Dee McGrath provides a macro view of the core technology themes happening globally in business today. Some of the technology is currently available, while some is on the horizon.

Looking at the types of technology that will impact businesses globally, IBM has identified three core themes that are either currently happening or are likely to happen. These are:

1. Reinventing the core (such as moving from traditional technological platforms to the Cloud);
2. Cognitive computing, such as artificial intelligence; and
3. The arrival of the next generation of technology, such as quantum computing.

With all three themes, Australian and New Zealand continue to be early adopters when it comes to business technologies, including those that will impact financial services.

So, let’s take a closer look at these three technology themes and how they’re likely to impact financial services.

1. Reinventing the core

If you think about traditional businesses, like banks or financial institutions, the large core legacy systems they have been using to date have been fantastic from a robustness perspective. However, the trouble with these large core legacy systems is they are incredibly hard to change, requiring a lot of work and expense to make fundamental changes to how they operate.

What we have seen over the last five to 10 years is the move to the Cloud.This has removed many of the overheads of these legacy systems, making today’s systems more agile, efficient and faster.

Indeed, highly configurable systems is the name of the game, hence the push to Cloud, enabling businesses to configure and change much faster in a streamlined way. Gone are the days of the quarterly release from a technology perspective.

However, as businesses make this shift to the Cloud, there are a whole lot of considerations businesses need to make, particularly around security and configurability, as they deal with operating systems that need to be able to cope with a lot more information, more speed, more agility, and all of the challenges that come with that.

2. Cognitive era

The second theme is the push to the cognitive era. A lot of organisations are doing fantastic work in deep analytics, big data and driving client insights.

Artificial intelligence (AI) is here. AI and cognitive is already being used in call centres to be able to provide responses to either operators for customers or via chat bots online to be able to answer questions.

AI and cognitive ingests a whole lot of data that would take humans months or years to learn, in order to provide these instant responses. We’re taking mass amounts of email enquiries and providing completely automated AI responses that are in context with the enquiry made.

So, cognitive is here. We are seeing fast adoption by businesses and industries in this area.

3. Future of technology

And then there are those technologies that are already here but are continuing to evolve. These include blockchain and IoT (the Internet of Things is the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and network connectivity which enables these objects to connect and exchange data), while brain inspired systems and quantum computing are already on the horizon and probably only a few years away from being rolled out.

Blockchain is very interesting from a financial services perspective. Blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data.

IBM is currently working on a blockchain solution for commercial bank guarantees.

We’re seeing blockchain in food providence, enabling businesses and consumers to track the origins of food and be able to prove their origins, right through the supply chain and across multiple geographies.

We’re seeing blockchain in logistics and supply chain, which traditionally has incredible costs and overheads attached to it. But blockchain will be able to provide the ‘source of truth’, to be able to put a digital imprint, for example, on orchids leaving Singapore to go to Europe, with an eco system of authorised people who can access all of the information and track the shipment.

And IoT comes into play because the aircraft on which the orchids are travelling, have sensors that provide data back to the blockchain to ensure that there are no temperature spikes or drops, ensuring safe delivery of the goods.

Indeed, there are some interesting case studies demonstrating how IoT will continue to develop. For example, a water utility in Western Australia has many thousands of kilometres of pipeline. So, for this company, it’s challenging for it to determine precisely where damage is to any water pipe along its vast network of pipes. But by using IoT, deep analytics and drones to identify potential issues, photographic data is sent back to the company on the pipe lines, where data can be analysed and actioned upon. This means technicians are only sent out when needed for repairs, saving the company time and manpower.

So, the efficiency of what IoT will drive in business and our personal lives will be incredible. This technology is really starting to impact how supply chains and eco systems are operating.

Brain inspired systems

Looking towards the horizon, brain inspired systems and quantum computing will be the next wave of technologies to impact business. However, they are still a number of years away.

With the advent of cognitive, AI, IoT, the proliferation of huge amounts of data, blockchain and eco systems, bringing all these elements together is going to require some serious computing power.

And that’s where brain inspired systems step in.

Brain inspired systems take how our brains are constructed in terms of neural pathways, to come up with the next generation of ‘chip’ or processing power, to be able to take all of that processing power and actually cope with it.

I think in the next two to five years, brain inspired systems will be in mass production. That will help with agility, speed, processing power, and the volume of data in our businesses.

And in terms of quantum computing, quantum computers are incredibly powerful machines that take a new approach to processing information. Built on the principles of quantum mechanics, they exploit complex and fascinating laws of nature that are always there, but usually remain hidden from view. By harnessing such natural behaviour, quantum computing can run new types of algorithms to process information more holistically.

They may one day lead to revolutionary breakthroughs in materials and drug discovery, the optimisation of complex manmade systems, and artificial intelligence. We expect them to open doors that we once thought would remain locked indefinitely.

Quantum computing is currently in an R&D environment and is very much in its early stages. You can actually go online to ibm.com and try out IBM’s quantum computing capability. Quantum computing will eventually provide exponentially more computing power than we have today.

Five areas of advancement

As we think about the change to legacy systems, and providing a more effective customer experience, by providing them with greater insights to give them the ability to make more informed choices, cognitive is at the very core of enabling all of this to happen.

There are five key areas that IBM has identified over the next couple of years where cognitive, IoT, computing power and blockchain will provide significant advancements for businesses and industries. They are:

1. As artificial intelligence continues to take in information and learns more about how our brains and we operate, AI will provide significant advancements in mental health, including how we manage and cope with mental health issues.
2. Hyperimaging will give us incredible vision into things that we don’t even know we should know today. New imaging devices using hyperimaging technology and AI will help us see beyond the domain of visible light by combining multiple bands of the electromagnetic spectrum to reveal valuable insights or potential dangers that would otherwise be unknown or hidden from view. Most importantly, these devices will be portable, affordable and accessible, so ‘superhero’ vision can be part of our everyday experiences.
3. Macroscope technology will use machine-learning algorithms and software to help us organise the information about the physical world to help bring the vast and complex data gathered by billions of devices within the range of our vision and understanding. This is called a ‘macroscope’. It is a system of software and algorithms to bring all of Earth’s complex data together to analyse it by space and time for meaning. It will help us understand the complexity of the Earth, and help us better predict responses like global warming.
4. As nanotechnology becomes more prevalent, it will have a significant impact on the medical industry. Things like AI, IoT and imaging will enable us to do a whole lot more in nanotechnology.
5. Smart sensors will enable us to be able to respond to the things that are happening in the environment more effectively, like detecting environmental pollution anywhere in the world instantaneously.