In the last decade, we have been witnesses of many different technological advancements. Ideas that were once futuristic have permeated human life so deeply that it is now almost impossible to imagine our lives without them.
Technology is advancing at an exponential rate, and with the start of a new decade, we can only beg to wonder what new innovative ideas will come our way. Technology trends can help us take a glance at what the future entails. Leveraging such new technologies can provide a competitive advantage in any industry.
Technology trends are the different types of technological advances that are becoming popular across all the markets and industries. The top 5 technology trends nowadays are artificial intelligence and machine learning, the Internet of things (IoT), 5G network, big data, and blockchain.
Artificial Intelligence (AI), a term coined by John McCarthy in 1956, is defined as "the science and engineering of making intelligent machines." Over 60 years later, it is defined by Lexico as: “The theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.”
Artificial Intelligence is one of the biggest technology trends in many industries. Although it has been used for many years in the financial sector, it is constantly evolving and disrupting the market. In the financial services industry, it is being used in the front, middle, and back office, and it represents a huge financial advantage in all these channels. By 2023 it is estimated that AI will help banks save up to $447 billion a year.
The front office refers to the part of a firm that has a direct interaction with the customer. By implementing AI in this area, banks could save up to $199 billion a year. In the front channel, AI is used for biometric technology and personalized insights. This helps banks with customer’s identification and authentication, improving the relationships with clients through chatbots, and providing personalized recommendations. Even though chatbots help customers have an overall better experience by offering a 24/7 frictionless service, their true value relies on the information they collect through their interaction with customers. This data collection means the chatbots learn from experience and can provide better insights and recommendations for the clients, all while developing new marketing strategies to track and analyze customer behaviour.
The middle office as defined by Investopedia is: “... the department in a financial services company, investment bank, or hedge fund that sits in between the front and back office. It typically manages risk and calculates profits and losses. It is generally in charge of information technology (IT) as well.” This channel has the biggest savings amount thanks to AI, with $217 billion a year.
AI implementation in the middle office helps banks detect and prevent fraud, with Know Your Customer (KYC) regulatory checks, and with anti-money laundering processes. In fraud detection, AI goes through an enormous amount of data and can identify patterns, which can be potentially fraudulent. AI in KYC checks is made through a system that allows AI to investigate the customers and their payment behaviour through already existing datasets, helping the bank identify the risks that come with each client, without any employer ever having to meet them in real life.
According to Europol, European Banks spend $20 billion a year on anti-money laundering compliance. This is why the use of AI to fight money laundering is one of the most appealing usages of this technological advance. AI screens through the bank’s data and identifies patterns that can be related to money laundering, all while suggesting more convenient ways to analyse the data.
Back office is the part of a company composed of administration and support personnel who have no direct interaction with the client. On this channel, AI is used for smart contract infrastructure and it helps banks save up to $31 billion a year. AI can help the back office by processing and revising contracts more smartly and effectively, or even train salesmen on how to interact with clients in the best possible way.
AI can help medical patients through different types of robots. Assistive robots can help with manipulation tasks (grasping or feeding) in disabled patients, walking assistance through wearable devices, and with personal mobility through transfer devices e.g. wheelchairs. Robots that diagnose, robots treating patients from their homes or workplaces, and clinical AI robots providing cognitive behavioural therapy, are other examples of how AI is revolutionizing the healthcare industry through robotics.
Energy is another industry being highly disrupted by AI. This technology trend assists the different energy companies by collecting data and scrutinizing it, looking and identifying important trends in energy generation and consumption. This helps the companies have a more effective process, reducing production time and waste.
Technology advancements, such as AI, allow biotech companies to extend their research scope and improve most of the production processes. This means Biotech firms can have a more cost-effective approach. With AI, companies take less time introducing new products into the market, customers get more affordable products, and the overall service becomes more beneficial for the general public.
