Question

Note that these technologies like, AI, Bitcoin, Blockchain, High Frequency Trading, etc., are all still emerging and with the exception of high frequency trading, none of them is fully implemented on a widespread basis.

1. What are the constraints?

2. What are the major concerns? For example, what would prevent public from dumping their bank account and working entirely with Bitcoin?

3. Would people be comfortable banking at an institution that replaced human tellers with Alexa?

Answer 1

1. The constraints are related to regulatory approvals and acceptance of them by people. Despite the popularity of bitcoin through the world the acceptance of bitcoin as payment mechanism is still something that not many governments are open to approve. Many central banks have raised concerned about the value of a digital asset which is not backed by any other asset. Even in the field of artificial intelligence there are often ethical question that has been raised with regards to the privacy of data of the individuals. With high frequency trading, many voices have been raised as these firms are putting retail traders at disadvantage and many countries have put additional tax on HFT firms.
2. The major concern with related to these technologies is that people are still not able to trust on them and government is not sure as to what kind of regulatory structure they should put in place to regulate digital payment mechanism. For people to move completely from banks to bitcoin, the most important thing is that bitcoin as a payment mechanism should be accepted everywhere like banks credit and debit cards are accepted. When people deposit their money with the bank, they have certain level of trust that the money kept in the banks is earning a decent level of return as well as the money is safe with the bank and whenever they need it, they can withdraw it. Trust is one the most important thing in the financial system. They also have faith that if bank did something wrong then the government or the central bank is there to protect the interest of the retail investors.
3. People become comfortable with technology over a period of time if helps them in saving cost and time. Adaptation of technology takes little time but once people starts to trust on the technology, they adapt it very quickly. This is the same case with any technology be it with ATM machines or Robo-advisers. The same is the case with Alexa replacing human tellers in banks. Once the automated machine is serving the needs of the customers efficiently and the bank continues to pass certain cost savings to their customers, customers become comfortable using the technology over a period of time.