As one of the most ancient tenets of human societies, money and finance have been constantly evolving with advances in technology and science. As technology continues to take leaps and bounds and permeates every aspect of life, we can expect banking and finance to change.

So, how will technology transform financial services in the next few years? We asked experts to share their perspectives, and here are five trends we think are worth watching. 

Natural language processing

The past decade has seen tremendous advances in natural language processing, the field of artificial intelligence that extracts meaning and context from spoken and written language. Natural Language Processing (NLP) provides an unprecedented opportunity to obtain value from Word and PDF documents, emails, chat logs, social media posts, and the vast amounts of unstructured data that constitute much of the web.

In the world of finance, we’re already seeing the benefits of natural language processing in banking chatbots, legal document scanning, and other applications. But the best is yet to come. 

“Customers already interact with banks using unstructured data today (e.g. providing a scan of a passport, a salary slip or annual report for a loan application),” says Dennis de Reus, Head of Artificial Intelligence at ABN AMRO. “I expect we will see a lot more applications of AI within the existing processes. Looking further out, I think the role of external unstructured data will grow, for example, by taking into account recent news articles to prevent fraud or other criminal behavior by clients.”

“In the future, AI will support every customer interaction,” de Reus adds. “It will connect you to the best person, it will make personalized suggestions to ABN AMRO employees on the best answers for your question, it will suggest personalized/bespoke solutions, it will automatically summarize your conversation and send

  • Centuries of discrimination have created a cavernous wealth gap between Black and white Americans. 
  • Today, Black Americans own an estimated one-tenth the wealth of white Americans — $17,150 for Black families compared to $171,000 for white families.
  • This gap is not only bad for Black people, it’s bad for the US economy, too.
  • Researchers estimate that the racial wealth gap has cost the US economy $16 trillion since 2000. If the gap closed today, the GDP would see a $5 trillion boost in the next five years.
  • Read more stories from Business Insider’s “Inside the racial wealth gap” series »

Since the start of slavery, racism has cost Black Americans an estimated $70 trillion. Today, thanks to centuries of discrimination, the racial wealth gap between Black and white Americans is cavernous.

In 2016, the Brookings Institution estimated that Black Americans own about one-tenth the wealth of white Americans — $17,150 for Black families compared to $171,000 for white families. The gap persists at every income level: Among the top 10% of earners, the median net worth of white families is $1,789,300, whereas a Black family earning the same income has a median net worth of $343,160.

It goes without saying that this is bad for Black families and individuals. But this type of racial inequality is bad for the broader US economy, too.

What the racial wealth gap costs the US economy

In a Zoom panel discussion hosted by Business Insider last month, experts from a variety of fields — higher education, business, and financial planning — discussed the costs of the racial wealth gap and how to close it.

Dania Francis, an assistant professor of economics at the University of Massachusetts Boston and co-author of “The Economics of Reparations,” illuminated the cost of racial inequality to the US economy.

The yield on Italian 10-year
TMBMKIT-10Y,
0.680%

and 30-year
TMBMKIT-30Y,
1.529%

debt fell to record lows on Monday.

As this chart from Deutsche Bank shows, the yield on the Italian 10-year is lower than it was even before Italy became a country. Deutsche Bank strategist Jim Reid attached proxies for Italian debt, such as from Naples, to chart pre-1861 data. (There is also a gap in the data series for the 1700s.)

He also charted debt-to-gross-domestic-product, which shows the Italian economy with an all-time low capability to service that debt.

The move on Monday came after the European Central Bank’s chief economist gave an interview suggesting the central bank may take further action. Among the ECB’s actions stimulus so far is the purchase of government debt from countries including Italy, through what’s called the pandemic emergency purchase program.

“Has the ECB permanently suppressed yields and spreads or are there many more twists and turns to this story over the years ahead? I would lean towards the latter but for now Italian politics and their control of the second wave are acting as strengths and not weaknesses,” Reid said.

David Stockman, the former Reagan-era budget director and acerbic critic, looked at the same chart and issued this brief but withering analysis: “when central banks crush rates, politicians bury their governments in debts.”

