March 24 Hangzhou- Dr. Xiao Feng, GM of Wanxiang Blockchain, delivered a keynote speech in a Fintech summit in Hangzhou. He shared his insight into the future of Fintech. He said Fintech would reshape the entire financial system in 20 years and artificial intelligence and blockchain would be the core technology that is driving the financial revolution today. In the speech, he predicted where it would be the end of the financial and technological revolution. The summit was sponsored by the Global Financial Group 100, Hangzhou Municipal Government, Hangzhou Xiaoshan District Government, China Blockchain Research Union and some other entities.

Below are some excerpts of his speech.

Xiao Feng:

What is Fintech in nature? According to my observation, Fintech will reconstruct the entire financial system in 20 years. The financial system that we are familiar with now is based entirely on the infrastructure of industrial society, which is the pyramid or hierarchical system, standardization, flowchart. But in a society of information, new business models emerges with a distributed and grid structure, such as Didi, sharing finance, sharing economy, and evolves to a “decentralized” pattern. In the future, financial technology will also help to reconstruct and rebuild the financial industry to meet the bottom structure of information society.

Xiao then divides Fintech revolution into 3 stages and we are at the Fintech 1.0 at the moment. Internet financing is the first stage of Fintech revolution but Fintech has a far more extensive in terms of time and scale than internet finance. Fintech 1.0 will end once AR, VR are fully matured and integrated into traditional financial.

Fintech 2.0 is where blockchain going to shine. He says:

Fintech 2.0: Artificial Intelligence and Blockchain as the Core Technology

When the financial technology 1.0 is still in the process, Fintech 2.0 has actually started. The iconic event was the birth of Alphago in 2016. The concept of “Artificial Intelligence” concept, when it was first proposed by a group of computer and mathematician in Dartmouth College in 1956, has gone through development in the past 60 years. AlphaGo marks the turning point of AI technology. We are about the witness the exponential growth of AI.

In addition to “artificial intelligence”, the second core technology of the Fintech2.0 is the blockchain technology. Some time ago, I gave a speech called “Why blockchain is the second generation of the Internet.” The first generation of Internet technology has brought great changes to the human society. In China great companies like Ali, Tencent and Ant Finacial emerges. The blockchain represents the second generation of the Internet for four reasons:
First, the blockchain allows us to evolve from the internet of information into the Internet of value. In short, it is because of the blockchain technology that we can now send money to pay, exchange and trade via internet.

Second, because of the block chain technology, we can transition from the consumer Internet to the industry Internet with Internet of Things, car networking as the representative. Industry Internet requires blockchain technology as the bottom layer. We can review “Internet of Things White Paper” by IBM in 2014. It is believed that when the world has 100 billion devices connected at the same time by 2050, blockchain is the best solution for the management of device identity and storage and fidelity for communication between devices.
Third, the block chain allows us to enter into a encrypted internet from an open internet. Now the Internet is completely transparent. User’s footprint and privacy on internet could be leaked anytime. It is a terrible thing.
If I do not want to expose my privacy, could the Internet provide such protection? Encrypting things on the Internet is one of the core functions of the blockchain. You are the one to own your data, not the internet company. Blockchain technology will help the Internet become an encrypted one so that privacy protection and security could be achieved.

Fourth, we want to move from a centralized Internet to a distributed Internet. Although the Internet can offer peer to peer information transmission, but most of them are dominated by some large companies. Blockchain technology can transform the Internet into a distributed, decentralized Internet.

The Fintech 2.0 phase is happening right now. The milestone event is AlphaGo. Although the development of AI in the past four decades is very gentle, exponential growth have been observed after 2000.

The final stage, or Fintech 3.0, would be the result of six contributing factors, original text could be found here.