At a recent conference I attended, many people agreed with the proposition that financial education is sorely lacking in all parts of the world. Part of the problem is that even if everyone had advanced degrees in the topic, there would still be unknown aspects. The space is simply too large! One of the practical consequences of this large space is that many of us freeze when confronted with it. Nervous about making the wrong choice, we choose to make no choice at all!
Artificial intelligence might bridge the gap for us. Since artificial intelligence works best with huge amounts of data, the large numbers of different financial services, products, fees, rates, and so on stops being a barrier and starts to be useful. We have successfully used artificial intelligence to optimize the performance of complex systems for many years now.
Practically speaking, this move to AI could be very simple or quite complex. Simple AI assistance might help choose which card to use to pay in order to maximize rewards and minimize fees. Complex AI assistance might eventually negotiate a new mortgage or making investments on our behalf.
One of the large, overarching themes of the MoneyNext Summit conference was open banking. In the same way that open data in government is currently remaking our cities, open data in banking is poised to remake financial services. Both enable automation, provide greater insights, and create efficiencies,
The utopian dream, then, is to provide open data to and about our financial systems. Artificial intelligence could then comb through the data and compare options across thousands of different products. It could even offer optimized suggestions for each person's financial story. Or better yet, it could do the work completely, making banking invisible to the end user as suggested by one of the panellists.
Curve is a great example of applying open financial data to move in exactly this direction. Curve isn't a bank. Rather, it uses the customer's current banks' credit and debit cards to create an entirely new experience. Every card connected to Curve suddenly supports contactless payment because using the Curve card to pay, you can choose which card to use. Even more strangely, after paying with one card, you can go back and choose to pay with a different card. And the app can suggest which card to use for certain purchases to maximize rewards, or minimize fees. When you're traveling, you don't worry about exchange rates because you pay like a local. And on the backend, there are low fees for changing money.
We are in a place in history where we are rapidly moving from physical to digital financial services. From this vantage point it is possible to imagine a world where banking is invisible.