonds with younger consumers that associate more readily with platforms, not institutions. Indeed, GAFAMAT can be a [powerful channel for banks](https://www.financedigest.com/analysis-powerful-swiss-central-bank-faces-reform-calls-in-wake-of-credit-suisse-rescue.html "Analysis-Powerful Swiss central bank faces reform calls in wake of Credit Suisse rescue") to leverage through symbiotic partnerships, integration and collaboration.

**The road ahead**

The dialogue surrounding the impact of these disruptive [trends and technologies for the banking](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") ecosystem is evolving fast. For [banks](https://www.financedigest.com/stellantis-reshuffles-european-financing-operations-through-new-jvs-with-banks.html "Stellantis reshuffles European financing operations through new JVs with banks") and financial institutions, standing still is simply not an option.  This is why platforms like [Mobey Day Toronto](https://www.mobeyforum.org/mobey-day/) are so important, enabling close and collaborative discussion on how AI, robotics and changing spending habits are shaping the future of financial services.

\[1\] [https://www.theguardian.com/technology/2018/may/08/google-duplex-assistant-phone-calls-robot-human](https://www.theguardian.com/technology/2018/may/08/google-duplex-assistant-phone-calls-robot-human)
\[2\] [https://thefinanser.com/2018/03/banker-march-quantum-will-change-everything-including-banking-money-security.html/](https://thefinanser.com/2018/03/banker-march-quantum-will-change-everything-including-banking-money-security.html/)
\[3\]https://www.intelligentenvironments.com/will-gafa-next-bank/


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