Why I choose banking sector? It's because it's a 19th century legacy and it's has-been proven the most notorious for causing two huge financial meltdown in history.

Let's discover what is the risk that the banks are facing doomed future because of technological advances. 

If you want to realize and eliminate this risk, we need to understand the key characteristics of the risk.

The entire banking sector is established on two illusions/ misconception.

1. Thanks to modern portfolio management, bank debt is "riskless."

2. Technology is only enhances banks tools to skim profits, it does not undermine the fundamental role of banks.

But, the global currency and financial meltdown of 1997/98 and 2008/09 definitely prove the riskless bank debt are mere illusions.

Technology advances do not just enable high frequency trading, it enables capital and borrowers to bypass banks entirely. 

We re-examine the banks are obsolete and can be eliminated. The benefits of eliminating the financial /banking sector are immense and far reaching. What exactly do banks manage and offer?

1. They hold depositors' money.

2. They act as clearing house for payments and transferring from payer to payee.

3. They offering on a fractional reserved basis, ie. A few dollar bills in cash deposits to support $100 dollars in loans. 

4. They originate and trade derivatives, runs high speed trading desk, operates various money laundering and embezzlement scheme, influence elected officials with lobbying and campaign contributions and subvert both market capitalism and democracy. 

Once we eliminate these obsolete middle man parasites, we have a delightful question to answer, what else can we do with trillions of dollars we can save every year? A lot of it.

But unfortunately for banks, higher education, buggy whip manufacturers, etc. monopoly and propaganda are no match for technology. Just because a system worked in the past in a specific set of technological constraints doesn't mean it continues to be a practical solution when those technological constraints dissolve.

The current banking system is essentially based on two 19 th century legacies. In that bygone era, banks were the repository of accounting expertise (keeping track of multitude of accounts, interest, etc.)  and risk judgment and management expertise. ( choosing the lowest risk borrowers) Both of these functions are now automated.

The amusing thing about technology is that those threatened by fundamental improvements in technology attempt to harness it to save their industry from extinction.

Immediately that the banks, accounting and risk management is automated, borrowers and capital owners can exchange funds in digital marketplaces, there's no need for banks.

But according to banks only they possess the expertise to create riskless debts. Oh well, but;

"Moral hazard is what happens when bankers made bad decision and suffer no consequences. They are free to make increasingly risky bets, knowing they will personally suffer no losses if the bets goes bad. No matter how risky, how vicious and how not transparent, the banks suffered no consequences."

Absence from consequences the system created perverse incentives to pyramid risky bets and derivatives to increase profits----a substantial shares of flows into the personal accounts of the themselves, too big to fail means too big to jail maybe.

Who picked up all the losses created? Privatized profits and socialize losses? Why must taxpayers suffers at that magnitude without consumers' consent!?

Trillions of dollars multiple by more than 13 times the underlying collateral, double the size of the largest economy and pyramided into derivatives and risky financial instruments. Heck! 

The present financial banking is not just a financial threat to the nation, it is a political threats because it's outsized and obviously threatening and influencing the political process, democracy, regulatory compliance and fairness governance machinery. 

The banking/financial sector claims to be eliminate risks. But what they're really doing is perfecting the threats that are destroying the system from within.

The banking /financial sector cannot be reformed, for its own nature of systemic collapse. They claimed they are essential and nations will collapse without them. Is this precisely the opposite of reality? 

Last happy thoughts. 

Technology cannot be put back into the bottle. The financial /banking sector wants to use technology to increase its middleman skim. But the technology that already out of the bottle will dismantle the sector as a function of what technology enables. 

Faster, cheaper with greater transparency and the proper dispersion of risk.

Will technologies innovation and efficiency transform the much awaited moment?

Will we ever envision the real economy prosper with technological innovation?

Ask which Financial / Banks are not silently crying out because of the coming transformation. 

Now that one of the largest banks planned a new rulei s that could/may see "senior bankers" jailed up to a max term of 7 years for " reckless misconduct" or "criminally liable" for their offense that causes a failure in the institution.

Now lawmakers seek indivitualise blame for failures. Will this covers all "senior personnel" that are directly or indirectly causes a failure in a corporation, economy or nation in whole. And why just bankers?

We're willing to wait and find out about that.

P/s: Economics history is never ending series based on falsehoods, misleading and lies. Not truths. Thats' the path to big money. Only kids will accept it as truths. The Wise will step off before it is discredited.