What we are keeping our eye on in 2020
2019 was an amazing year for Woodhurst as we launched and set a solid platform for growth. However, as we stroll into a new decade, we are more excited to share what we are keeping out eye on in the year to come, and what we think will be likely to affect the business world.
As Boris Johnson secured an outright majority in the election, his promise to “get Brexit done” means that Britain leaving the EU appears to be inevitable (though we shall heed our own advice and avoid making definitive predictions).
Although some say they want Brexit done and dusted so the country can pivot their focus back to the issues that matter, that is somewhat similar to saying they can’t wait for their pregnancy to be over so they don’t have to deal with carrying a child anymore. Once the baby is out, the real work begins.
If Britain leaves the EU, there will be a lot of work to renegotiate trade agreements, immigration policy, as well as work out how cross-border business arrangements. Financial institutions will have to remain keyed in to any changes that may affect them, and bargain for a seat at the table to ensure that what is agreed can ensure the viability of the industry in a post-Brexit world.
For years the race for quantum supremacy has raged behind the scenes as the tech titans have tried to be the first to transition the theory of quantum mechanics into a reality. Quantum machines represent the promise of an exponential increase in processing power that eclipse the capability of today’s super computers in infinite ways. Quantum supremacy is achieved when a quantum computer can crunch a mathematical calculation beyond what a supercomputer today can process. Quantum computers can simulate behavior down to the molecular level which means it can be used in a number of innovative and complex ways. From simulating chemical compounds in electric car batteries, to analyzing compounds in drug manufacturing, or finding optimal public transport routes that would minimize congestion significantly.
One reason this has become such a hot topic beyond the nerdiest corners of the internet is Google’s claim in October that they achieved quantum supremacy. Their machine Sycamore performed a specific calculation in 200 seconds, which supposedly a supercomputer would have taken 10,000 years to resolve. The only problem is IBM refute that this amounts to quantum supremacy, releasing a paper that claims a supercomputer could perform that task in under 3 days.
Whether or not Google’s feat amounts to quantum supremacy, it represents huge improvements in computer processing power that bring us another step closer to operationalizing quantum computers in the near future. We’re watching this space closely as it has the potential to revolutionise artificial intelligence which could quickly change the financial ecosystem.
Farewell to Fossil Fuel Financing
As Europe takes the lead to collectively combat the worst effects of climate change, fossil fuel financing is fast becoming a thing of the past. In November this year, the European Investment Bank announced over the next 2 years it would phase out its multibillion-euro financing of fossil fuels, and transition to the world’s first “climate bank”.
Unfortunately, a new report from the Sierra Club revealed that 33 banks alone have contributed $1.9 trillion in investments to fossil fuel companies since the Paris climate accord in 2015, with increases over the past two years. However, the global momentum is hard to deny, and British private industry has the opportunity to meet the prescient threat of climate change head on. In fact, between July-September this year, Britain generated more electricity from renewables than from fossil fuels, for the first time in history!
We’re looking forward to the 2020 UN Climate Change Conference in November to see the progress committed nations have made and the future pledges they intend to commit.
US Presidential Election
One respite from Britain’s own chaotic political situation has been following our friends across the pond, as the US barrels towards a maelstrom campaign for who will be the next president. Set against the backdrop of an impeachment trial, this season of America is shaping up to be an exciting one.
Importantly, the power of America’s government to dictate international financial regulation and sanctions is why the 2020 election will be significant for British business. From the trade war in China to the Iranian sanctions, the incoming president’s stance on international affairs could be an important factor on how and where financial institutions can operate.
AI Becoming Mainstream
AI is no longer an up-and-coming phenomena: it has up and come. With off-the-shelf AI products to bespoke designs, AI has moved from research and development to operational. This year, we are releasing a white paper on how financial industries can bring AI technologies in-house and get the most benefit for their business and customer needs. Written with the team at Fuzzy Labs, the paper provides a robust blueprint of how banks can implement the technology today.
From personalized customer insights, to automated processes, to mitigate financial crime risks and generating holistic network entities, we believe banks with an eye to the future can kickstart the new decade with a promise to modernize their products, services and compliance.
If 2019 was eventful enough we are sure that 2020 will be a year to remember.