Category

Technology

Banking Trends

By | Technology

In its recent 2018 Banking Industry Outlook report, Deloitte identified six key themes that are driving trends for financial institutions today:1

  • Redefining what makes for a positive customer experience
  • Managing a myriad of technology platforms
  • Mitigating cyber risk
  • Adjusting to competition from fintech (financial technology) companies
  • Aligning business strategy with regulatory compliance
  • Reimagining the workforce to incorporate automation

Among these, cyber risk may be the most challenging and distressing for both bank management and their customers. In 2016 alone, more than 60 percent of all security breaches occurred in the financial services industry. However, banks are taking these threats seriously, with more than 85 percent of all financial institutions indicating in a recent survey that they were increasing their cybersecurity budgets.2

One of the weapons financial institutions are using to battle cyber fraud is artificial intelligence (AI). AI is incorporating behavioral science, cybersecurity principles and past experience to notice — in real time — fraudulent transactions.3

One of the biggest issues at the forefront of the banking industry today is the pending rollback of some provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The 2,300-page legislation was passed in the wake of the 2008 financial crisis and was designed to decrease risks in the banking system.4

Presently, there is a bill in Congress designed to exempt dozens of banks from some of the constraints of Dodd-Frank. While the new legislation enjoys bipartisan support, there is ongoing debate as to what provisions should be included.5

 

Content prepared by Kara Stefan Communications.

Deloitte. 2018. “2018 Banking Industry Outlook.” https://www2.deloitte.com/us/en/pages/financial-services/articles/banking-industry-outlook.html. Accessed March 29, 2018.

2 Guarav Sharma. Disruptor Daily. Dec. 21, 2017. “Top 10 Cybersecurity Trends in Financial Services and FinTech.” https://www.disruptordaily.com/top-10-cybersecurity-trends-financial-services-fintech/. Accessed March 29, 2018.

3 Ibid.

4 Investopedia. “Dodd-Frank Wall Street Reform and Consumer Protection Act.” https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp. Accessed April 10, 2018.

5 Sylvan Lane. The Hill. March 25, 2018. “Frustration mounts as Dodd-Frank rollback stalls.” http://thehill.com/policy/finance/380027-frustration-mounts-as-dodd-frank-rollback-stalls. Accessed March 29, 2018.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Innovation Around the World

By | Technology

Digital music service Spotify and the popular electronic games Minecraft and Candy Crush Saga all originated in Sweden. The country is home to some of the world’s largest technology companies and is second only to Silicon Valley for tech giants.1

Sweden provides free health care, free higher education and outstanding infrastructure with the third-fastest internet speeds in the world. Income taxes are high, reaching 60 percent in some cases, but there are experts who believe Swedes enjoy mutual trust with their government — a recognition that it will spend their tax dollars wisely. Furthermore, the social “safety net” of health care and support for small businesses appears to spur a high rate of new entrepreneurs.2

The environment in Sweden is certainly different from the U.S., but that doesn’t mean we can’t replicate some of its more successful elements. On an individual level, for example, having a financial “safety net” may allow us to take more risks — for example, starting a business — which can potentially provide more financial opportunity but also a higher sense of purpose and satisfaction. These components can help each of us live a more fulfilling lifestyle, both before and during retirement. If you’d like help creating a financial strategy designed to put you on the path to meeting your financial goals, please give us a call.

While Sweden is a leader in IT startups, it ranks 7th in the World Economic Forum’s 2017-2018 Global Competitiveness Report for the most innovative economies. Countries ranked in the top six are: Switzerland, U.S., Israel, Finland, Germany and the Netherlands. Japan, Singapore and Denmark round out the top 10.3

There is a big reason that innovation is important at this juncture in history — demographics. We often hear about the “graying” of America, but the situation is further along in Europe.4 With more seniors and fewer people in the workforce, countries may feel a strain on health care systems, pensions and the overall economy.5

Because the aging population is a global issue, several countries are working on innovations to help tackle the problem. For example, China is leading the charge in precision medicine. This is the discipline of screening a person’s genes, living environment and lifestyle factors to help determine which type of drugs and treatment options would work best for their medical conditions.6

Japan, the oldest society in the world, is tackling its demographic challenge in a variety of ways, including the development of robots to help its aging population. For example, researchers have created robots that can help calm dementia patients and aid caregivers.7

 

Content prepared by Kara Stefan Communications.

1 John McKenna. World Economic Forum. Oct. 12, 2017. “Why does Sweden produce so many startups?” https://www.weforum.org/agenda/2017/10/why-does-sweden-produce-so-many-startups/. Accessed Nov. 13, 2017.

