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For financial institutions, technological advancements often present a spectrum of possibilities: from beneficial innovations to potential threats, and sometimes, even outright dangers. This dynamic interplay was on full display at the latest Consumer Electronics Show (CES), an annual event where groundbreaking technologies are unveiled. Beyond simply identifying tools for adoption, banks and credit unions must also discern which innovations demand a defensive strategy.
AI Wearables: A Double-Edged Sword for Data Security
Among the emerging technologies, AI-powered wearable devices — such as smart rings, pendants, and glasses — pose a significant security concern. These gadgets are designed to record nearly everything the wearer experiences, from visuals to audio. Don Relyea, Chief Innovation Officer at U.S. Bank, who regularly brings his team to CES, expressed apprehension regarding these devices.
“We’re going to have to figure out how to screen for them,” Relyea noted, highlighting critical questions around their presence in secure banking areas or potential exposure to sensitive customer data.
Promising Innovations for the Banking Sector
Despite the security challenges, the U.S. Bank team also identified numerous intriguing products and concepts with exciting potential for the financial industry:
- Autonomous Vehicles: Mobile Bank Branches of the Future? Self-driving cars, like those from Waymo, sparked ideas about re-imagining them as mobile banking units. These could potentially offer personalized service by traveling directly to a customer’s home or office.
- Electronic Literacy Kits: Nurturing Financial Acumen. A Swiss company’s electronic literacy kits, designed to teach children about electronics through progressively challenging projects, inspired questions about creating a similar curriculum for financial management. Todder Moning, U.S. Bank’s SVP and Head of Research and Development, pondered whether robots could even teach financial literacy.
- Flexible Screens: Enhancing Digital Interactions. While large monitors still impress, the innovation of foldable, crease-free screens caught the team’s attention. This technology could offer expanded display real estate for various banking applications, enhancing user experience.
- Paper Batteries: Sustainable Power Solutions. The Flint Paper Battery, a compostable battery embedded in a paper wafer, presents an eco-friendly power source for devices. This aligns with growing trends in sustainability and could influence future green banking initiatives.
Key Themes from the Innovation Frontier
The U.S. Bank team returned from CES with a wealth of new ideas, focusing on several overarching themes shaping the future of finance:
1. ‘Healthcare Is Wealthcare’: The Intertwined Future
Traditionally, physical health and financial health are viewed as distinct, but Moning observes a clear convergence. He explored “smart mirrors” that use biometrics to assess health markers and project longevity. This technology could provide vital health data, supporting more holistic financial planning for clients.
Moning articulated this synergy, stating, “It struck me that ‘healthcare is wealthcare’… The outcomes you have relative to health are closely aligned with the outcomes you have relative to wealth.” This connection opens new avenues for banking, especially as many health-related devices involve upfront costs that banks could finance, alongside subscription services suggesting embedded payment channels.
2. Robo-bankers: Automation in Branches
CES was abuzz with robots of all types, from human-sized androids to compact personal devices. U.S. Bank representatives even tested robotic exoskeletons that augment human strength, envisioning them as consumer tools potentially requiring financing.
However, the prospect of robots as immediate branch greeters faced a reality check. Relyea found the animatronics “super creepy,” emphasizing U.S. Bank’s commitment to human connection at branch entrances. Yet, Moning foresees a future where today’s “robotic natives” — children growing up with robots as toys — will readily accept androids in banking environments. A more immediate application could be “human in a box” holograms, designed to offer expertise, potentially appearing in bank branches sooner than full-fledged robots.
3. The Return of the Metaverse?
The initial hype around the metaverse may have faded, but Moning believes the core concept is not dead. He notes that the digital environments used to train self-driving vehicles and robots already resemble a functional metaverse. Moning predicts a “boomeranging back” of the metaverse concept, contingent on augmented reality (AR) glasses reaching a critical capability threshold.
Crucially, this future metaverse won’t be about “living” in an alternative digital world. Instead, it will manifest as a “digital overlay into the real world,” akin to augmented reality games like Pokémon Go, blending digital information seamlessly with our physical surroundings.
Engaging Risk Experts Early: A Critical Takeaway
A key insight from U.S. Bank’s CES experience is the indispensable role of risk management. The bank consistently includes a risk management expert on its innovation team, fostering a tight partnership between innovation and risk functions.
Relyea describes their approach as “no… but,” where risk specialists actively seek solutions to achieve business outcomes while implementing appropriate controls. This collaboration is particularly vital for AI technologies, where risk experts help establish protective layers to prevent leakage of customer and bank data.
Rather than being seen as blockers, risk experts are viewed as allies and problem-solvers. Relyea humorously notes that they’re not just saying “No way in Hell,” except for one clear boundary: prohibiting AI-equipped wearable devices in secure bank areas.
Source: TheFinancialBrand.com