AI can help drug makers analyze large amounts of data and effectively recognize treatments based on the direct cause of the disease. This could reduce up to $2.6 billion in the treatment developing process.AI is also helping in the development of target-based and phenotypic drug discovery. Which is the: Cloud Pharmaceuticals, Inc (AI driven drug company) and GlaxoSmithKline (GSK) collaboration case. Where the AI Company is designing novel small-molecule agents for specific targets. This means the process of discovering novel, more accurate, high-quality drugs will only get better with time.
As defined by PWC, blockchain technology is: “… a decentralized ledger of all transactions across a peer-to-peer network (P2P). Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, settling trades, voting, and many other issues.” A blockchain works as a storage of information in a highly secure database. The Digital era has shown us the importance of information. Protecting data has never been more difficult, and it represents a huge challenge for a lot of companies. This technology helps many different businesses by facilitating the storage, authentication, and protection of their most valuable data.
When it comes to managing finances, security is one of the highest priorities. Blockchain provides a highly secure database, and multiple points of verification for any type of transaction, which secures information and keeps records in every step of the way. This is why blockchain is becoming an essential part of finances and it is starting to be integrated into companies’ operational infrastructure.
Consumers are, once again, one of the most beneficiated parties by the implementation of these technology trends. When it comes to implementing blockchain in financial institutions, transaction-processing time reduces down to 10 minutes. Blockchain as a technology service works 24/7, which means any money exchange in banks, can be done more efficiently and securely by eliminating central authorities and leaving behind old payment networks. This technology can help banks save up to $20 billion a year according to the Spanish bank Santander. Crypto-currency, as defined by Lexico, is: “A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.” Bitcoin, one of the first cryptocurrencies presented to the market, was enabled by blockchain technology. One of the main differences between cryptocurrencies and any traditional fiat money is crypto’s independence from central authorities. Blockchain allows cryptocurrencies to operate this way by spreading all the operations throughout a network of computers, reducing costs and risks. It is safe to say that with the current rise of cryptocurrencies, blockchain is becoming more relevant by the minute.
Blockchain can be used to store a patient's medical records more securely. It allows users to store and distribute information, without allowing them to edit it. This makes it one of the most reliable ways to store information since it cannot be easily altered. It also ensures privacy to the medical patients, since only a selected number of individuals would be able to access the information. Making medical records more secure.
Blockchain technology helps this industry in a very interesting way. It is helping customers do P2P transactions with energy in a frictionless way. This can be used in-between energy companies and even private individuals. Potential use for this technology could be energy micro-generation by private individuals, as any excess energy generated could be traded through blockchain. Another way it could be used is by helping companies track grid materials in real-time, making the industry more secure.
It is also possible to see how blockchain is impacting this industry through the supply chain channel. Suppliers can use blockchain technology to register all the information regarding every product being used by the company. It can be used to track materials, in real-time, while they are being transported. It can also be used to track and record the origin of any material purchased by them. This helps firms track their materials and verify their authenticity. Moreover, it could help confirm the health and ethical labels that come with certain products or materials e.g. organic, national, local, cruelty-free, etc.
5G is short for the fifth generation of cellular networks. This new generation promises faster, more stable wireless networking. This will, without a doubt, have an impact on the advances of many other innovative trends e.g. interconnection of more devices, or more data streams. This not only benefits the general public, but businesses of any industry also will enjoy the perks of this technological advance.
Smartphones are the first industry that comes to everyone’s mind when it comes to 5G advances since it is the one that gets affected more directly. Smartphones will get inherently better and consumers will be able to potentially go from consuming 2.3 GB of Internet data per month, up to almost 11 GB per month by 2022. Overall the industry will become faster, with a bigger interconnection between individuals and devices, and it will give users faster and better access to more information.
5G also promises to improve people’s wellness. This network allows the collection of smarter streams of data. It also allows doctors and patients to follow medical procedures, trends, and changes from any place. This improves the healthcare industry by making it more personalized, effective, and accurate. Moreover, the fifth generation of networks offers a wider range that promises to reach a larger group of consumers. For healthcare, this eludes wellness service at home or in the workspace. For example, senior care could be highly improved by 5G (in collaboration with IoT), by indicating to any caregiver the overall health of the patient at all times and without having to be present in the same place. The fifth-generation network promises a faster, stronger, and smarter infrastructure and service for all its users. Taking the healthcare service to another level, offering more personalized, faster, and connected service to all its consumers.
