Fourth industrial revolution and our financial sector

It is very true that, with the passing of time, mankind has searched for new and better ways to live, and as a result, three industrial revolutions have taken place, drastically altering our way of life.  

The fourth industrial revolution (4IR), which has arrived, is based on innovations in artificial intelligence (AI), digitalisation, robotics, augmented reality (AR), genome editing, 3d printing, and other fields.

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The financial sector of Bangladesh has already felt the considerable but varied effects of the 4IR. Blockchain, AI and other innovations have had an impact on the financial sector as well.

THE IMPACT OF 4IR ON OUR FINANCIAL SECTOR

4IR will have a major impact on the financial sector in Bangladesh. A complete transformation of banking and financial institution technology has resulted in more transactions being processed in a given time period and more services being provided.

Properly implemented AI can make risk management easier and more effective. In addition, the combination of these technologies will allow us to perform better analytics, making forecasts easier and more accurate and we can provide services at low cost.

Digital currency is one of the parts of the 4IR though the central bank of Bangladesh does not allow crypto trading as it violates the country's financial regulations. With many developed and developing countries recognising its potential, blockchain technology has become the future of the world in order to achieve the Sustainable Development Goals by 2030.

CHALLENGES

There are many challenges in our financial sector because of the 4IR. One of the biggest challenges is the lack of technical skills in developing countries like Bangladesh.

Before embarking on the revolution, it is necessary to prepare a large number of skilled workers. The need for highly qualified workers is also increasing.

Cybersecurity is the main concern of the financial sector. Since data is stored on servers, adequate security is required. Banks and financial institutions must, therefore, implement sufficiently secure systems before embracing the revolution.

The 4IR poses a significant threat to unskilled and low-skilled workers who may lose their jobs as technology may replace them. Therefore, there is a need to create alternative employment opportunities.

Young people are open to technologies and innovations. However, there are people in their 40s and 50s who do not want changes. When witnessing such tremendous changes in this field, they may not be ready to accept them immediately and some hurdles have been created.

Competition among financial institutions in Bangladesh is fierce. Customers always expect better service, on-demand support, and more. However, it is true that the 4IR and its technologies can have not only negative but also positive impacts on society.

Therefore, when deploying these new technologies, we must also prepare for adverse consequences. However, since the technology is still in its infancy, significant technical and regulatory risks and hurdles will need to be resolved before it can be widely adopted.

The author is a researcher at the University of Bolton, UK