December 25, 2015 at 11:27

Economy 2.0: Why I Don't Believe in Banks in 15 Years


    Bank of the future

    Of course, banks will survive. But in the form as it is today - it’s definitely not. Now I’ll try to explain how social networks, the Uber approach and the ability to analyze big data affect only one segment.

    Take the securities. Historically in America of the 1920s, you had to go to some uncle shouting "Only I know what and how." This guy was called a broker. You brought him money, and he monitored the commission so that it became more. The obvious problem was that the uncle’s actions remained a black box. And his interest was not in your profit, but in his, uncle's, personal.

    But the first evolutionary chain went not in the direction of moving away from uncles, but in the direction of identifying alpha males among them.

    Age of funds


    A successful uncle broker woke up one fine morning and saw a crowd around him. Since he was successful (or he was just lucky), the crowd was not with guns and a set for Lynch's court, but with money. And smiled. And pulled the ring. Everyone wanted to give money to him, because with his past actions he proved that it was worth the effort. At this moment, the uncle was aware of the situation and said the following:
    - You are many, but I am alone. Let's make a foundation!

    So in the 70s the first index funds appeared, when the whole crowd agreed on where to invest, and the uncle made sure that everything went according to plan. It was instead of automation, because in the 70s the scripts were still warm and tube literally.

    Uncle loved expensive offices, expensive women and expensive wine, plus he kept a horde of “scripts” - younger employees on the phones. All this created high costs. It is these costs that determined the third round of evolution.

    Exchange Funds


    At some point, the young uncles got together and decided that something was going to go that way. The old uncles with funds were snickering, and the young have nowhere to develop. And then they looked suspiciously at the computers and realized that it was possible:
    1. Make all operations cheaper.
    2. Put the index fund on the stock exchange as a separate company, because it is also a company!

    So we got an analogue of virtualization. The fund, which was needed for the clustering of shares, itself became a company issuing its shares. Everything is a bit wrong in terms and exact definitions, but in essence - it is.

    The woman was taken out, the machine was put


    Not everyone liked the guys who managed the funds. Since their work was no different from the work of robots, and the robots had already grown up and matured, it was decided to replace all uncles with robots. All the same, they buy shares in the fund on a list. And next to put the system administrators so that they monitor these robots.

    Plus, I wanted to make sure that the value of the fund’s share was directly and rigidly tied to the value of the shares owned by the fund.

    This is how ETFs appeared - clusters of stocks purchased on a list. And sysadmins like us, standing nearby and in no case touching the logic of robots (because their actions are checked by at least two more independent organizations).

    All this happened in the 90s and reached us only when we raised the infrastructure in IT and legal terms in the country for this in 2012.

    At this time, another important thing happened in America and Europe - the “humanitarian” market revolution.

    Humanitarian revolution


    It quickly became apparent that for portfolio investors (those who collect stocks to calmly wait until they grow, that is, use securities as an analogue of a bank deposit), the sets are stunningly similar in the strategy of minimizing risks.

    A simple questionnaire has appeared for those who have money, but do not want to understand the markets. It came down to determining how much you are willing to invest and how much to risk. For example, set a goal - when you earn 35 thousand rubles a month, save your son at university after 12 years. Or to the apartment for his wedding. The software tells you that you need to invest 50 thousand rubles now and pay another 1200 rubles from each payday. You move the risk slider to the position that suits you and click OK.

    Hop! The portfolio is formed, and the robot will purchase it and manage it for the next 12 years. Now we have such a set, you can see it here. There you distribute the test amount (which you do not need to deposit) and see what happens to it. You can replace it with real money at any time. Here is the link: finance-autopilot.ru .

    Future


    In my opinion, the next stage is direct access to accounts and social networks. Robots will be able to use all the money that you have in your accounts in order to invest them in diversified instruments. You just check that they farm for you there for a month and, with special desire, move a couple of sliders. Now everything is already heading towards something similar. At the very least, analytics of expenses already makes it possible to understand how much a person can save for an investment account.

    The second topic is Uber and his one-button approach. The guys actually changed the whole banking sector. In the coming years, banks will rapidly simplify interfaces in the same position - so that with a single button you can do what used to take days in a couple of minutes.

    The third area is big data. The correct risk assessment allows you to invest correctly. From an example today - it suddenly became clear that some of the most reliable borrowers are those who keep pets. This seemingly insignificant factor suddenly gained a very high weight coefficient. I think banks are interested in knowing what you eat, how you dress and with whom you are friends. If you let them in social networks, they will be able to know everything about your money. Until the analysis, the cost of clothing in the photo on the avatar. And even now, if you have information about a child in your social network, banks start vying to offer you products for his apartment, his university and his medical insurance in 15-20 years.

    I think it will soon become a robot adviser. “Misha, will I have a child, will I sell everything?”, And Misha’s robot says: “No, only sell Microsoft and half of Google, then buy this target-date fund. Selling exactly after 18 years, enough for a university. And here’s another 500 rubles difference for you - a booze in the evening with Peter and Cyber30mbi81 ”.

    A bank in the modern sense will not be needed.

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