5 Takeaways from the 2016 Milken Institute Global Conference

I had the privilege of attending the 2016 Milken Institute Global Conference last week in Los Angeles, on the theme of the Future of Humankind. 

Although a very broad range of topics were discussed, both on panels and in the corridors of the Milken Global Conference, here are five takeaways that I found personally interesting and which could potentially benefit a broader audience.  

1. (Human + Artificial Intelligence) > (Human) + (Artificial Intelligence)

Artificial Intelligence (“AI”) will have a game-changing impact on different aspects of our lives in the coming years. AI will not replace human beings but will generally be a positive change that will empower people in ways that will make us more productive, with the combination of human and AI working together being greater than the stand alone potential of human or AI taken separately.

Any industry in which knowledge and data are used will benefit greatly. Good examples include the medical world (e.g. to assist doctors in analyzing images and test results), agriculture (e.g. to help predict where to water crops), elderly or rehabilitation care (e.g. to provide companionship, help overcome PTSD) or finance (e.g. in big data analysis, research).

2. A New Category of “Independent Workers” for the Sharing Economy

The Uber, Lyft, Airbnb or TaskRabbits of this world are becoming the new normal. Although their impact in traditional economic metrics (e.g. GDP, productivity) is still minimal (with only 0.4% of the total employment in the U.S. currently engaged in the online gig economy), their influence on society and work is uncontestable.

However, the overall labor framework or legislation has not yet adapted to this new reality. For example, it was suggested that we should perhaps create a new category of “independent workers” who currently fall in the gray area between traditional employees and independent contractors –  they would get some of the rights and benefits generally provided by employers but wouldn’t be eligible for overtime or unemployment benefits.

3. We Need New Skills to Stay Employed in the Future

We need to radically rethink the skills we equip our students and current workers with, to ensure that they can adapt to the reality of the new workplace. With the rise of AI, the skills taught today may be irrelevant in the near future. We should instead focus on creativity or other “soft” skills, hence the importance of putting a new emphasis on design and creative thinking as well as programming and entrepreneurship in our academic and training frameworks.

4. FinTech and Innovation in Banks

Not only will there be substantial job losses in the banking industry but we will see systemic shifts in the provision of financial services with the rise of FinTech. Banks will need to seriously rethink how their IT budget should be allocated as the vast majority of IT staff and budgets are currently dedicated to maintaining legacy systems.

The smart incumbent banks are the ones that will work closely and partner with FinTech start-ups, instead of trying to innovate internally as most not only don’t have a culture of innovation or a well-established process of innovation but also lack the budget to absorb the ongoing cost of innovation and its inherent failures. Thus the importance of partnering with external FinTech firms or more established large tech players.

5. Radical Rethinking of Global Sanctions and AML/KYC Needed?

The current sanctions mechanism in place as well as AML and KYC policies are often dysfunctional and not effective. Merely writing additional rules and throwing in resources with a lack of serious coordination will not solve the problem. We should look instead at how we can reduce such KYC costs, avoid multiplication of the work or outsource it based on the latest technology.

Solutions include using AI that can sift through the data way more effectively than can compliance staff, or the implementation of blockchain technology to conduct KYC checks. An additional suggestion is to focus on individuals we know to be on sanctions lists and spend time and money focusing on them rather than simply putting in place policies that are often proving less effective than they should be.

***Henri Arslanian is the Head of Corporate Development and Strategic Partnerships at APrivacy, an award-winning data security FinTech firm . He is also an Adjunct Assistant Professor at Hong Kong University’s Masters in Finance program, where he teaches graduate courses on FinTech and Entrepreneurship in Finance. He previously spent many years with UBS Investment Bank in Hong Kong and started his career as a financial markets and funds lawyer. A member of the Milken Institute Young Leaders Circle, Henri is a regular speaker on the topic of FinTech and currently sits on a number of other finance, academic, civil society and FinTech-related boards and advisory panels.

Other  articles from the author include:

– 10 FinTech Predictions for Asia in 2016

– Why We Need to Teach FinTech to Finance Students