Goldman Building Own Robo, Uncanny Valley Realistic Chatbots, Corporate Venture Saturate Insurtech — Autonomous ?NEXT

Hi fellow futurists -- here are our top 3 favorite developments. If you enjoyed this newsletter, please share with others!

Goldman Building Own Robo.  Social media is abuzz with news of a Goldman Sachs job posting. This one isn't for a new CEO, but for a programmer to build out Goldman's proprietary digital advice platform. The tidbit is interesting for 2 reasons. First, Goldman had previously purchased Honest Dollar in what was thought to be its roboadvisor acquisition. Perhaps it was the wrong one. It was also an early investor in Motif, another online investments provider, which has pivoted around advice several times. Goldman has since partnered with both Motif and Betterment on delivering digital advice services.

Second, this is part of a broader trend of democratisation for the Goldman brand. They had recently launched a digital lender called Marcus, akin to Lending Club, and that has performed well with the target audience. Because the firm has deposits, they can compete favorably and be more stable than the Fintech startup approach. No need to find external investors to fund the loans. Robodvisor launch could be analogous to this experiment, especially if going retail has not hurt their brand.

Source: Goldman Sachs

Uncanny Valley Realistic Chatbots. Why should we analyze virtual reality, the attention economy and preferences of the Millennials generations (including their addiction to video games) when thinking about financial services? Here is an example. A startup called Soul Machines has combined the functionality of chatbots, which includes natural language processing and machine vision, with hyper-realistic renderings of human faces. These virtual assistants can model facial expressions and read the facial expressions of their counterparties through machine learning image recognition techniques. We have covered before that speech generation (not using recorded voices but manufacturing human speech sounds) is around the corner as well.

To see the video in action click through the image below or on this link. Does it creep you out to have the bank teller, investment advisor, insurance agent or lawyer replaced by a 3D-rendered head connected to automated knowledge? If yes, welcome to the uncanny valley, a term for near life-like simulations that don't quite hit the mark. But note two things. First, Millennials have spent the last 20 years training how to interact with such characters in video games, such as Mass Effect. And second, virtual reality and augmented reality are scanning physical reality into 3D environments using photogrammetry, and we will soon forget the difference.

Source: MIT Tech Review, Soul Machines

Corporate Venture Saturates Insurtech. There is no doubt that Insurance, and its early stage innovation field Insurtech, are enormous markets, revenue pools, and opportunities for entrepreneurs. But something new is happening. In a recent KPMG survey of 200 insurance executives, 50 said that they had corporate venture capital arms, with half of those having $250 million of powder. Across every category and business model, venture investment in Insurtech is seeing massive interest from incumbents. From firms like AXA, which have been investing for years and are involved in blockchain, to firms like Aflac that are just launching their early stage venture efforts, corporate Insurtech venture is looking like a very busy space. Is it too saturated?

It is true that entrepreneurs are bringing innovation to the ecosystem, and incumbents can transform themselves and take part in the innovation through early stage investment. It is easier to allocate cash and make investment decisions (something Insurance companies should be good at) than recruit PhD hipsters and build cloud software (far less good). However, should core research and development really be outsourced this way? What is missing in our financial institutions that they struggle to adopt and operate on customer-centric, mission-based standards that inspire young technical people to build projects inside this structure? Corporate venture is a step in the right direction, but we need operating business transformation. What happens to the incumbents when everyone is outsourcing core innovation?

Source: KPMG, Digital Insurance (Source Media)

Deeper curation of our themes is below, and this week’s artist excerpt is Paul Klee, 1915. Thanks for reading!

Best,

Lex Sokolin

#Roboadvisor 

• Why it's so hard to win millennial clients. A great deep drive on how young people think about financial advice and the use of technology. Will it be Betterment, Acorns, or a bionic advisor?

#Blockchain 

• IBM Goes Live With First Commercial Blockchains. The use cases of identity management and carbon credit trading are now in production on Hyperledger Fabric. 
• Introduction to Ethereum, slides by Alex Fisher. Interested in a quick business-friendly overview of how Ethereum is becoming the world computer?
• Private equity: not so quick out of the blockchain. Why would PE administration lag behind, despite the Northern Trust pilot?

#ArtificialIntelligence

• Google Team Refines GPU Powered Neural Machine Translation. With specialized neural network hardware, can Google replace all translators with automation?  
• A Teenager Built An AI Bot That Raps Using Kanye West Lyrics. Will celebrities be out of a job once they create a corpus of work that AI can digitize?

#Neobanks 

• Tandem rocked by ￡29 million funding halt. How will the cancellation of this cash injection impact the growing neobank?
• Starling Bank, a digital-only UK challenger bank, launches beta. How will this new entrant coexist with other banks and neobanks, and where do biometrics fit in?

Financial #APIs and Banks-as-a-Service

• Capital Markets Undergo ‘Generational’ Change. How will MiFID II lead to the unbundling of research and trading, what what technology solutions are in place for the transition?

#Chatbots & Voice

• Global Digital Assistants Use by Platform. Will 5 million voice assistants be in use by 2021 as Juniper Research predicts?

#Regtech, #Crowdfunding

• OCC Forges Ahead With Fintech Charter, Releasing Draft Licensing Manual Supplement. The US banking fintech charter is on its way, without light touch or sandbox -- can it do anything meaningful for the startup community?

#Bitcoin & Cryptocurrency

• Bitcoin’s civil war threatens to blow up the cryptocurrency itself. The fighting between Bitcoin Core (more power to developers) and Bitcoin Unlimited (more power to the miners) continues, unavoidable due to the cryptocurrency's technical limitations. What will it do to Bitcoin, and what are the second order implications?

#Insurtech

• Lemonade Is Using Behavioral Science To Onboard Customers And Keep Them Honest. Can humans design away failures in complex decision making through software?
• Fabric Launches to Serve the 37 Million American Families Without Life Insurance. Will life insurance for $6 per month help 37 million uninsured American households make the jump?
• How Tech Will Propel Asia’s Insurance Explosion. Who are the biggest Insurtech names in Asia and what's their gameplan?

#AttentionEconomy

• Google's Home Assistant Is Now Playing Ads. How quickly will the attention economy extend from what we see and choose to use on the web, to the background conversation of our daily lives? And do we want it?
• Ev Williams has lost his mind. Medium was founded as a publishing platform for the new internet. Will its new $5/mo business model undermine its mission?

#VirtualReality & #AugmentedReality

• Walmart Focuses On Future of VR/AR at New Silicon Valley Tech Incubator. What will the shopping and payment experience of the future look like in an augmented reality world?

#InternetOfThings

• Bosch will sell Nvidia’s self-driving system to automakers. "Using Nvidia’s DRIVE PX AI car computer, Bosch will build automotive-grade systems for the mass production of autonomous cars,” said Nvidia founder and CEO Jen-Hsun Huang in a press release.

Want to receive this newsletter in your inbox? We follow #fintech, #blockchain, #roboadvisors, #artificialintelligence, #neobanks, #regtech and #insurtech. Click here to subscribe to Autonomous NEXT or follow us at @autonofintech and @lexsokolin. Readers can also reach us at [email protected]. 

This content is not investment research, investment advice and is not intended to lead to a transaction (see disclosure).