How is AI disrupting financial industry?

How is AI disrupting financial industry?

by Xinhua writers Wang Naishui, Li Ming

NEW YORK, Sept. 17 (Xinhua) — Artificial intelligence (AI), along with other financial technology (fintech) innovations, are significantly changing the ways that financial business are being run, especially in the fields like trading, insurance and risk management, leading the traditional financial industry into a new era.

ROBOTS REPLACING HUMANS

Back in 2000, Goldman Sach’s New York headquarters employed 600 traders, buying and selling stock on the orders of the investment bank’s clients. Today there are just two equity traders left, as automated trading programs have taken over the rest of the work.

Meanwhile, BlackRock, the world’s biggest money manager, also cut more than 40 jobs earlier this year, replacing some of its human portfolio managers with artificially intelligent, computerized stock-trading algorithms.

Those two big companies are not the only financial institutions replacing human jobs with robots.

By 2025, AI technologies will reduce employees in the capital markets by 230,000 people worldwide, according to a report by the financial services consultancy Opimas.

“Asset managers, analysts, traders, compliance administrators, back-office data collection and analysts are most likely to lose their jobs, because their jobs are easier to be replaced by automation and AI,” Henry Huang, an associate professor at Yeshiva University’s Sy Syms School of Business, told Xinhua.

“The net effect of this kind of automation will be more about increasing the productivity of the workforce than of robots simply replacing people,” said Richard Lumb, group chief executive of Accenture’s Financial Services operating group.

The best automated firms will outperform their competitors by making existing workforces more productive through AI, he added.

While humans are losing jobs in the financial industry, companies are enjoying the benefits bringing by AI technologies.

“Initially AI will add the most value and have the largest impacts in compliance (especially anti-money laundering and know-your-customer functions), cybersecurity and robo-advice,” Lumb told Xinhua.

WALL STREET EMBRACES FINTECH

Facing rising pressures from fintech innovations, represented by AI, Wall Street financial institutions choose to embrace the new trend.

“In general, we see the outlook for fintech as strong. Demand for fintech by banks is growing because of regulatory and capital pressures, competition from large technology players like Google and Amazon and the abundance of new security threats,” Lumb said.

The FinTech Innovation Lab, an annual program launched in 2010 by Accenture and the Partnership Fund for New York City to foster fintech growth, has helped New York participants raise more than 440 million U.S. dollars.

“The FinTech lab has proven to be a significant program for engagement between entrepreneurial technology companies and New York’s financial industry,” said James D. Robinson III, General Partner and Co-founder of RRE Ventures.

In New York City alone, fintech investment overall has increased from 216 million dollars in 2010 to 2.4 billion dollars in 2016.

“Big new frontiers are only just beginning to opening up in fintech – from AI, block chain and robotics to biometrics, augmented reality and cybersecurity,” Lumb said.

Among all the fintech innovations, the prospect of the block chain has the highest expectation.

“The block chain will change the way people store information, which is real, spreading fast and cross-border, and its ‘de-centric’ feature will allow everyone to know what other people are doing. The application of block chain in finance will once again bring about a revolutionary impact on the industry, just like AI does,” said Huang.

FINTECH IN CHINA

Although it is hard to tell which country is leading the fintech innovations, many experts agree that China has outperformed other countries in fintech services adoption.

“The work in China has been dramatically ahead of anywhere else in the world,” said Jim Bruene, founder of Finovate conferences, which showcase cutting-edge banking and financial technology.

With more intelligent, in-context financial services, especially commerce activities built around social media applications, “China is likely five or six years ahead of the United States,” Bruene told Xinhua.

The latest report by Ernst & Young showed that China’s fintech adoption rate came at 69 percent in an index that measures users’ activity in various areas, including money transfer, payments, investments, borrowing and insurance, the highest among 20 major markets globally.

Wechat Pay, the e-payment platform built inside the 900-million-user Chinese social media application Wechat, is seen as the future of fintech services by many experts.

“Messaging is the next web browser, fintech and all other applications are going to live in a mobile messaging application like Wechat, just like how they lived in web browsers,” said Greg Ratner, co-founder and chief technology officer of Troops, a U.S. artificial intelligence startup.

“It is going to be the future and is already happening in China. And I think it will come to the United States in the next five years,” Ratner told Xinhua.

