Blockchain and Artificial Intelligence united for a 4.0 tech revolution

Blockchain and Artificial Intelligence united for a 4.0 tech revolution

The future of banks and insurance companies is largely destined to move from the union between the blockchain – understood as intelligent management in reading and writing on replicated databases and as a decentralized structure, where information is validated in a mathematical manner by means of an algorithm and not out of trust towards a central body – and distributed artificial intelligence. Otherwise, the loss of numerous customers would only be one of the possible apocalyptic scenarios. And the same fate would almost certainly also affect industry 4.0.

But let’s proceed with order. The possibility of creating one or more blockchains to connect banks and insurance companies will speed up transactions, improving security and transparency, as well as optimizing data control. Furthermore, from this alliance between financial companies, there would be interesting advantages in terms of customization of products and services for the end customer. An example? If, as a customer, you ever need clarification on a specific topic or have a specific request, there will be customer care managed by a chatbot and not the annoying phone guide items. The advantage? As chatbots are driven by machine learning and algorithms, the answer will be surely more satisfying and rapid. The scenario in question, about the combination of blockchain and artificial intelligence, is anything but science fiction. Certainly, the financial sector is destined to meet important and substantial revolutions.

Artificial intelligence cannot do without the blockchain: here are the reasons why

The model of artificial intelligence will certainly evolve and to achieve this goal a channel will be needed, where those directly interested have the opportunity to exchange information and communicate in complete safety. As things currently stand, the blockchain seems to be the ideal environment. Just think of the peer-to-peer network that can ensure a structure that works more or less like the human brain, given the presence of the node system and the way in which data and information are recorded and transferred.

The functioning of the blockchain focuses on the exchanges that take place between the nodes of the system and that are validated by all in real time. There is no central authority to manage them. And the comparison with our mind is necessary, given that there are billions of neurons (not just one) and synapses that govern information and record it every day.

The opinion of Orlovsky Maxim

Orlovsky Maxim, one of the most experienced in the field of neuroscience, wrote an interesting post on Medium some time ago, where the central assumption is that the blockchain will represent for artificial intelligence what the written language was for the brain of man and for his constant evolution. In particular, it will mean that when the blockchain will offer a channel to favor the exchange of data and information in complete safety, the impact of artificial intelligence will be more or less the same as that of the advent of writing which, as we know, for many scholars it indicated the transition from prehistory to history.

The integration of artificial intelligence and blockchain is to be understood as an occasion to gain competitive advantage for banks and insurance companies

There are really many financial institutions that need to be rejuvenated, and banks and insurance companies are part of this cauldron. For many financial companies, the basic mission of the coming years will be to capture a new target, known as the “millennials”. Who are they? An elite of young people who prefer not to use traditional financial services, given that, unlike their parents, as good exponents of the sharing economy concept, they prefer to invest money, time and passion in varied experiences. Which kinds of experiences? Travel, extreme sports or the opening of a startup from scratch. These people prefer to rent, buy the bare essentials rather than to collect items. They, giving up having a wonderful home (perhaps their parents’ dream) or a flaming luxury car (dream of other peers), have been and will be able to transform precariousness into a new and fascinating lifestyle, where the undisputed protagonist is the experience. Taking into account the fact that their purchasing power should be around 1.4 trillion dollars, it should not be surprising that this target is coveted by banks and insurance companies. In fact, “capturing” millennials will mean dominating a market that is certainly profitable for the next few years.

Which aspects will change as a result of greater interaction between artificial intelligence and blockchain?

• Security: identifying suspicious transactions is one of the challenges of the future of banks. Some already use machine learning services, which can identify them instantly.
• Customization: in the future, services will be even more personalized. The recommendations system behind Facebook, Amazon and Spotify, where your friends suggest you what to do, is destined to spread on a large scale.
• Speed: the transfer of information and data will allow consumers, as already mentioned, a better and faster interaction with financial institutions. Using the blockchain to give those directly interested the opportunity to collect the points of the loyalty card and invest them in various markets, with the peer-to-peer network responsible for automation, is one of the many possible medium-term scenarios.
• Customer support: the use of chatbots and virtual assistants will become a constant in the future. These are programs that can simulate human conversations, working in all respects like the experts who respond to the Internet users’ FAQs that connect to the website. The same applies to the development of algorithms capable of responding to the real needs of the customer.
• Lending: after analyzing the login username and password of all registered blockchain customers, the release of the funds will certainly be faster.

And the industry 4.0?

With the widespread dissemination of the association between artificial intelligence and the blockchain there would be interesting changes also for the world of industry 4.0, because it would change the way of producing, or – better said – of auto-producing things. Rightly, we are not just talking about software, algorithms, automation, robots and hardware, but more complex concepts such as designing and producing goods on demand, dematerialization and disintermediation. Smart manufacturing will certainly be the most important innovation, given that the production system will focus on the monitoring of physical company processes by IT systems and decision-making processes will eventually be decentralized.

Furthermore, Industry 4.0 will focus on the following cornerstones:

• Information transparency: it will be up to the systems to collect data with the sensors, store information contextualizing it and creating a virtual copy of the physical data.
• Interconnection: various workers, sensors, machines and devices will have a greater level of interaction
• Assistance: computer systems based on artificial intelligence will help people make better decisions than today. Moreover, they will solve all the problems already indicated in the paragraph concerning banks and insurance companies.

The objective of industry 4.0 will be to anticipate demand

Being proactive, reading changes in demand in advance, has long been a strong competitive advantage for companies and, in the future, this aspect will be even more important in terms of the supply chain, since it would save an infinite amount of time and the costs of raw materials would be amortized. In order to optimize the production of new goods, it will be more and more decisive to know how to choose the suppliers that will have to make the best efforts to make the raw materials immediately available. Waiting times must be brought down to the minimum, so that companies can offer an excellent service and beat the competition, fully respecting deadlines and commitments.

Dangers of a mega artificial intelligence

It is certainly not a hyperbole to talk about artificial superpower, based on the use of intelligent algorithms that, just like men, learn every day and exchange data and information of a certain relevance. What would happen in the unfortunate circumstance in which this network ended up in the wrong hands? The whole humanity, according to experts, would be in danger, given that a mega-intelligence would be able to control all the connected media, including devices.

It is vitally important to start discussing now the role of the blockchain and modern technologies based on artificial intelligence and about their correct use, before the scandals that have overwhelmed the world of financial institutions, especially that of banks, end up affecting the whole industrial system.

Eloisa Marchesoni.

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