Money Management On Auto Pilot

What if all your banking and financial needs were conducted automatically without the need for human interaction, and without ever having to enter a physical bank?  Sounds Sci-Fi right?  It is coming.  

What is a Self Driving Bank?

Artificial Intelligence, combined with Blockchain, allows virtual money managers to work on your behalf and accomplish all of your financial tasks and goals.  Software and algorithms can automatically pay your bills, transfer money, be trained to understand your financial goals, and accomplish larger financial tasks such as taking out a loan or investing on your behalf.  Computers can search the world for best interest rates, find the lowest loan rates, or calculate high risk vs low risk investments within minutes.  Expensive middlemen costs, such as investment broker and loan officer fees, would be eliminated or drastically reduced.  This can all be accomplished in a decentralized environment, thus eroding the need for the traditional banking system as we know it.             

What Pieces Make Up Self Driving Banks?

We already have the components of self driving banks in place right now.  For example...  

1) Interest -   Companies are willing to pay you excellent interest payments if you are willing to park your money with them.  They can then lend your money or provide insurance for the overall crypto markets.  Basically, you are adding liquidity to the lending and insurance markets.  As a reward you are paid handsomely on a daily, weekly, or monthly basis.  Some examples that currently accomplish this service are, Compound, Blockfi and Celcius. 

2) Lending - Without the need for expensive buildings or middle man services, companies can offer inexpensive and competitive loan rates while never having to talk to a loan officer.   Basically funding for your loan is accomplished by tapping into existing liquidity pools.  Therefore, you do not need to qualify for a loan or provide large amounts of personal information.  Simply borrow against your collateral and away you go.    

3) Exchanges - Stock exchanges trade businesses.  Crypto Exchanges trade crypto assets.  Both can be represented digitally on a blockchain and therefore will eventually be traded and exchanged interchangeably.  Being able to trade from one asset to another will no longer needs to be done through a centralized brokerage company with high fees.   Admittedly, this does have to be developed quite a bit but the writing is on the wall.   

4) Derivatives -  Option contracts, credit swaps, and many other forms of assets can be traded digitally.    There is literally TRILLIONS of dollars that are represented through derivative contracts and almost all of these can be written with smart contracts that are executed through a blockchain.  In other words, no need for a broker or middleman to trade them for you.

5)  Insurance - Similar to how Interest and ending works in the example above, there is also a fast growing market for insurance in digital finance.  Companies will pay investors healthy rewards to create a liquidity pool from which funds could then be used to provide insurance for various reasons.  Several projects are already actively providing these types of insurances.     

6)  Payment Services - Making automatic bill payments and digital money transfers have been around for a long time.  In addition, services that are able to accept digital currency payments for goods/services also are nothing new.  These types of services will be used to connect your self driving bank accounts in the future.   

7) Taxes - Tax software companies like Turbo Tax and Token Tax will allow virtual money managers to do your taxes for you.  Won't that be nice???!!! (I am smiling as I write this!) Imagine your virtual money manager tracking your transactions and investments for the year and then at the end of the year doing all of your taxes for you!  What a cool concept.    

Bringing All of These Together

Self Driving Banks would take all the existing technologies listed above (and others not mentioned) and combine them through technology.  Your virtual money manager, supported through Artificial Intelligence, would learn your financial habits, compile your financial goals, offer suggestions, search for the best services, and unemotionally carry out your financial plans 24 hours a day 7 days a week.  You would have access to the whole financial world without ever having to leave your room or meeting with a financial advisor!  Sounds a little creepy but it is where we are headed.  Unlike Baby Boomers, Millennials want these types of services.  

Extra Benefits of Self Driving Banks

- Interest rates earned in your bank accounts would automatically be determined through supply and demand, not artificially manipulated through government financial policy.

-Ends Lending Discrimination

-Reduces Fraud & Corruption

-Cuts expensive middlemen cost.  (Brokers, Lenders no longer needed to get loan)

-It is easier to supervise software than people.  

Some Risks of Self Driving Bank

-Fluctuations in volatility increased or decreases liquidity

-Very little regulation and legal clarity

-Less personalized customer service.

Conclusion:  

Admittedly, having fully automated self driving banks are still a little ways off.  However there are already existing companies that are successfully accomplishing some of these ideas and it is only a matter of time before services like this start popping up around us.  The concept is very interesting and is probably worth developing further.  So I am curious, would you use a self driving bank?  Please leave your thoughts and comments below.  I would love to hear your ideas.    

Suggestion:

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