Citi Explores 10 Disruptive Innovations in New Reportby Fintech News Hong Kong November 30, 2017
Citi Global Perspectives and Solutions (Citi GPS) has released the fifth edition of its Disruptive Innovations series, detailing ten exciting new trends in the areas of genetics, robotics, blockchain, the Internet of Things (IoT), and more.
Blockchain in commodities
Blockchain, the technology underlying cryptocurrencies such as bitcoin, is set to revolutionize both the physical trading of commodities and the electricity markets by substituting traditional trading exchanges with a system that is cheaper, faster and even more secure in diminishing counterparty trading exposures, including for banks.
“Physical commodity trading — the oldest form of world trade and trade finance in the largest trading sector in the global economy — could be vastly changed by the introduction of blockchain technology by sharply reducing the amount of required processing and confirmations and significantly reducing the working capital required to facilitate trading.”
The rise of the citizen developer
A group of savvy business users, known as the “citizen developers,” is transforming how software is developed. These are empowered by a growing set of technologies, known as “low-code” tools, which enables them to build professional-grade applications with little to no formal training in traditional software development.
“We expect the low-code development trend will have a significant impact on driving the next wave of software applications over the next half-decade or more. […] The world’s demand for automation through software (which we refer to as ‘software-ification’) is insatiable and we expect the citizen developer is a key enabler to fulfill the proliferation of software-ification.”
CRISPR-based gene editing
Since its discovery in 2012, genome editing technology has caught on like wildfire across the biomedical research community and while still early and arguably very risky, the power of the technology cannot be ignored.
“If brought to market, gene editing has unfettered potential for ‘one-and-done’ cures spanning a broad array of diseases and disease states. While progress may be gradual and volatile, we expect the new science of gene editing to fundamentally change the way physicians and scientists approach disease management if a ‘genetic cure’ becomes an option.”
CRISPR technology is a powerful tool for editing genomes that allows researchers to alter DNA sequences and modify gene function. The worldwide CRISPR technologies market is expected to grow to ~US$10 billion by 2025.
Heat Not Burn tobacco
Heat Not Burn (or Tobacco Heating System) is undeniably the most significant innovation in the tobacco sector since e-cigarettes. The devices heat tobacco without burning it, providing the smoker with the taste of tobacco without the smell and harmful smoke. By not burning the tobacco, the product releases much lower levels of harmful chemicals compared with traditional cigarettes.
“Going forward, we believe there is a wide range of possibilities for the Heat Not Burn market. We think Japan will continue to be the most important market and driver of demand over the next two years due to the size of its market and the arguable view that Heat Not Burn is uniquely suited to the Japanese consumer (perhaps over other Western consumers).”
While the origin of the idea of the Hyperloop transportation system can be traced back to the 19th century, it is SpaceX’s Elon Musk who brought the idea for a Hyperloop firmly into the 21st century. At a conference in May 2013, Musk described the Hyperloop as a “cross between a Concorde, a railgun, and an air hockey table.”
The original concept designs for Hyperloop transportation systems involved either passengers or freight being placed in capsules that use a combination of induction motors and magnetic levitation and air propulsion systems to travel at high speeds (up to 760 mph) through a network of vacuum-sealed, low-pressure tubes.
“Hyperloop could conceivably disrupt both passenger and freight transportation. […] 28 possible Hyperloop routes across 15 different countries have been identified as feasible.”
Use cases for IoT exist in a wide range of consumer and business application areas including Connected Health, Connected Home, Car of the Future, and Smart City in addition to specific industrial and retail applications. These applications can be enhanced by adding a payments layer.
“[A payment layer] dramatically enhances the value proposition of the basic IoT layer […] and can help in the proliferation and monetization of IoT.”
There is a seismic shift going on across global equity markets with passive equity funds becoming more and more popular. The shift partly reflects greater investor focus on asset management costs, especially in a low return world.
“Sliding management fees based on relative performance could help active managers compete against the growing popularity of passive funds.”
Liquid biopsy allows the detection of generic material from a tumor to be analyzed noninvasively – through, for example, a blood draw. It has the ability to dramatically improve cancer care in the coming years.
“We think liquid biopsy testing could grow to become a US$10+ billion market over the next decade, en route to becoming one of the most important clinical advancements in decades.”
Smart robotic tools
The cobot market, while still in its infancy, is set to grow to US$2 billion by 2020. Various industry sources expect the market to continue to grow at a rate over 25% and put the market size at US$7 billion by 2025.
A collaborative robot (cobot) is a robot intended to physically interact with humans in a share workspace. Straight out of the box however, these cobots need an end-of-arm tool that mimic hand capabilities.
Tools such as suction cups, adaptive tools and soft manipulation grippers are progressing robot arms towards the human hand.
Unmanned commercial aircraft
AI-guided vehicles are showing up in many industries, including the airline industry. The deployment of robot pilots on commercial flights could improve the safety record, profitability and efficiency of the airline industry.
“Replacing human pilots with robots could materially reduce labor expenses, which make up one-third of labor costs for the aviation industry. Over the long-term, robots – or artificial intelligence (AI)-piloted planes – could revolutionize commercial air travel.”