A report by KPMG shows what banking might look like in 2030: technology will enable a 'virtual assistant' to take care of all financial matters while managing our health and social lives at the same time.

Meet Eva: Your Enlightened Virtual Assistant is a report about the future face of invisible banking. It envisages a future – in 2030 – in which banking will be “just as invisible, but just as vital, as the manufacturers of 4G base stations are today”. It gives the example of 'Eva', the 'enlightened virtual assistant', which uses advanced data analytics, voice authentication, artificial intelligence, connected devices, application programming interface (API) and cloud technology.

Eva is a platform that has access to all your individual apps, including banking apps, fitness and diet apps, music, contacts, calendar, etc. So she knows all about your work hours and social commitments, your financial situation, your fitness and exercise routine, heart rate, spending habits (and therefore eating habits), etc. The platform can move money around in your accounts to get the best savings rates or deal with unexpected charges.

Invisible banking merges with all areas of life

The graphic below illustrates how customers will only really see the interfacing applications that communicate with them, while the financial processes (and some of the decision-making) take place 'below the surface'.

Source: KPMG

Key points in KPMG report

Some of the salient points from this report show how banks are likely to change in future:

• in 2015 only one million customers moved current accounts – thats 2 per cent, compared with 32 per cent in car insurance;
• customers are increasingly using other channels to fulfil functions previously dominated by banks, such as Apple Pay;
• technology hardware is a global business whereas banks are becoming increasing national;
• large parts of the traditional bank – customer service call centres, branches, sales force, IT, swathes of the back office – are likely to disappear;
• customers have bespoke financial needs and don't necessarily fit into the categories defined by financial products;
• banks will face competition from a range of industry-wide solutions in payments, settlements, core platforms, client on-boarding, know your customer (KYC), etc.;
• the winners will be those with a low-cost environment and advanced data/credit science.

Massive systemic risk

However, customer-interfacing platforms such as 'Eva' pose huge systemic risk. The report says: “To date, regulators have been reluctant to give even informal comfort on the use of artificial intelligence. The FCA’s sandbox might be a way to take a step in this direction. And the blending of banking with other aspects of day-to-day life blurs the lines of consumer protection regulation.”

The report notes that banking is only 10 per cent through its journey of change and that what it will look like by 2030 still remains to be seen.

Does this model fit corporate treasury?

While the example given in KPMG's report applies to consumers, it has great relevance to the corporate treasury function and could perhaps be even more game-changing than for individuals. An 'Eva' for corporates could be integrated across all business units and indeed across the whole supply chain, making adjustments to liquidity levels, moving cash to where it is needed or where it can earn interest, adjusting exposures to certain currencies in line with the business needs, or monitoring for suspicious behaviour and detecting financial fraud, to suggest just a few areas where Eva could work for corporates. This could really free up the corporate treasurer to work on strategy and financial relationships.

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CTMfile take: This scenario is very attractive and could well do many financial professionals out of a job. However, regulation is a massive hurdle that the financial and fintech industries will have to solve before producing platforms such as Eva.