According to Huang’s observation, there is a major difference between China and the United States in fintech development model.

“In the U.S., banks are the main driver of fintech innovations, while in China, BAT (Baidu, Alibaba, Tencent) representing the enterprises contribute most to the fintech development,” Huang said.

“Considering the scale of banks in China, they should play a more important role in fintech innovations,” he suggested.

http://news.xinhuanet.com/english/2017-09/18/c_136616678.htm

July 4th, A Time To Be Thankful For Our Freedom

As the 4th of July arrives upon us, Patriots all across the Untied States will be celebrating the day of our Independence. Year after year we have the opportunity to reflect on the day our Declaration of Independence was signed, which gave us independence from the tyrannical British King George III. Thomas Jefferson, the main author of the Declaration of Independence, stated in his works that:

“…We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness … “

These are words that we must cherish and embrace while remembering that we as a society, though we may be different from each other, are ultimately Americans. Most importantly though, we are humans that are blessed with certain rights and the permission and ability to create our own happiness. As Americans it is also our commitment to pledge allegiance to our flag, to the United States, and to each other. And we shall do this as “one nation under God, with liberty and justice for all.”

In these uncertain times that have been darkened by evil, we must remember the vision of our forefathers and apply it to our lives. It is imperative to know that our nation will stand together against any evil, and never forget that “In God We Trust.” We are a nation of freedom, liberty, and honor and will never be a nation in fear. Our freedoms and liberties have come at an ultimate cost, and must be defended, but these are the prices we have to pay. Freedom is not free, and we remember those who have lost their lives to protect us and defend our freedom.

Independence Day encompasses all that it means to be an American. We are truly blessed to have been born in a country where anything is possible to anyone. Our freedoms, equality, and fellow countrymen are all very important things to celebrate on the 4th of July, along with the birth of our great nation the United States of America.

John Adams, himself a signer of the Declaration, thought that Americans should henceforth celebrate a “great anniversary festival.” In a letter to his wife Abigail he wrote, “It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forevermore.”

And so it began in 1776, the celebration of Independence and the beginning of one of the greatest nations on earth. Let us remember that a nation is only as good as its people are to each other. Be unified, go in love and go in peace.

Deputies: Stolen guns recovered when swiped iPad found

DELTONA, Fla. — A stolen iPad led deputies to an even larger theft in Deltona.

The investigation began Sunday when a woman called the Sheriff’s Office to report her iPad was stolen while it was in her son’s possession outside a Publix supermarket.

“Just beware and be careful,” Rosa Campbell said about the theft.

She told WESH 2 her son was trying to do something nice for a man in need, but that man then took advantage.

“My son went into the store to buy him a sub-sandwich because he said he was homeless,” Campbell explained, “then he took the iPad … he distracted him.”

Campbell and her son then decided to investigate. She called her cellphone service provider and enabled the “Find My iPad” app.

She watched as the device’s GPS was sending back signals from all over town.

Once the movement stopped, she called the Volusia County Sheriff’s Office.

Within an hour, deputies moved in on their suspect and arrested him. He’s identified as 28-year-old Raymond Ingberg.

“(We) found him in possession of various items that were stolen in another case,” Sheriff’s Office spokesman Andrew Gant said.

Gant told WESH 2 the other items found in a bag Ingberg was holding had been taken during a recent home break-in.

Along with the iPad, deputies also recovered jewelry and five stolen guns.

“We’re thankful we were able to get those guns quickly off the street before they became involved in some other kind of crime,” Gant said.

Campbell said she’s glad she was able to track her iPad and help deputies find it and the suspect as well.

“Even though it may look minor you have to think what they might do to someone else,” Campbell said. “That minor thing can lead to big things, remember these people that do these crimes, they start little and then they keep getting big.”

Ingberg was booked into the Volusia County Jail on several charges under a bond of $55,000.

http://www.wesh.com/article/deputies-stolen-guns-recovered-when-swiped-ipad-found/10046035

 

Skimming device found at Cocoa Beach gas station

Cocoa police showed off the devices that were helping thieves steal money at a gas station pump.

A maintenance worker discovered credit card skimmers at the Chevron station at 2700 U.S. Highway 1.

Police are not sure how long the device may have been in place.

Authorities are asking customers who made fuel purchases there to contact their credit card company to verify all recent transactions.

