10.3 Science and Health, Fueled by Big Data
201
health system can only be sustainably improved, if there is a reasonable involvement
of the patients.
10.4 Banking and Finance
The financial sector has been in turmoil since a long time. This is probably best
illustrated by the latest financial crisis and by new phenomena such as flash crashes,
which can wipe out almost $1 trillion of stock market value in a couple of minutes,
as it occurred on May 6, 2010.
5 These flash crashes are considered to be a side
effect of algorithmic trading. In fact, about 70% of all financial transactions are
now autonomously performed by computers, whereby markets are continuously and
automatically monitored for potential opportunities. An entirely new financial business model based on high-frequency trading has emerged, which has undermined
the foundations of traditional financial investments.
There has also been an explosive expansion of shadow banking and the market
of derivatives.
6 In many cases, derivatives have replaced insurance contracts. They
have entirely transformed the insurance business and the way real estate is financed.
7
Furthermore, payment processes and money are also undergoing a transformation.
While most financial transactions were based on cash or bank transfers in the past,
they are increasingly being replaced by credit card payments and systems such as
Paypal, Google Wallet or Apple Pay.
Furthermore, we see a trend towards microcredit, peer-to-peer lending and peerto-peer money transactions, be it through BitCoin, P-Mesa or other means. Hence,
the trend is towards decentralized approaches, where banks are not needed as intermediaries anymore. Monetary transactions are directly executed between people.
This may be seen as a response to the failure of banks to provide a good service for
everyone, evidenced by the unaffordability of loans and private homes for a broad
range of companies and people. Some people even think the latest financial crisis,
by far the biggest ever, was a direct result of the digital revolution. This is, because
interactions based on trust were replaced by credit default swaps and other financial derivatives, which sought to insure traders against high losses. In the future,
banks and other companies will certainly have to pay more attention to trustable
products, procedures, and systems to be successful.
5 See https://en.wikipedia.org/wiki/2010_Flash_Crash.
6 In finance, a derivative is a financial product. Its worth is derived from its underlying assets, indices
or interest rates.
7 And ultimately triggered the financial crisis.
201
health system can only be sustainably improved, if there is a reasonable involvement
of the patients.
10.4 Banking and Finance
The financial sector has been in turmoil since a long time. This is probably best
illustrated by the latest financial crisis and by new phenomena such as flash crashes,
which can wipe out almost $1 trillion of stock market value in a couple of minutes,
as it occurred on May 6, 2010.
5 These flash crashes are considered to be a side
effect of algorithmic trading. In fact, about 70% of all financial transactions are
now autonomously performed by computers, whereby markets are continuously and
automatically monitored for potential opportunities. An entirely new financial business model based on high-frequency trading has emerged, which has undermined
the foundations of traditional financial investments.
There has also been an explosive expansion of shadow banking and the market
of derivatives.
6 In many cases, derivatives have replaced insurance contracts. They
have entirely transformed the insurance business and the way real estate is financed.
7
Furthermore, payment processes and money are also undergoing a transformation.
While most financial transactions were based on cash or bank transfers in the past,
they are increasingly being replaced by credit card payments and systems such as
Paypal, Google Wallet or Apple Pay.
Furthermore, we see a trend towards microcredit, peer-to-peer lending and peerto-peer money transactions, be it through BitCoin, P-Mesa or other means. Hence,
the trend is towards decentralized approaches, where banks are not needed as intermediaries anymore. Monetary transactions are directly executed between people.
This may be seen as a response to the failure of banks to provide a good service for
everyone, evidenced by the unaffordability of loans and private homes for a broad
range of companies and people. Some people even think the latest financial crisis,
by far the biggest ever, was a direct result of the digital revolution. This is, because
interactions based on trust were replaced by credit default swaps and other financial derivatives, which sought to insure traders against high losses. In the future,
banks and other companies will certainly have to pay more attention to trustable
products, procedures, and systems to be successful.
5 See https://en.wikipedia.org/wiki/2010_Flash_Crash.
6 In finance, a derivative is a financial product. Its worth is derived from its underlying assets, indices
or interest rates.
7 And ultimately triggered the financial crisis.