Kozminski Techblog

Reading Time: 5 minutes

The impact of decentralized finance on traditional banking

Decentralized Finance, or DeFi, represents a disruptive force that challenges traditional financial systems[1]. By leveraging blockchain technology, DeFi offers a decentralized and transparent alternative to centralized financial institutions[2]. This new notion is upending existing financial systems by giving individuals greater control over their assets and upsetting the banking industry’s traditional model[3]. As a result, DeFi is threatening to replace traditional banks that function as intermediaries for all transactions[4]. The disruption caused by DeFi is significant and is forcing traditional banks to rethink their business models.

One of the most significant impacts of DeFi on traditional banking is its ability to offer more accessibility and inclusion[1]. DeFi offers several advantages, including increased financial accessibility, lower transaction costs, and enhanced security through blockchain[5]. Unlike traditional finance, which relies on centralized institutions such as banks and intermediaries, DeFi aims to eliminate intermediaries and provide services to unbanked people who do not have access to regular banking services[3]. This inclusivity is one of the key benefits of DeFi, and it is transforming the financial landscape by providing access to financial services for the unbanked and underbanked[2].

DeFi is also creating new opportunities for investment and innovation[6]. Decentralized finance allows for greater innovation and customization compared to traditional finance[7]. DeFi platforms are built on open-source technology, which enables developers to create new financial products and services[8]. This innovation is driving investment in DeFi, with the total value locked in DeFi protocols reaching over $100 billion in 2021[9]. The rise of DeFi has serious consequences for existing banking institutions, challenging centralized institutions’ supremacy by providing a more transparent and decentralized alternative[3]. The findings of the literature review suggest that decentralized finance offers many benefits, such as broadening financial inclusion and encouraging innovation and investment[10]. As a result, traditional banks must adapt to the changing landscape of finance or risk becoming obsolete.

Faqs

Q: What is decentralized finance (DeFi) and how does it impact traditional banking? A: Decentralized finance, or DeFi, refers to a financial system built on public blockchains that offers various financial services without the need for traditional intermediaries like banks. Its impact on traditional banking is significant as it disrupts the conventional financial systems by providing an alternative way to access financial services and conduct transactions.

Q: In what ways does DeFi disrupt traditional financial systems? A: DeFi disrupts traditional financial systems by enabling peer-to-peer transactions, lending, and borrowing without the need for financial intermediaries. It eliminates the need for centralized authorities and allows individuals to have more control over their assets and financial activities.

Q: How does DeFi offer more accessibility and inclusion compared to traditional banking? A: DeFi offers more accessibility and inclusion by providing financial services to individuals who are unbanked or underbanked. It allows anyone with an internet connection to access financial tools, invest, and participate in various financial activities without being restricted by geographical or institutional barriers.

Q: What new opportunities for investment and innovation does DeFi create? A: DeFi creates new opportunities for investment and innovation by offering a wide range of decentralized financial products such as yield farming, liquidity provision, and decentralized exchanges. It also enables the development of innovative financial applications and platforms that can potentially reshape the traditional banking landscape.

Q: What are the potential risks associated with the impact of DeFi on traditional banking? A: The potential risks associated with the impact of DeFi on traditional banking include regulatory challenges, security vulnerabilities in decentralized platforms, and the potential displacement of traditional banking services. Additionally, the rapid growth of DeFi may pose challenges related to consumer protection and financial stability.

Tips And Best Practices

**Understanding Decentralized Finance (DeFi)** – Educate yourself about the fundamentals of DeFi, including concepts like smart contracts, decentralized exchanges, and lending protocols. Understanding the underlying technology and principles is crucial in grasping the potential impact on traditional banking.

**Stay Informed About Regulatory Developments** – Keep abreast of regulatory changes and developments in the DeFi space. As the regulatory landscape evolves, staying informed about compliance requirements and potential impacts on traditional banking will be essential. For instance, keeping track of how regulators are approaching issues like AML (anti-money laundering) and KYC (know your customer) requirements in the DeFi space will be important for traditional banks.

**Explore Collaboration Opportunities** – Consider exploring collaboration opportunities between traditional banks and DeFi platforms. Some banks have started to explore partnerships with DeFi projects to harness the benefits of blockchain technology while ensuring compliance with regulatory obligations. For example, a traditional bank might explore integrating DeFi lending protocols into their existing offerings to provide customers with more diverse financial services.

**Diversify Knowledge and Skillsets** – Encourage employees within traditional banks to diversify their knowledge and skill sets to include an understanding of DeFi. This could involve providing training on blockchain technology, smart contracts, and DeFi platforms. By doing so, traditional banks can ensure that their workforce is equipped to understand and adapt to the changing financial landscape.

