Monday, February 26, 2024

Westpac’s CTO on the ten largest tech tendencies forward

From cryptocurrencies to ChatGPT, digital and tech had been headline information in 2022. That’s unlikely to alter within the yr forward, though inevitably we are going to see the hype fade on some improvements to get replaced by the most recent shiny new factor.

The one fixed that transcends the information cycle is the relentless tempo of technological change, and new developments will proceed to emerge which have the potential to rework the way in which we dwell and work.

Right here’s my listing of the highest tendencies in expertise to be careful for in 2023, with a selected nod to how they might influence the banking sector.

1. ChatGPT, overhyped?

Using synthetic intelligence to generate textual content, audio and visible content material has hit the mainstream with the arrival of ChatGPT.

Developed by OpenAI, with Microsoft as a significant investor, it’s capability to synthesise large quantities of textual content makes it probably the most skilled language fashions ever created. But it nonetheless has entry to solely a small portion of human data (as a result of plenty of data is non-linguistic), and, consultants argue, has no human-level understanding of ideas. In consequence, ChatGPT generally writes reasonable-sounding, however incorrect, solutions.

With its potential to drive the price of producing believable textual content to close zero, the hazard is that we gained’t know what to belief. However used successfully, the underlying expertise has the power to additional open up the acceptance of conversational interfaces and carry private and company productiveness.

So, is ChatGPT overhyped? The brief reply is sure, for now, however generative AI is prone to be transformative. Because the fanfare that surrounds ChatGPT begins to die down, this class of AI ought to discover its area of interest in sure job capabilities and industries.

For banks, generative AI affords many prospects, from writing software program and drafting insurance policies, to utilizing language to interface with functions and knowledge.

2. Metaverse hype to fade

To date, the metaverse has struggled to dwell as much as the hype.

Whereas walled metaverses, such because the vastly in style ‘Fortnite’ recreation, proceed to do properly, we’ve not seen any materials progress on an immersive digital-twin internet-like setting.
This yr, I anticipate customers to recognise the continuing problem to beat the constraints of realism.

We’ll proceed to see area of interest areas develop, notably coaching eventualities that profit from full immersion, modelling, and visualisation (for instance in defence, aerospace, manufacturing, and healthcare). Immersive expertise may improve distant collaboration, and for banks that can open up alternatives to remotely join with their prospects.

3. Blockchain takes successful

The scandals, failures and market collapses that beset the cryptocurrency world in 2022 have dealt a reputational blow to the crypto aspect of blockchain expertise.

Regardless of the hit, there have been small advances in company area of interest blockchain use circumstances – for instance, in decentralised finance for wholesale funding markets, as superior by banks like JP Morgan, DBS, and Citibank. We are going to see additional developments in blockchain to reinforce digital identification, funds, and good contracts.

This yr, regulators will construct resiliency by establishing authorized frameworks to guard residents, whereas central banks will proceed to discover the event of their very own digital currencies.

For banks, blockchain applied sciences have potential to drive efficiencies in areas like cross-border funds, commerce financing, collateral administration, settlements, carbon credit score, and loyalty.

4. A brand new house race

Low Earth Orbit (LEO) satellites, whereas comparatively properly established, have been touted as the brand new most well-liked technique of communication transmission in house, and this yr we might see smartphones connecting on to satellites at close to 5G speeds.

Tech giants Apple, Amazon, and SpaceX, have all been spending huge to accumulate and launch satellites as a way to enhance the pace, safety and high quality of communications.

As web protection in rural and regional improves with the proliferation of LEO satellites, banks will be capable of lengthen their digital providers to prospects who’ve beforehand been extra reliant on distant branches, lifting monetary inclusion and equity for all.

5. Laptop chip scarcity to proceed

After the COVID-19 pushed world laptop chip scarcity (from which we nonetheless haven’t totally recovered), an ‘east vs. west’ chip conflict is now properly underway. The US and China are battling over semiconductors, which are present in virtually each digital machine we use right this moment.

Each international locations will proceed to put money into their home chip-making industries, however these will take years to develop. Within the meantime, tensions will proceed to influence world provide and demand, particularly high-end chips, impacting advances in chip structure.

6. Rise of the platform

We’ve seen a shift from organisations working initiatives to constructing merchandise, to now working platforms. These platforms are assembled from elements which are supported by industry-specific cloud-based capabilities.

We’ll proceed to see a number of the extra superior and succesful corporations provide their expertise as a platform at an {industry} stage. For instance, Goldman Sachs affords an information and analytical platform to different monetary establishments, and Westpac has launched a bank-as-a-service (BaaS) platform for third get together companions.

7. Ransomware is a draw

The pattern of ransomware funds is down as corporations have grow to be higher at securing their knowledge via protected back-ups.

Nonetheless, the battle is just not but gained and organisations of all sizes will proceed to extend funding to arrange for various kinds of ransomware assaults. It will likely be a precedence to speed up the migration of functions, knowledge, and providers to the cloud. Stronger insurance policies in any respect ranges, from authorities to corporations, will increase cyber expertise safety and defences.

Banks are on the forefront of ransomware defences, bringing in new prevention, detection, and restoration strategies. Educating the group, prospects, and their very own workforces on safety precautions will proceed to be necessary, together with cross authorities and {industry} collaboration.

8. Hybrid work right here to remain

With the hybrid office mannequin more and more seen because the ‘new regular’, corporations want to use the teachings discovered over the past 3 years. Which means higher communication, flexibility, and agility to advertise a wholesome work-life stability. The most effective corporations will use this to distinguish themselves.

The strain between the ‘autonomous’ and ‘office-only’ staff will rise as corporations lengthen hybrid tradition to construct significant and efficient new methods of working. Focus will improve on work-from-anywhere {hardware} and functions; safety and cyber safety; connection, communication, and collaboration instruments; productiveness and workspace analytics; and collaborative house over particular person workspaces.

9. Expertise for good

The tech sector is waking as much as its influence on the setting. It’s estimated that knowledge centres devour about 3 per cent of the worldwide electrical provide and account for about 2 per cent of complete greenhouse fuel emissions – that’s equal to the emissions generated by the industrial aviation {industry}.

Cloud computing giants like AWS and Microsoft Azure are aggressively investing in sustainable operations and supply, aspiring to finally obtain web zero emissions inside the decade, or sooner.

Firms pays extra consideration to their sustainable practices, together with supporting renewable power initiatives and inexperienced infrastructure, bettering knowledge transparency, addressing biases and entry requirements, and guaranteeing their computing panorama is environment friendly.

We’ll see governments and regulators changing into extra lively in firm oversight throughout a variety of moral expertise areas. Banks will, like most corporations, have to recognise the altering expectations of the group and put in place measures to fulfill these requirements.

10. Engineering mass migration

As the large tech companies proceed to layoff extremely expert technologists, they’ll feed into corporations which are trying to find tech expertise.

Over the past 40-plus years, cyclical change has been the norm for the {industry}, whereas the layoffs we’re seeing now are largely a correction from the aggressive hiring in the course of the pandemic.

This can present a chance for start-ups and firms in different industries, together with banking and finance, to snap up technologists which were briefly provide.

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