Today, any user can carry out multiple financial transactions over the Internet: from opening an account, to investing in stock, to paying bills or making a transfer. In fact, the number of users who use online banking services in Spain has not stopped growing, according to Statista. While in 2008 only 18% of clients made use of this type of banking, that figure rose to 49% in 2018. In the case of BBVA, more than half of its customers worldwide already use banking services on their mobile devices.
Ignacio Boixo, member of the Consejo General de Colegios Profesionales de Ingeniería Informática (General Council of Professional Engineering and Computing Schools), highlights that savings and investment models are becoming increasingly diversified. “Banks have begun to offer a whole range of fintech services supported by secure communication models that have been deployed in a wide range of areas, such as payments, financial statements, portfolio management, or algorithmic trading,” he says. While the number of services offered is predicted to increase even further in the coming years, different technologies are expected to mark the future of the banking sector.
The 5G network
“The 5G communication model follows the general trend of offshoring. In the coming years, investments in this technology will be substantial, as it is fully in line with the current development of companies,” explains the computing engineer. 5G will offer more than ten times the speed of 4G and will allow a greater number of devices to connect to each areal unit at once and a decrease in delay.
Different countries such as Spain, Japan, China, the United Kingdom, Italy and the United States have started to roll out this technology this year. There are also multiple projects under way. BBVA has deployed a telecommunications infrastructure, together with Telefónica, at its Madrid headquarters, making it one of the first business sites in Europe to have 5G dedicated coverage.
Over the next few years, implementing such networks in banking will improve customer experience and allow real-time information processing by making communications more secure. 5G is expected to bring with it new ways of introducing products and services to end users—for example, through virtual or augmented reality—and improve the bank’s applications and infrastructure so that, with greater capacity, it can perform more powerful data analysis or handle higher volumes of information.
In 2019 we also started to see the first promises of quantum computing come to fruition. In October Google published a finding in the scientific journal Nature that would be the first empirical demonstration of the concept of quantum supremacy—the ability to perform a task on a quantum computer using fewer resources than on a classic computer. Other companies such as IBM, Microsoft, Honeywell, Rigetti Computing, IonQ, Intel and NTT are also exploring this field.
For Boixo, the main limitation for making progress in this field is the hardware. “The current qubits depend on quantum entanglements that are currently only technologically viable at very low temperatures, very close to absolute zero, and are highly prone to errors,” he says. In addition, the quantum computers available to researchers are only capable of testing algorithms for small problems. This is expected to change in the coming years and quantum computing is expected to have a strong impact on industries such as manufacturing, pharmaceuticals and banking.
“Those who invest in talent and research in quantum computing today, will be those who will be able to reap the benefits and rewards that this technology will bring”
BBVA’s Escolástico Sánchez, leader of the Research and Development discipline in New Digital Businesses (NDB), explains that developments in this technology over the next decade will have a major impact on the financial sector: “It will have a tremendous impact: in the field of communications, cybersecurity, detection equipment, Internet function, supply chain logistics, scientific exploration, and, of course, finance.” According to the expert, these advances will also have an effect on traditional computer science, and consequently, the way people interact digitally will change due to the new quantum paradigm. “Of course, by then we will also have created the hardware necessary to harness the potential of this technology. Those who invest in talent and research in this field today, will be those who will be able to reap the benefits and rewards that this technology will bring,” he adds.
Both enterprises and public companies find themselves in a period of exploration to determine the potential of blockchain, to understand its limits and to delimit the regulatory spaces in which it can operate. Blockchain is a database where all users have a copy of the entire chain. In other words, it is an unchangeable logbook that contains the complete history of all transactions that have occurred on the network.
In the coming years, it is expected that this technology, which decentralizes management and removes intermediaries from any transaction, will allow banking operations to be carried out faster and more securely. According to Carlos Kuchkovsky, Head of Research and Development, and Technology, of New Digital Business (NDB), there have been some advances in 2019 that indicate the degree of maturity that some initiatives are reaching in this regard, which could have a big impact on the financial sector over the next 10 years. For example, projects such as Facebook-founded Libra and the digital currencies of central banks have sparked debate and aroused great interest with regulatory organizations.
However, Kuchkovsky states that in 10 years, it is likely that “we will no longer be talking about blockchain as such but about a totally digital society, thanks to the so-called Web 3.0.” In this regard, he emphasizes that developments in open finance, decentralized applications (DApps) and decentralized finance (DeFi), together with blockchain and other exponential technologies, such as the Internet of things and artificial intelligence, “will have a significant and positive impact on how banking can be increasingly inclusive, while at the same time make a larger contribution to sustainability.”
“Blockchain has the potential to end intermediaries in all industries, but above all it can generalize access to financial services and make the transition to a society in which data are not separated into silos a reality. Instead, one where there is a ‘data atmosphere,’ whereby all people can benefit from the potential of artificial intelligence in a fair and trustworthy manner,” he concludes.