GarryP

To me there is a tipping point issue when machine shall talk unto machine.

So, for instance, imagine an AI money manager service that moves and shifts your money around to maximise return, flexibility, tax avoidance, etc. - makes sense right?

Now imagine that the offerings of the banks and financial institutions are similarly automated to maximise their desirability and tailoring to your AI derived needs - and profit for the institution. There is a two way flow of info that results in the agreed personalised contract between entities. Changing second by second.

At that point you can no longer negotiate your own deal, or even select from canned entities, since it will always be less optimal than the AI derived one. They are literally speaking a different language.

The game has shifted and now 100% of such discussions happen between computers. Your money could be anywhere in the world, and could be moving much faster than before - jumping in response to your actions, the news, everything.

Bank Accounts 2.0

A run on the banks is over before anyone human realises it. A run on the country similarly. And if you try and put circuit breakers in there, it's considered suboptimal for returns and the country is avoided.

THAT'S the world we are headed for.

Shard

Actually, a run wouldn't occur because the machines are rationale. But I like the general picture you've painted. Already our money is all over the world, working fast, and most of us have a only a rudimentary idea of what markets we are invested in. I think the whole concept of money will have to change by mid-century (or certainly late century) as the machines will indeed be running the economy.

Beoz

The is nothing new. Banks have been shifting their staff for decades since paper money and cheque books become obsolete and the ATM was invented. Now the ATM is threatened by tap and go and mobile banking.

But we have been down this route before and have established that banks are indeed keen to keep a live, interactive, presence where the upsell is king. Rural banks without much foot traffic are likely to shut where as smaller retail branches in areas that have a lot of foot traffic and where people have a lot of money are likely to grow. Makes sense right? How can I best get hold of your cash and make money out of it.

The NAB story is just catch up. Other banks have already shifted their tellers into customer service agents or financial planners, or concierges in the customer facing environment. NAB haven't and are facing their Kodak moment - its all catch up.

Forget the 6000. They have been dead men walking for years. Its the 2000 (then the rest they will hire) over the next 10-20 years when they realise what they have been doing wrong. Focus on the big picture.

Ok don't believe me.

The banks in Australia have generally been reluctant to dispel further closures. And it’s clear they wish to move much further into technology-based solutions. However, there appears fairly wide acceptance among the banks that branches and personal contact still have an important role to play. This means branches are likely to keep evolving into smaller outlets focusing on sales and more complex transactions, while banks focus on other technology solutions as they evolve.

Beoz

All of this can already be done today.

The problem is, it leaves a digital foot print.

It also allows for digital blocks. You want to bring $1,000,000 into this country? Why?

Shifting money digitally has always been easy. Explaining it and circumventing systems is not.

Skynet finance. Ho ho ho

GarryP

I think a run would be more likely because the situation is more unstable, and the money moves faster. So if, for instance, it becomes clear that a swathe of government MPs have lied and are going to be kicked out, meaning the government will fall, meaning policy might change, then the 'reliability' score for the whole country would change, and the AI algorithms would kick in and shift money out to the new safest bet.

The point I was making with the example however was that there is a real tipping point when it becomes a machine-only game - where humans can't play.

Think of fighter jets. They switched over to fly-by-wire and computer control to get agility, and now the pilot cannot fly the plane, just provide suggestions to the automation as to which direction they'd like to fly.

That's going to happen across whole industries - going from 100% human to 100% machine over a timespan of a few years. The S-curve is going to be steep - faster than politics can react.

And I'm beginning to think that the real lesson of the russian interference in the US election is that politics itself is on the cusp of that same transition (mainly because politicians are so clueless). Puppeteering elections via AI, then puppeteering policy via money (like the kochs).

And finally, economics as a subject is full of charlatans and bullsh*t - repeating patterns someone spotted in some data 50 years ago. AI is good at learning patterns - probably already better than economists. Put the two together and you have Economics 2.0 where only AI can understand and play the market and whole national economies. Where your microsoft shares could go to zero in a minute, and you have no idea "why?" - but the only correlation is the price of coffee beans in Guatemala rising 5%.

I have the feeling things are going to get weirder.

Shard

That sounds like full Skynet mode. I think either humans will still reserve a degree of control (as current automated tradings systems have with cut offs at defined volatility levels) or the AI system will be so pervasive that it would seek to avoid potential risk before it even happens. I don't envision AI competing against AI, that's what we organics do in the world of imperfect and historical information. An AI will just allocate resources rationally.

GarryP

Now you are getting why I think the likes of Stephen Hawking and Elon Musk are worried about AI. It's nice to think you can throw 'cut offs' in there, but when they system relies on AI to work, and has to work, you can't really have cut offs.

Want the real fun bit? Even now, with the simple automation that exists, 'trading pauses' accelerate volatility, not reduce it.

I think economists still say they think the market acts rationally. Acting rationally doesn't preclude enhanced volatility, and what looks like chaos. Local rationality caused the GFC.

Beoz

Actually, its the people who are clueless. Social media allows the drama issues to come to the fore, and the big issues to be surpressed. People like the drama.

Trumps continued success is all based on basic sound bites. Sound bites the clueless can understand. He knows the key to success is to stay in the news.

Same with the Labor party and the Mediscare scandal. They keep popping them out.

Then you have the people. Any old person can have a voice now which is a good democratic thing. Previously there was no voice.

And of course this is already being managed by algorithms.

Nothing new here.

Beoz

Elon Musk and Stephen Hawking. Their marketing is all about the drama just like Trump and Shorten and they have you hook line and sinker.

Beoz

Well hello. He can't do any wrong. Yes he can.

http://www.smh.com.au/business/innovation/time-is-ticking-musk-in-eighth-hell-as-model-3-problems-burn-other-projects-20171102-gzdzvn.html

Shard

It's a minefield out there. Good points.

Shard

Musk, maybe. Hawking, he's a pure academic so no drama is intended.

Beoz

Nah. Hawking loves the limelight too. If he didn't we wouldn't here from him. He also loves the ladies. He is a drama queen.

Shard

Ok. Hawking: undecided.

Shard

I suppose it happened to gas lamps, phone boxes and next on the scrapheap ATM's.

https://www.theguardian.com/money/bl...isk-of-closing

I think cash will be around for some time more, but once contactless pay is dully deployed and used, cash will become an over the counter service to discourage ATM use.