The current explosion in debt-to-GDP has been because the latter dropped, precipitously. The Italian economy shrank by 18% year-over-year in the second quarter.

Italy also has been issuing more debt. According to Italian bank Intesa Sanpaolo, Italy is forecast to issue a net €177 billion in new debt in 2020, compared with €54 billion in 2019.

Source Article

By Yilei Sun and Brenda Goh



FILE PHOTO: The GM logo is pictured at the General Motors Assembly Plant in Ramos Arizpe, Mexico


© Reuters/DANIEL BECERRIL
FILE PHOTO: The GM logo is pictured at the General Motors Assembly Plant in Ramos Arizpe, Mexico


BEIJING (Reuters) – General Motors Co’s (GM) vehicle sales in China grew 12% over July-September versus the same period a year earlier, the Detroit automaker’s first Chinese quarterly sales growth in two years. The second-biggest foreign automaker in China by units – after Germany’s Volkswagen AG – said on Monday it delivered 771,400 vehicles in China in the third quarter. That followed a second-quarter fall of 5%.

GM has a Shanghai-based joint venture with SAIC Motor Corp Ltd making Buick, Chevrolet and Cadillac vehicles. It has another venture, SGMW, with SAIC and Guangxi Automobile Group, producing no-frills mini-vans and which has started manufacturing higher-end cars.

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China sales of mass-market brand Buick rose 26% in the third quarter, GM said in a statement. Sales of its mass-market Chevrolet marque fell 20% whereas those of premium brand Cadillac jumped 28%.

Sales of no-frills brand Wuling grew 26%, whereas those of mass-market Baojun vehicles tumbled 19%.

GM has seen its China sales suffer in a crowded market and slowing economy. To revive its fortunes, it wants electric vehicles (EVs) to make up over 40% of new launches over the next five years in China, where the government promotes greener cars.

The automaker’s Wuling Hong Guang MINI EV, a micro two-door EV with a starting price of 28,800 yuan ($4,200), was China’s biggest-selling EV in August.

GM’s sales in 2019 fell 15% from a year earlier to 3.09 million vehicles. The automaker delivered 3.65 million vehicles in 2018 and 4.04 million units in 2017.

(Reporting by Yilei Sun and Brenda Goh; Editing by Christopher Cushing and Jacqueline Wong)

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(Bloomberg) —

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National Commercial Bank, Saudi Arabia’s largest lender by assets, agreed to buy rival Samba Financial Group for $15 billion in the biggest banking takeover this year.

NCB will pay 28.45 riyals ($7.58) for each Samba share, according to a statement on Sunday, valuing it at about 55.7 billion riyals. The kingdom’s sovereign wealth fund, the biggest single shareholder in the two banks, will have the largest stake in the combined entity with 37.2%.

The new bank will have total assets of more than $220 billion, creating the Gulf region’s third-largest lender. Its $46 billion market capitalization nearly matches that of Qatar National Bank QPSC, which is still the Middle East’s biggest lender with about $268 billion of assets.

Banks in the oil-rich Gulf have been combining as regional economies suffer the twin shocks of lower energy revenues and the global coronavirus pandemic. The Saudi consolidation also coincides with a long-awaited wave of banking mergers in Europe, where lenders are exploring tie-ups or have begun taking over smaller rivals.



chart: New Pecking Order


© Bloomberg
New Pecking Order

“Under NCB’s management, better value should be realized from Samba’s over-capitalized assets,” CI Capital analysts including Sara Boutros said in a note to clients. “The deal also provides NCB with a larger capacity to grow more aggressively, particularly in the corporate space, as the market stabilizes and as lending opportunities emerge.”

Read more: Moody’s Sees Virus and Oil Shocks Speeding Up Gulf Bank Mergers

Merging two major domestic banks is a key component of Crown Prince Mohammed bin Salman’s “Vision 2030” initiative to diversify the Saudi economy away from oil by creating local champions in industries such as finance. Besides the Public Investment Fund, the largest shareholders in the combined NCB-Samba entity will include the Saudi Public Pension Agency, which will own 7.4%,