2 Ibid.

3 Alex Gray. World Economic Forum. Oct. 11, 2017. “These are the 10 most innovative countries in the world.” https://www.weforum.org/agenda/2017/10/these-are-the-10-most-innovative-countries-in-the-world/. Accessed Nov. 13, 2017.

4 Jeff Desjardins. Business Insider. Nov. 8, 2017. “The populations of Europe and the Americas are aging at an incredibly rapid rate.” http://www.businessinsider.com/animation-how-europe-and-the-americas-are-aging-rapidly-2017-11. Accessed Nov. 13, 2017.

5 H.S. Borji. Investopedia. July 25, 2016. “4 Global Economic Issues of an Aging Population.” https://www.investopedia.com/articles/investing/011216/4-global-economic-issues-aging-population.asp. Accessed Dec. 4, 2017.

6 Genya Dana. World Economic Forum. Nov. 2, 2017. “3 ways China is leading the way in precision medicine.” https://www.weforum.org/agenda/2017/11/3-ways-china-is-leading-the-way-in-precision-medicine. Accessed Nov. 13, 2017.

7 Iain Marlow. The Globe and Mail. Nov. 12, 2017. “Japan’s Bold Steps.” https://www.theglobeandmail.com/globe-investor/retirement/retire-planning/how-japan-is-coping-with-a-rapidly-aging-population/article27259703/. Accessed Dec. 4, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Monetary Systems

By | Technology

In the days before cash, people bartered goods and services. Then we established various forms of “cash” payments, from paper bills and coins to checks, credit and debit card payments. It seems that the more we progress, the less we use physical cash.

Naturally, just because we’re not breaking out a wad of bills doesn’t mean we don’t want to have our assets stored elsewhere – perhaps some of it in savings, some of it in investments and some of it in insurance products. In fact, it’s a good idea to position our assets with the goal of generating several different income streams during retirement. We are happy to sit down with you to evaluate your current assets and design a financial strategy to help you pursue that goal.

The world continues to move in the direction of a more cashless society. In Sweden, digital payments represent as much as 80 percent of all transactions in shops. The country is known for its innovation in technology, and consumers have been quick to embrace and utilize non-cash options with a high degree of confidence.1

Another trend moving us closer to cashless is the growing popularity of cryptocurrencies. This started with bitcoin in 2009, but today there are more than 900 different types of digital cash. They are used to make secure electronic payments for goods and services. And yes, they can increase in value. In March 2017 the value of a bitcoin, at a high of $1,268, exceeded that of an ounce of gold ($1,233) for the first time. However, because of the level of anonymity they offer, cryptocurrencies are unfortunately often connected with illegal activity.2

One of the reasons there is so much innovation in new monetary systems is due to the onslaught of fraud and security breaches in recent years, such as the Equifax data breach. In that situation, the personal data of more than 143 million customers was potentially compromised. The apparent inability to prevent breaches has led to consumers having to freeze credit reports, enact fraud alerts and be more vigilant about monitoring bank and credit card accounts to verify charges.3

Then again, the more sophisticated we become, the more we seem to revert to the “old ways” for security. For example, some states are considering augmenting their electronic voting systems with paper backups.4

 

Content prepared by Kara Stefan Communications.

1Alex Gray. World Economic Forum. Sept. 21, 2017. “Sweden is on its way to becoming a cashless society.” https://www.weforum.org/agenda/2017/09/sweden-becoming-cashless-society/. Accessed Oct. 17, 2017.

2 Cara McGoogan and Matthew Field. The Telegraph. Sept. 27, 2017. “What is cryptocurrency, how does it work and why do we use it?” http://www.telegraph.co.uk/technology/0/cryptocurrency/. Accessed Oct. 17, 2017.

3 Jeff Blyskal. Consumer Reports. Sept. 12, 2017. “How to Lock Down Your Money After the Equifax Breach.” https://www.consumerreports.org/equifax/how-to-lock-down-your-money-after-the-equifax-breach/. Accessed Oct. 17, 2017.

4 Elizabeth Weise. USA Today. Sept. 19, 2017. “Paper ballots are back in vogue thanks to Russian hacking fears.” https://www.usatoday.com/story/tech/news/2017/09/19/russia-hacking-election-fears-prompts-states-to-switch-to-paper-ballots/666020001/. Accessed Oct. 27, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Artificial Intelligence: Innovation for Today’s World

By | Technology

Artificial intelligence (AI) is rapidly changing the way businesses build products and even provide customer service. We now have automated virtual assistants and “chatbots” answering customer service calls.1 We even have self-driving cars being tested for pizza delivery.2

These quantum leaps in technological advances present both opportunities and challenges. For example, the way we have adopted online financial transactions over the past 10 to 15 years has made everything from banking and paying bills to applying for a mortgage so much more convenient. However, as the recent Equifax security breach impacting more than 145 million people demonstrates, housing that much data in one central location creates a single-entry point for would-be hackers.3

That’s one reason we believe it’s important to work face to face with financial advisors you know and trust. Regardless of where technology takes us, there’s really no substitute for personal interaction, particularly when it comes to planning for your family’s insurance, higher education and retirement income needs. We appreciate the value of combining human intelligence with empathy and understanding, and we know our clients do as well. In this rapidly advancing world of artificial intelligence, it’s important to offer both convenience and personal service.