Additionally, they are asking people to be on the alert for any other devices that may be in place in the area.

http://www.wesh.com/article/skimming-device-found-at-cocoa-gas-station/10036202

 

DeLand man arrested in drug distribution, money laundering operation tied to Mexican…

Federal agents said a DeLand man arrested Friday distributed drugs in Volusia County and then transported the money to a Mexican drug group in Arizona.

Wilfredo Arroyo and an accomplice, Patricia Catron, conducted the drug operation in Volusia and the Central Florida area between Nov. 1, 2015 and Oct. 21, 2016.

Arroyo was charged with conspiracy to traffic marijuana 25 pounds or more, conspiracy to commit money laundering $100,000 or more and the unlawful use of a two-way communication device to facilitate the commission of a felony. Arroyo was being held Sunday at the Volusia County Branch jail without bail.

It was not immediately clear Sunday if Catron had been arrested.

According to reports, the Federal Bureau of Investigations Safe Street Task Force, which includes a Volusia County Sheriff’s Office investigator, asked Volusia and federal judges to grant authorizations to intercept the suspects’ telephone calls from members of the Mexican Transnational Criminal Organization.

Court documents did not name the specific gang affiliation, but U.S. Drug Enforcement documents list the notorious Sinaloa Cartel as the dominant transnational organization in Central Florida.

Task force investigators listened to telephone calls from Arroyo and Catron between September and October 2016 as they chatted with Josue Hernandez, who guided them to Arizona, transporting money believed to be the proceeds from drug sales, investigative reports said.

Hernandez was arrested Oct. 21, 2016 in Lake County and admitted that he and Arroyo were involved in a long-term marijuana trafficking organization that shipped hundreds of pounds of marijuana from Mexico to Central Florida, federal agents said.

According to reports, Hernandez also said he and his accomplices arranged the return of more than $100,000 in cash — the proceeds from marijuana sales to the drug trafficking organization.

Agents surveilling Arroyo and Catron executed a search warrant at Arroyo’s Forest Ridge Road home in DeLand and found 42 pounds of marijuana and pieces of metal containers similar to those used by Hernandez to transport marijuana, agents said.

Agents also found a buried freezer at the home used to store drugs, federal investigators said.

http://www.news-journalonline.com/news/20170604/feds-deland-man-arrested-in-drug-distribution-money-laundering-operation-tied-to-mexican-group?start=2

Hong Kong’s money laundering fight is a fig leaf

Hong Kong is under pressure to step up the fight against money laundering. The city is considering forcing private firms to disclose their true owners. That would shed light on a lucrative web of shell companies. The proposed reforms may be just enough to avoid international censure – and steer clear of embarrassing Beijing.

The Panama Papers leaked last year exposed Hong Kong as a major manufacturer of offshore structures that companies can abuse to hide assets and evade taxes. Finding ways to track the beneficial owners of opaque corporate vehicles is also a G20 priority. In reaction, Hong Kong is looking to demand its 1.3 million unlisted companies to keep a register of their effective owners and make it available upon request. This might ensure Hong Kong ticks all the boxes in time for a review expected next year by the Financial Action Task Force, a global anti-money laundering body with the power to blacklist jurisdictions. Hong Kong appears to be aiming to meet the letter not the spirit of the global crackdown. For example, it would not grant free and easy access to the new set of data, as Britain does. This will maintain a high barrier for investors or journalists seeking information or trying to hunt down malfeasance.

Local players, concerned about rising costs and privacy, argue only law enforcers need to access this information. Also, at up to HK$25,000($3,220), sanctions for failing to record the beneficial owners or responding to a request for information seem mild. Hong Kong’s proposed rules for more disclosure may also be just enough to help Beijing in its own war against corruption and its attempt to stem the illicit transfer of money abroad without upsetting the country’s leaders.

A record $725 billion flew out of China last year. The Panama Papers, which covered an earlier period, showed relatives of powerful mainland officials linked to some shell companies. That suggests there are big vested interests in maintaining the status quo – and allowing Hong Kong to take baby steps on the road to financial transparency.

http://www.nasdaq.com/article/breakingviewshong-kongs-money-laundering-fight-is-a-fig-leaf-20170314-00009#ixzz4bIzSNtIP

Photot: Reuters