**Investigate New Business Models** – Research and investigate new business models that leverage the strengths of both traditional banking and DeFi. For instance, exploring the potential for traditional banks to offer custodial services for digital assets used in DeFi or creating hybrid financial products that bridge the gap between traditional finance and DeFi could open up new avenues for growth and innovation. By following these tips and best practices, traditional banks can better navigate the impact of DeFi and position themselves to capitalize on the opportunities presented by this rapidly evolving sector.

In conclusion, the impact of decentralized finance on traditional banking has been significant. DeFi has disrupted traditional financial systems by offering more accessibility and inclusion to a wider range of individuals. It has also created new opportunities for investment and innovation, allowing for the development of new financial products and services. While the full extent of DeFi’s impact on traditional banking is yet to be seen, it is clear that it is changing the way we think about and interact with financial systems. As DeFi continues to grow and evolve, it will be interesting to see how traditional banking institutions adapt and respond to these changes.

References

1. The Impact of DeFi on Traditional Financial Systems. (n.d.) Retrieved January 31, 2024, from www.linkedin.com
2. Decentralized Finance (defi): Revolutionizing Traditional …. (n.d.) Retrieved January 31, 2024, from ruralhandmade.com
3. The Rapid Rise of DeFi and its Impact on Traditional …. (n.d.) Retrieved January 31, 2024, from www.financemagnates.com
4. The Implication of Defi (Decentralized Finance) in …. (n.d.) Retrieved January 31, 2024, from papers.ssrn.com/sol3/papers.cfm?abstract_id=4491898
5. Decentralized Finance (DeFi) and the Traditional Banking …. (n.d.) Retrieved January 31, 2024, from medium.com
6. The Impact of Decentralized Finance (DeFi) on Traditional …. (n.d.) Retrieved January 31, 2024, from www.bulbapp.io
7. Decentralized Finance: The Future of Financial Services?. (n.d.) Retrieved January 31, 2024, from dashdevs.com
8. A systematic review of decentralized finance protocols. (n.d.) Retrieved January 31, 2024, from www.sciencedirect.com/science/article/pii/S2666603023000179
9. Decentralized Finance (DeFi) and Its Impact on Traditional …. (n.d.) Retrieved January 31, 2024, from www.linkedin.com
10. Decentralized finance research and developments around …. (n.d.) Retrieved January 31, 2024, from www.ncbi.nlm.nih.gov/pmc/articles/PMC9395794/

Reading Time: 2 minutes

The transformative impact of AI on the workplace, akin to the internet revolution of the 1990s, presents a pivotal opportunity for both employees and employers to embrace a skills-first approach. As AI redefines job roles, employees should view their positions not merely by titles but as an assortment of tasks, some of which will evolve or be automated by AI. This perspective enables workers to identify and develop key skills necessary for staying competitive in their roles.

For employers, the rapid growth in AI skills, evident from the ninefold increase in AI-skilled professionals since 2016 and the 17% higher application rate for AI-related jobs, highlights the significance of prioritizing skills in hiring and talent development. Adopting a “training to hire” and “training to promote” methodology, focusing on both hard skills in AI and crucial people skills, is imperative. In fact, 92% of US executives now believe that people skills are increasingly vital.

The year 2024 marks the beginning of an era where human-centric skills like problem-solving, empathy, and active listening become central to career success. AI, viewed as a complementary tool, enhances job efficiency and allows professionals to concentrate on the more human aspects of their work. For instance, software engineers can delegate routine coding to AI, focusing more on innovation. Similarly, recruiters can let AI manage job posting creation, dedicating more time to strategic aspects like candidate relationships.

This synergy between AI and human skills is poised to create a work environment that is not only more efficient but also more fulfilling, marking a significant shift in how we perceive and engage with our work.

Sources:

https://www.wired.com/story/the-ai-fueled-future-of-work-needs-humans-more-than-ever/

https://writesonic.com/chat

Reading Time: 3 minutes

Apple Inc. created the mixed reality headgear known as Apple Vision Pro. Pre-orders opened on January 19 following the announcement of the product during Apple’s Worldwide Developers Conference on June 5, 2023. Delivery of the product is slated to start in the United States on February 2, 2024. A global launch date has not yet been set. Since the release of the Apple Watch in 2015, this is Apple’s first significant new product category. So let’s look into what’ all the hype is about.

History of virtual reality

1989: After being awarded a contract by NASA to create the audio component of the Virtual Environment Workstation Project—a virtual reality training simulator intended for astronauts—Scott Foster established Crystal River Engineering Inc. Real-time binaural 3D audio processing was pioneered through this firm.