With the ongoing digitalization of financial institutions, there is a need for an upgrade in the online services being provided. 5G promises to maintain the benefits that have come from digitalization while also upgrading them into a better, faster, more interconnected service for the consumers. The last generation of cellular networks can help the financial service industry to handle the vast amount of transactions at scale.
5G can help the energy industry have more cost-efficient operations and provide a better connection for many different and remote locations, like wind farms. This means there can be better resource management, even from remote locations, which could prevent any dangerous unexpected events.
The speed and capacity that come with 5G will improve the interconnection of all devices, including automobiles. Cars will be able to connect to other devices such as other cars, cellphones, pedestrians, traffic infrastructures, among others. This allows self-driving cars to be connected to their surroundings, making them more efficient and safer for drivers and pedestrians. It is possible to watch how this works in real life thanks to the 5GAA Live Demos Show C-V2X.
In simple terms, Big Data is the amount of data generated in the digital age, more specifically the exponential growth of it. Together with AI algorithms, nowadays it is possible to analyze this enormous amount of data, spot patterns, and make predictions in a more precise way. This means better decisions for the future can be made with the help of this technology advance. For different types of companies, this means now they have new insights from their data.
With the ongoing growth of the global population and our dangerous natural resources consumption pace, sustainable practices become more important day by day. New emerging technologies can play an important role in the development of these practices, making them more efficient. In the case of Big data, it can help by assessing environmental risk, help improve regulations, and optimizing resource usage. In agriculture, for example, it could help regulate water usage in a more responsible way. This industry consumes 70% of all freshwater withdrawals worldwide, which can be highly damaging to the environment. With Big Data implementation, there can be a better regulation of these resources, reducing water waste significantly.
Big Data in the financial industry can help companies store large amounts of data in a more cost-efficient way. Through big data, companies can also analyze all the information they have and improve their approaches and strategies.In the financial services industry, it is mainly used to manage data traffic and optimize their operations, looking to offer their customers a better experience and have higher client retention. It is also used to remove overlapping data and to provide a more efficient tool to access data. Big data can also help the industry by analyzing risk and monitoring the financial market activity.
Big data use in this industry allows companies to manage the vast amount of data they generate. There is a large amount of said data that remains untapped. Implementation of big data to have better records of this information would result in a vast cost reduction and improvement in the quality of the products. It helps to maintain a better record of inventories and to integrate all locations. It can also be used to analyze customer behaviour and create more detailed profiles, therefore having better customer-based strategies.
New technologies have brought us a lot of advancements in the automobile industry. The favorite new toy in this sector is the self-driving car. As automobiles become more technological, smart, and automated, new challenges start to show up. An hour of driving in a self-driving car generates an obscene amount of data, four terabytes of data to be precise. 4TB of data is equal to 4 trillion bytes of data, an amount that can be difficult to process on its own, but on top of that, automated cars need to process it while agilely responding to the system at the same time. Big data comes in to help store, process, and manage that vast amount of data, making it easier for the car to function more effectively and not just burn in the attempt.
The Internet of Things (IoT)
IoT is defined by Lexico as: “The interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data.” Nowadays this concept is more relevant than ever, since the number of interconnected devices increases by the day. What started with smartphones and computers has now evolved into smart homes, cars, even refrigerators. IoT promises to make the world one connected place. This not only means more electronic devices for the people's enjoyment, it also means more beneficial developments, since it has an impact on energy management, security, and healthcare equipments as well.
