Financial technology – or FinTech – is the latest buzz in banking, both for customers and for bankers themselves. To the latter, it means handing over some jobs to machines. There’s a long history to this, from tellers being usurped by cash machines, clerks giving way to spreadsheets and security guards yielding to cameras and motion detectors. Opinions collide as to whether FinTech is fundamentally different to previous waves of automation, but this much is sure: future banks will include a few cyborgs.

WealthTech, made in Switzerland
So-called ‘robo-advisors’ are software programs that pick investments and design portfolios according to client criteria such as age, tax status and risk appetite. Here in Switzerland, many banks – Julius Baer included – have brought them onboard. In most cases this is a ‘hybrid’ hire: the robo-advisor feeds ideas to a human banker, who then can share them further (or not) with customers. WealthTech in this case is still an assistant, not a principal.

Some providers are going all in, fully robo. For instance, Truewealth.ch automatically builds a portfolio for customers who have filled out a 10-minute survey. Truewealth’s 2013 startup as Switzerland’s first WealthTech triggered a stampede. According to the ‘Swiss FinTech Start-up Map’, companies such as Fundbase, Investment Navigator, Qontis, Simplewealth and 53 others have entered the field.

RiskTech
A bank account here, a mortgage there, a credit card in the wallet, life insurance in one folder, car insurance in another – and that’s just a household’s finances. Multiply a few billion times over, add complexity and massive transactions, and you can see why banks need a risk-management system. It’s a hyper-version of reminding one hand what the other hand is doing, expanded to millions of hands.

Traditionally this was done in-house, but money managers increasingly are turning to third-party RiskTech software such as Aladdin, Dimension or HiddenLevers that continually calculate how far they are out on a limb. RiskTechs also ‘stresstest’ portfolios individually and collectively, to see if they can ride out interest-rate hikes, Brexit, Grexit, hurricanes, oil-price crashes and literally millions of other scenarios. Over time, what started as RiskTech has expanded into ‘end-to-end’ software that manages analysis, trading, portfolios and even regulatory reporting – pretty much everything a bank does in operations.

StrategyTech
So what about the step from ‘pretty much’ to ‘absolutely’ everything? That territory is targeted by artificial intelligence (AI). Artificial is the right word, because these programs work not by thinking like humans, but like chess-playing supercomputers: by brute-force manipulation of massive datasets. Software from companies such as Ayasdi, Kensho and (Swiss-based) Predictive Layer ‘machine read’ through millions of documents to compare anything to everything – the price of tea in China to the frequency of sunspots to the conference-affiliation of Super Bowl champions to, oh, the performance of assets. Kensho told Forbes that it uses a Google-style search interface to answer questions such as: Which cement stocks go up the most when a hurricane hits the US Gulf Coast? Or, what assets perform best when the war in Syria worsens? Humans can answer these – with many days and dollars – whereas Kensho comes back in minutes.

Kensho’s CEO Danial Nadler told Bloomberg TV that all this intelligence doesn’t (yet) equal that of humans. “It’s still up to people to decide what to do with the information.” FinTech expert Jesse McWaters of the World Economic Forum agrees, noting that AI will not eliminate analysts, yet it will change how they analyse. “In future it will be less important for analysts to crunch the numbers as it will be for them to know what questions to ask the AI, and how to interpret and use the AI’s results.”

WorkTech, or how to win friends and influence robots
Should bankers be clearing their desks to make way for all this tech? Yes, employment losses will be severe, say voices as prominent as Kensho’s Nadler, Bank of England Governor Mark Carney and the World Economic Forum (the latter in a 2016 report ‘The Future of Jobs’). No, say other experts – such as WEF’s McWaters – who counter that different (human) jobs will be created.

While it’s too early to tell if the plus or the minus will prevail, in future we’ll clearly see more computers wearing green eyeshades. And we’ll see people teaching computers to act, well, more human. One nascent profession, according to a recent study by consultancy Accenture, will be that of ‘automation ethicist’. In plainer words, that’ll be keeping robots from stepping on human sensibilities.