1995: Nintendo released the Virtual Boy system, a 3D monochrome gaming device. It was the first handheld game system with three-dimensional graphics. However, it failed commercially because of: The absence of color graphics, Absence of software assistance, Using it wasn’t comfy.

2012: Palmer Lackey launched a Kickstarter campaign for the Oculus Rift which raised $2.4 million.

2014: For $2 billion, Facebook acquired the Oculus VR startup. This was a pivotal point in the history of virtual reality since it quickly took off. Sony said that they were developing a virtual reality headgear for the PlayStation 4 (PS4) called Project Morpheus. Google introduced Cardboard, an inexpensive, DIY stereoscopic smartphone viewer. Samsung unveiled the Samsung Gear VR, a headgear that displays content through a Samsung Galaxy smartphone.

2023: Apple announced its entry into the VR market with the Apple Vision Pro, an upcoming mixed-reality headset

What is Apple Vision Pro?

With much fanfare, Apple revealed a new computer last week. Wearing a computer on your face is nothing new, but how you utilize the Vision Pro is. The output of the computer is projected into your eyes through two tiny, high-resolution screens that are positioned very close to you, as opposed to being viewed on a physical screen. Eye tracking and gestures serve as the main user interface for computers instead of a keyboard, mouse, or touch screen. This new gadget is referred to by Apple as a spatial computer. The device’s ability to show digital outputs on any nearby physical location makes its name appropriate. The device can be used without a desk or lap, and the perceived viewing area can be as large as you choose. This implies that you could theoretically view a movie the size of a theater while seated in a small area, such as an airline seat.

How can we use it?

What applications are appropriate for a spatial computer? Apple has currently provided application scenarios that are commonplace. It can be used similarly to an iPad or standard PC, but with the existing 2D information displayed on a far more adaptable and unrestricted display. People are in need of that. In situations where you don’t have much room, it will be useful. Additionally, it will be beneficial to people who presently occupy their area with several enormous displays. A really large-screen TV is the closest analog in that regard.

However, the technology and R&D effort put into the Vision Pro does not seem to be justified by a better and more practical display for 2D content. Whether this gadget can lead to augmented and virtual reality applications that would make wearing a computer strapped to your head justified is the real question. It definitely possesses the technological capacity to do so.

Problems with Apple Vision Pro

The inability to use glasses with the headset—a choice Apple took to protect the gadget from being overly bulky—is a major issue with Vision Pro. Gurman described it as a “headache” to offer customers a wide range of lens alternatives, despite Apple’s partnership with Zeiss to produce prescription lenses that attach to the Vision Pro. The company could make custom headsets with prescription lenses built-in and ship those directly to consumers, but then the device might be unusable by other people (or even by the original owner if their prescription shifts over time). It’s tricky and it doesn’t appear that Apple has a bonafide, slam-dunk solution to the problem yet.

The mixed reality headset has “caused neck strain in testing due to its size and weight,” which is now around one pound, according to Mark Gurman of Bloomberg. According to Gurman, Apple has been preparing to add a supportive head strap to help with the problem, but a more significant adjustment would be needed for a long-term solution.

The iPod was a digital walkman. The iPhone was a connected iPod. The iPad was a bigger iPhone. The Apple Watch was a better smartwatch. And the Vision Pro is an unconstrained 3D screen. In the previous cases, the device is outgrown and becomes more than that initial use by enabling developer innovation. The Vision Pro is a welcome new experiment along a well-trodden path in computing.

Sources:

https://hbr.org/2023/06/what-is-apples-vision-pro-really-for

https://www.apple.com/newsroom/2023/06/introducing-apple-vision-pro/

https://www.apple.com/apple-vision-pro/

https://www.techradar.com/computing/virtual-reality-augmented-reality/apple-is-reportedly-fixing-the-vision-pro-in-two-key-ways

https://www.theverge.com/24054862/apple-vision-pro-review-vr-ar-headset-features-price

Reading Time: 3 minutes

The gaming industry, always at the forefront of technological innovation, is undergoing a transformative phase, greatly influenced by advancements in Artificial Intelligence (AI). This transformation is not only reshaping game development but also enhancing player experiences in unprecedented ways. In this post, we’ll explore the various facets of AI in gaming, from game design to player interaction.

AI in Game Development

Procedural Content Generation

One of the most significant applications of AI in game development is procedural content generation (PCG). AI algorithms can create vast, diverse game worlds with unique landscapes, characters, and storylines. This not only saves time for developers but also ensures that each player’s experience is unique. Games like “No Man’s Sky” and “Minecraft” are prime examples where PCG is used to generate endless worlds.