Smart cities are also part of the mobility industry. A smart city is a livable city completely interconnected, with technology implemented in almost every sector and aspect of it. These cities help to cope with everyday problems, such as pollution, excessive energy consumption, security, traffic, among many others. IoT can be used in smart cities in many different ways, and to a certain extent, the functionality of the city relies on it. Interconnecting devices, data exchange, collection of data, and sensors around the city are a few ways IoT can be used in smart cities. E.g. finding parking spots all over the city through IoT. Thanks to smart detectors on the ground of the streets, interconnected to a mobile app, you can check free parking spots all over the city. This example can be seen nowadays in Palo Alto, USA.
The utility sector refers to the category of companies that provide basic needs e.g. water, gas, or electricity. This industry was one of the pioneers in adopting IoT. Specifically for energy companies, this provides more space to welcome new sources of energy, have higher security to monitor the sources, better customer service for their clients, improvement in the management of assets and operations, and the opportunity to have new business models and improve services.
An example of how the energy industry is implementing IoT into their companies is smart meters. This electronic device records information regarding the consumption of energy in a particular place, while communicating, in real-time, that information to both the user and the energy supplier. On top of that, these devices can help keep track of the number of energy users of green technologies, allowing them to be more aware of energy consumption and help promote the use of more environmentally friendly devices.
Wearables nowadays are far ahead from the smartwatches days. The biotech industry is coming with new innovative wearables day by day. For example, smart tattoos to detect health status, or smart glasses that integrate the virtual world into our everyday lives. The connectivity of these devices and the technology behind it is possible thanks to IoT. In the most basic way, smartphones being connected to smartwatches happens thanks to IoT, where all the information in both of these devices are working as one. More products will continuously find its way to market with more innovative inventions, such as smart clothes, smart stickers, smart accessories, and many others.
TECHNOLOGY AS A CATALYST FOR NEW BUSINESS PARTNERSHIPS
All these technology trends disrupting industries around the globe are affecting enterprises of all sizes. They can represent a competitive advantage, or disadvantage, depending on how firms exploit these new tools.Technology has allowed startups to have a better chance of competing with large corporations since it is easier for them to incorporate new technologies into every aspect of their businesses in a frictionless way. Large companies tend to have a harder time with this type of transition. When companies manage to separate themselves from traditional legacy systems, it enables them to have faster uptake of new technologies. This separation process tends to be harder for large companies with long years of trajectory behind.
While startups have a technological advantage, they tend to lack the funds. On the other hand, large corporations have the funds, but they also experience a hard time fully embracing next-generation technology advances, prisoners of their traditional legacy systems. This creates an opportunity for these two parties to look for a partnership. Startups and large companies need to achieve a symbiotic relationship, where both benefit and help each other at the same time.
Corporate accelerators programs act as a bridge between startups and large corporations. These programs, sometimes hosted by large corporations themselves, help startups accelerate their growing process in many different ways.
Accelerators provide an environment for learning, growing, mentorship, partnerships, and funding, where both, big corporations and small ventures, can be benefited. The biggest corporate accelerator programs hosted by big companies today are AT&T’s Aspire Accelerator, The Bridge by CocaCola, Google’s Launchpad Accelerator, IBM Alpha Zone Accelerator, Disney Accelerator, among many others.
Sometimes it can be simpler for big companies to buy startups. This happens for many different reasons, two of which are, resource acquiring and elimination of competition.
Resource acquiring is when big companies buy small ventures in order to acquire their skills and technologies in a more effective way. Instead of learning and building a new skill from scratch, big firms integrate startups and the technologies that come with them into their companies, lowering costs and making the whole process more effective.
Elimination of competition means that, instead of competing with a startup with better technological tools and more effective processes, companies buy it and merge forces to compete against bigger fish. This method also helps to remove excess capacity in the industry.
For all types of enterprises it is highly important to stay on top of all the technology trends. This can be harder for firms with a lot of bureaucracy and conservative leaders, but at the end, it is a matter of how to use these technologies as an advantage or see competitors gain market share.
Even though there are new next-generation trends constantly permeating the market, it is clear how some trends are stronger than others. Trends that have been reshaping the market and the way we do business, like Artificial intelligence, IoT, and Blockchain. These trends have not only changed and redefined industries and businesses all over the world, but they will continue to do so for a long period of time.