With that said, we work to keep up with innovations and their applications for today’s world, especially when they may create potential investment opportunities. There are all kinds of innovative things to report. The use of connected devices such as wearables, residential electric and gas meter readers, drones and business self-checkout terminals is expected to grow by 31 percent this year over 2016. Today’s number of 8.4 billion devices in use is projected to grow to 20.4 billion connected devices by 2020.4

AI devices, such as drones, are being adapted for all kinds of creative uses. Researchers in Australia have developed flying drones capable of doing three things:5

  1. Identifying sharks near swimmers and surfers
  2. Amplifying warnings to beachgoers via an on-board loudspeaker
  3. Sending out electrical impulses that irritate sharks and deter them from entering populated areas

One way AI can be more effective than the human brain is its capacity to access and analyze vast more stores of data. As humans, we possess memory and recall, but AI machines can be loaded with an infinite amount of data that can be scanned and identified quickly. Farmers are using this technology via smartphone to take photos of ailing crops, from which AI can pinpoint disease with up to 98 percent accuracy.6

In the construction industry, AI is being used to help project managers track the most egregious potential malfunctions based on plan specifications, phase timing and severity. This helps keep projects on time and on budget with a laser-like focus on safety and quality.7

AI is also having an impact in the retail industry. British fashion icon Burberry requested and uploaded scores of data regarding their clients’ buying habits. This enables frontline retail clerks to make immediate recommendations to complement client selections based on what customers purchased in the past. The intelligence has created a type of personalized shopping service that has proven enormously successful.8

Moreover, the retailer has been able to cut down on counterfeit sales by developing technology that can detect if an item is a Burberry “bootleg” product by analyzing a photo of it.9

 

Content prepared by Kara Stefan Communications.

1 Shep Hyken. Forbes. July 15, 2017. “AI and Chatbots Are Transforming The Customer Experience.” https://www.forbes.com/sites/shephyken/2017/07/15/ai-and-chatbots-are-transforming-the-customer-experience/#31527b2941f7. Accessed Oct. 13, 2017.

2 Amar Toor and Tamara Warren. The Verge. Aug. 29, 2017. “Domino’s and Ford will test self-driving pizza delivery cars.” https://www.theverge.com/2017/8/29/16213544/dominos-ford-pizza-self-driving-car. Accessed Oct. 13, 2017.

3 Bloomberg. Oct. 2, 2017. “Equifax Says 2.5 Million More Americans May Be Affected by Hack.” https://www.bloomberg.com/news/articles/2017-10-02/urgent-equifax-2-5-million-more-americans-may-be-affected-by-hack. Accessed Oct. 2, 2017.

4 Liam Tung. ZDNet. Feb. 7, 2017. “IoT devices will outnumber the world’s population this year for the first time.” http://www.zdnet.com/article/iot-devices-will-outnumber-the-worlds-population-this-year-for-the-first-time/. Accessed Oct.13, 2017.

5 Charlotte Edmond. World Economic Forum. Sept. 4, 2017. “Meet Australia’s beach-protecting, AI-powered shark drones.” https://www.weforum.org/agenda/2017/09/australia-shark-drones-artificial-intelligence/. Accessed Oct. 2, 2017.

6 Jamie Condliffe. MIT Technology Review. Oct. 2, 2017. “OK, Phone: How Are My Crops Looking?” https://www.technologyreview.com/the-download/609028/ok-phone-how-are-my-crops-looking/. Accessed Oct. 2, 2017.

7 Zach Mortice. Redshift. Oct. 2, 2017. “Machine Learning Eases Construction Project Management—and Prevents Catastrophes.” https://www.autodesk.com/redshift/machine-learning-construction-project-management/. Accessed Oct. 2, 2017.

8 Bernard Marr. Forbes. Sept. 25, 2017. “The Amazing Ways Burberry Is Using Artificial Intelligence and Big Data to Drive Success.” https://www.forbes.com/sites/bernardmarr/2017/09/25/the-amazing-ways-burberry-is-using-artificial-intelligence-and-big-data-to-drive-success/#24388a014f63. Accessed Oct. 2, 2017.

9 Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

 

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