Realistic NPCs

Non-player characters (NPCs) are being revolutionized by AI. With advanced AI algorithms, NPCs can now exhibit behaviors that are more nuanced and realistic. This enhances the immersion, making game worlds feel more alive and responsive. AI-driven NPCs can adapt to player actions, creating a dynamic gaming experience where each interaction feels meaningful.

Improved Game Testing

AI is also transforming game testing, a critical phase in game development. Automated AI testers can play games with the efficiency and tirelessness that human testers can’t match. They can identify bugs and glitches more quickly, speeding up the development process and ensuring a smoother, more polished final product.

AI in Player Experiences

Personalized Gaming

AI algorithms can analyze a player’s style and preferences, offering a more personalized gaming experience. This might mean adjusting difficulty levels, changing story paths, or even suggesting new games that align with their tastes. This level of personalization ensures that games remain challenging and engaging for each individual player.

Enhanced Realism

AI contributes significantly to the realism in games. This is evident in the realistic physics, character movements, and environmental interactions in many modern games. The use of AI in graphics rendering, known as AI upscaling, allows games to have high-quality graphics without needing extremely powerful hardware.

Voice and Gesture Recognition

With AI, games are becoming more interactive. Voice and gesture recognition technologies allow players to interact with games in more natural and intuitive ways. This not only makes games more accessible but also opens up new possibilities in game design.

The Future of AI in Gaming

Looking ahead, the possibilities of AI in gaming are almost limitless. From creating more immersive virtual worlds to developing AI-driven storytelling, the fusion of AI and gaming is set to redefine what games look and feel like. As AI technology continues to evolve, so too will the ways in which we play, create, and interact with games.

In conclusion, AI is not just a tool in the arsenal of game developers; it’s a game-changer in the truest sense. It’s paving the way for more immersive, engaging, and personalized gaming experiences, making the virtual worlds of tomorrow even more compelling than we could have ever imagined.

Links:

https://www.arm.com/glossary/ai-in-gaming#:~:text=AI%20in%20gaming%20refers%20to,behavior%20in%20the%20game%20world.

https://en.wikipedia.org/wiki/Artificial_intelligence_in_video_games

https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.schoolofit.co.za%2Fgame-development-courses%2F&psig=AOvVaw05rEH-VZtXBbZvjVgOUP_5&ust=1706667059091000&source=images&cd=vfe&opi=89978449&ved=0CBMQjRxqFwoTCOjdr7CEhIQDFQAAAAAdAAAAABAJ

Prompts (ChatGPT 4)

“AI in gaming”

“How AI controls NPCs”

“make an image of angry kid playing League Of Legends”

Reading Time: 2 minutes

Customer experience:

Uber has been leveraging behavioural science, backed by insights from across the customer journey, to reduce friction and create a simple, intuitive, fast, and easy customer experience. (Forbes) Uber has used data to improve its in-app help centre for customers and riders, suggest ways to optimise Chat Support, and uncover issues affecting the user experience. (Forbes) The end result has been a consistent improvement in the company’s customer satisfaction across all channels.

AI has improved Uber’s user experience in various ways. AI has improved efficiency, reduced wait times, and provided personalised recommendations, making riding more convenient and pleasurable. Pattern recognition is another tactic used by Uber’s AI. If a consistent route or food order is placed in the app, Uber will pre-emptively send a notification before you even decide to place an order or call a ride (Business Insider). Additionally, AI-powered safety features such as driver background checks and real-time tracking help to ensure the safety of riders.

Revenue:

Uber has been employing AI to optimise its pricing approach, which has resulted in increased revenue. Uber has used machine learning to forecast demand for rides and modify costs accordingly. This has allowed Uber to grow income while simultaneously giving clients with more affordable rides. By increasing efficiency and decreasing costs, AI has enabled Uber to cut its fares and attract more riders. Furthermore, AI-powered personalisation tools are utilised to target advertising to specific riders, potentially increasing revenue from advertising. For the first time in its decade long history, Uber made a profit in 2023. Uber reported a 118% increase to its revenue in the third quarter of 2023 and this earnings increase is comes after a hard implantation of AI in its revenue streams However, in its earnings report AI was only mentioned once. An article from the messenger alluded to this being a result of Uber “downplaying” the impact AI has had on Uber’s success (The Messenger). It is hard to determine the direct impact of AI on Uber’s profitability, though one may infer that there is a direct correlation.

