GenAI isn't as smart as you think, we review the 4 top banking trends in 2024, and macro trends matter because fintech doesn't live in a vacuum.
Global cooperation is falling just as we need it the most!
Artwork of the day: Head with Broken Pot, Georgia O'Keeffe, 1943
This image showcases an image of a skull placed in a clay pot that is broken on the side. This painting explains that life comes to an end no matter how good things were. Both the skull and the pot were useful at some point. The owner of the skull died, and the pot was broken. Everything is vanity and comes to an end.
Fierce art today with skulls! Oh my! It just seemed to fit today's themes because "Everything is vanity and comes to an end!" So, let's look at exactly what is coming to an end!
First up is Gen AI, which the BIS has proven is nowhere near as smart as we think. The paper shows how Gen AI is great at regurgitating, but its reasoning skills are severely lacking! I think that GenAI isn’t going the way of the broken pot, but GenAI hype’s time has come!
Then we’re on to a beautifully short piece by KPMG that covers banking trends in 2024, and while the year is just getting started, it’s clear that headwinds will be the norm. Will bank profits go the way of our bleached white skull above?
"Fintech doesn’t exist in a vacuum!" That's why the final two stories in this week's newsletter are about "big picture" macro issues, global risks, and global cooperation. Both are pointing towards a future for fintech that goes far beyond where we are today. Fintech must solve big problems in the next decade, or we’ll all be heads with broken pots!
ChatGPT and LLM's Aren't as Smart as You Think
Leave it to the BIS to once again bring some sanity to GenAI hype. The BIS found a pattern of LLM failure that made it clear that LLMs fall short of the “rigor and clarity” for use in central banking! The same applies to retail banking if tasks with reasoning are required!
Four Macro Major Banking Trends for 2024
KPMG impresses with a blissfully short rundown of the major banking trends for 2024. What I like about them is that they are macro and don’t dwell on GenAI like many others. I find that refreshing! 👉TAKEAWAYS A challenging growth environment The banking sector faces headwinds in 2024: Macro and microeconomic challenges, conflicts, and a US presidentia…
Global Cooperation is Stalling: Be Afraid, Be Very Afraid
Global cooperation is more important than ever, and why the decline in global cooperation metrics since 2020 is of great concern. The world faces poly-crises, problems like war, climate change, and health that all hit at once and will only be solved through cooperation.
Global Risks: Fintech Doesn't Live in a Vacuum
Global Risks abound; this isn’t new, but what is increasingly evident is that the outlook is deteriorating and that no one will escape unscathed. Living standards and development will be challenged on a global scale. I am often asked why I write about global risks and geopolitics and don’t just stick to CBDCs. The reason is clear: fintech and CBDCs don't…
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