[ MUSIC ] Good afternoon. Here we are gathered to talk about the disruption of financial services by technology. But imagine it's 1619 And four centuries ago and you are a bookkeeper with the Dutch East India Company. In 1602 the Dutch East India Company issued the first shares in the world's first stock market in Amsterdam. The East India Company was the world's first company to IPO. But as the bookkeeper, this is your most advanced technology, Napier's Bones when they're arranged in the right order, they help with multiplication and division. [ BLANK_AUDIO ] In 1642, Along Came Blaise Pascal, a French inventor, son of a tax accountant and he invented the Pascaline. The past Colleen could add, subtract, multiply and divide. And the 19 year old blaze was the world's first FinTech disruptor And today in 2019 Google has a quantum computer while very much early days it's still it's no longer a just a theoretical concept. The pace of technology disruption is increasing exponentially and cannot be ignored. Today technology is everywhere, things like cloud and mobile and IOT and big data and artificial intelligence are having a profound impact on our lives and on business everywhere with cloud we now have friction free access to technology which means that whether you are a tiny little fintech startup or you are an enormous bank, multinational, you have access to the same technology resources. And that has done something profound, innovation has been democratized. A 20 year old is sitting in a cafe, maybe right here in Montauk or Southampton and she has an idea for a business. She goes online, she registered it, maybe in Delaware, she logs into her Google Cloud account, she spins up a few VMS, she buys data from alternate data providers. She started building her machine learning algorithms using TensorFlow. And there you go, she has her fintech up and running, and she hasn't even finished her cappuccino. [ BLANK_AUDIO ] Technology is changing the face of finance. Tomorrow's finance won't be about charging fees and holding on to capital for trust. It will be about a world where the cost of transactions are reaching zero. And trust is established through intimacy and transparency and speed. Now, imagine if all trading and payments and settlements and clearings were done in real time. Imagine if company's balance sheets, your balance sheets were updated daily, rather than in on quarterly earnings scores. Imagine if all the risks were being calculated by machine learning models, Taking into account live market data updates, human behavior, weather patterns. Today, we're living through an explosion of data. And it's not just weather and it's not just transactional data. It's things like search trends and commercial transaction data, satellite imagery, foot and car traffic, and shipping locations. But where is all that data going? Nowhere. Unfortunately, it's sitting proprietary databases. It's locked up in spreadsheets and documents and shared drives. But that data can enable you to do an enormous number of interesting things. You know, things like understanding customers better, building better products. Today, the biggest opportunity for most companies is to turn their data into insights and business decisions. And the next big frontier in data and insights is machine learning and artificial intelligence. Now today right now, financial services firms across the globe are using machine learning To do things like improve customer experience through chatbots and multi- channel customer insights and customize product recommendations. In trading desks and hedge funds, they're using ML increasingly for doing things like portfolio construction and hedging strategies. And pretty soon, machine learning will be embedded in every aspect of financial services, reducing costs, improving risks, management, and increasing speed. And at Google, we apply the machine learning to our data centers. Now data centers are core to our business. They make up a healthy portion of our operating costs and also environmental impact. But the equipment, how we operate that equipment and the environment interact with each other in ways that are hard to capture in traditional formula based engineering. Kinda like the financial markets are DeepMind researchers designed a neural network to look at things like sensors from the server racks, Windows chillers and cooling towers, and we were able to bring down our cooling costs by 40 %. Now, imagine if you could bring down your transaction cost by 40 %. I your client on- boarding was 40 % faster, if you could bring down the false positives in your fraud detection algorithms by 40 % [ BLANK_AUDIO ] But AI is not a crystal ball. It's a very powerful tool that gives us scale in solving the world's problems in a way we haven't been able to do before. But technology itself does not create new products, does not streamline your systems And it does not address inequalities. [ BLANK_AUDIO ] Now the fundamentals of AI is training algorithms using vast amounts of data. But the data that we have today could be carrying the biases of our history. And today, Women don't have the same access to capital as men. Today, women on average have higher mortgage rates than men. And today around the world about 1. 3 billion women are not even included in the financial markets at all. Now imagine that data Training the algorithms of tomorrow. [ BLANK_AUDIO ]. AI gives us scale. And it allows us to automate processes and take humans out of the system. But we do need to keep the human in the system. We need to keep them in decision making and we need to keep them in oversight. Because the potential of artificial intelligence is at its greatest when it's paired with human intelligence. That's how we can use artificial intelligence to generate genuine insights and genuine intelligence today. [ BLANK_AUDIO ] 2019 financial institutions around the world are spending billions of dollars on technology. Now, unfortunately, much of that spending is maintaining their legacy systems. Now, the good news is we now have technology that can help change that. Technology like cloud and artificial intelligence and perhaps quantum soon and now imagine it's 2119, 100 years from today. Have you been able to make the right technology investments? To create platforms to give your customers, to give them the intimacy and the transparency and the speed they need. And have you been able to serve those that you are not able to serve today? Thank you. [ APPLAUSE ] [ BLANK_AUDIO ]

Brainstorm Finance 2019: Tech Trends Disrupting Financial Services

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