Efficiency:

Uber has been leveraging AI and machine learning to detect and handle user experience incidents, ensuring that their app remains operational. Uber has used machine learning to identify and resolve problems with its payment system. This has helped Uber enhance its efficiency and reduce the number of problems affecting its consumers. AI has also increased Uber’s operational efficiency. With the implementation of AI, there has been a 12.3% increase improvement in demand forecasting, which better determines the price of Uber’s at a given time (Uber).

Another example is AI-powered chatbots, which are used to manage client inquiries, decreasing the strain of human support personnel. AI is also utilised to automate duties such as data analysis and reporting, allowing personnel to focus on more strategic objectives.

Operations:

Other specific cases on the use of AI in Uber are as follows:

• Demand Forecasting: Uber optimises fleet allocation and reduces empty vehicles through demand forecasting using AI algorithms. This increases efficiency and lowers fuel usage, saving the drivers money.

• Route Optimization: AI-powered algorithms optimise routes to reduce travel time and enhance the consumer experience.

• Pricing Optimization: AI algorithms optimise pricing based on real-time demand and supply, ensuring riders pay fair prices and drivers make a respectable profit.

• Fraud Detection: AI detects fraudulent activity on Uber’s platform, protecting riders and drivers from scams.

Sources:

1. https://stratechery.com/company/uber/)
2. https://www.businessinsider.com/uber-filed-patent-to-predict-customer-habits-artificial-intelligence-2023-5)
3. https://www.cnbc.com/2023/05/19/heres-how-companies-in-the-sharing-economy-can-benefit-from-ai-and-boost-profits-.html)
4. “ https://www.uber.com/us/en/uberai/)
5. World Economic Forum ²:

Engine used:

Deep AI

Reading Time: < 1 minute

In today’s world, few people will be surprised by yet another innovative smartwatch, but Samsung has decided to come up with something really new. Just recently, the company announced its new Galaxy Ring device. 

Samsung presented its new smart ring with several visible sensors on the inside of the strap.

The company’s representative also said that the ring will help people monitor their health status as its main goal.

Oura Ring is a well-known player in this market. In turn, the CEO said that their ring has the strongest intellectual property portfolio in both hardware and software. And the emergence of such a player in this market only confirms their competitiveness. However, should a heavyweight company like Samsung be perceived only as a player and not a potential ‘enemy’?

The main advantage – the usability of the Galaxy phone, Galaxy Watch and Galaxy Ring – is the ability to view all the data from the Samsung Health app, without using additional applications.

So, in my opinion, the future prospects are undeniable, and Samsung’s smart rings will be able to really change the use of smartwatches and rings from just accessories to a new useful line of development in this segment.

Reference list:

https://www.techradar.com/health-fitness/fitness-trackers/samsung-galaxy-ring-rumors-suggest-its-another-small-step-towards-reality

https://www.theverge.com/2024/1/19/24041922/samsung-galaxy-ring-smart-ring-wearables

Reading Time: 2 minutes

Introduction The world of technology is witnessing revolutionary changes, with Artificial Intelligence (AI) at the forefront. From ingenious gadgets to strategic applications in business and advertising, AI is reshaping our experience in the digital era. Here, we delve into some of the most intriguing developments and challenges that AI presents today.

1. The Rabbit R1: A Gadget That Does It All Imagine a gadget that can seamlessly integrate into your daily life, making tasks easier and more efficient. The Rabbit R1 is just that – a revolutionary device that exemplifies the success of AI in personal technology. Its versatility and user-friendly design mark a significant milestone in how we interact with smart technology in our everyday lives.

2. The Pentagon’s AI Predictions: A New Kind of Conflict On a more global and perhaps concerning note, the Pentagon has made predictions about future conflicts involving AI. The notion of AI vs. AI in strategic scenarios presents a new kind of technological warfare, raising questions about the role and regulation of AI in national security.

3. The Rising Popularity and Concerns of AI AI’s growing presence in various sectors is undeniable. Its rising popularity comes with its own set of challenges and concerns, particularly regarding privacy, ethics, and the potential for misuse. This dual aspect of AI’s growth reflects the need for balanced and responsible development in this field.

4. Supercomputers in Business: The New Normal The application of supercomputers in business is becoming more common, with Poland being a notable example of this trend. These powerful machines offer unparalleled processing capabilities, making them invaluable for complex problem-solving and data analysis in various industries.

5. AI Revolutionizes Advertising In the realm of marketing and advertising, AI has become a game-changer. In Poland, for instance, 90% of marketers are now utilizing AI to create more targeted and effective campaigns. This shift highlights AI’s transformative impact on how businesses connect with and understand their audiences.

Links: