The internet, smartphones, the euro, and cryptocurrencies are just a few of the innovations that have revolutionized markets in the past three decades. So Bloomberg Markets asked some finance industry leaders for their best guesses about what might drive the biggest changes between now and 2052. Their comments have been edited for length and clarity.
Adena Friedman, President and CEO, Nasdaq Inc.
The next 30 years I think are going to be really focused on value-added intermediation in the markets. The technology will exist to allow for every asset on the planet to be digitized and available to be bought and sold in an instantaneous way.
So what are the technologies that underpin that? I think moving markets into a cloud infrastructure is going to be a critical component. Bringing more machine learning into market decisions, into crime management, into managing markets for fairness. And then I definitely think that the ¬digital-asset ecosystem will mature very materially, to become mainstream.
But there are big caveats to that. One is crime management. If the digital-asset ecosystem does not take crime management seriously, governments just won't allow it to be adopted in a mainstream way. And then the second is the scalability of the digital-asset ecosystem has to match—and frankly, surpass—the scalability of what the traditional markets are able to achieve today.
If the blockchain can scale a lot more than it can today, I think you would see regulators get more comfortable bringing the digital- asset construct into traditional markets. You could see potential for a central bank digital currency really forming the basis for a much more digital payment structure. And then you could see capital markets opening up into a much more globalized format.
(Photographer: Christopher Goodney/Bloomberg)
David Solomon, Chairman and CEO, Goldman Sachs Group Inc.
The big macro trends are around artificial intelligence, biopharma, and biotech—changes that are going to have a profound impact on the way we all live. Big-picture issues. Also, investments in trying to find ways for our energy sources to be greener over time.
How do we bring together the capital that's necessary to drive innovation? Some of that can be done through private-sector risk capital. Some of the capital can come from governments. Some of the capital can also come from partnerships between the private sector and governments to try to find ways to encourage more investment.
There's a lot of capital going into artificial intelligence already. With respect to medtech and biotech, we had a pandemic, and the government intervened. But generally speaking, for regular technological advancement and innovation, I don't think we need to have public-private partnerships in the medtech or biotech space. But to drive innovative climate technologies and a faster transition to clean energy will require a much greater amount of capital than those other areas.
Most businesses are dealing with accelerating trends of digitization around their business—and automation. I happen to think that blockchain technology is an early version of technologies that will ultimately be used to further digitize the infrastructure of financial services. Because while there are a lot of good things with blockchain, it's not a great technology for a large number of transactions at a very high speed.
It's not a perfect analogy, but the way to think about it is the way you accessed the internet 25 years ago vs. the way you access the internet now.
(Photographer: Bryan van der Beek/Bloomberg)
Jane Fraser, CEO, Citigroup Inc.
As I think about the next 30 years and the innovations that will change and define markets, it is not a single product that comes to mind. Instead, I'm focused on the new ways we will be doing business across the industry. There are fundamental changes on the horizon that will reconstruct the infrastructure of global markets and the architecture of finance as we know it today.
We are moving towards a boundless virtual economy in which markets do not open or close, digital asset on- and off-ramps are limitless and metaverse activities are widespread. Digital assets will be widely embraced and securitized and we will see asset "avatars" that exist in more than one form between traditional assets, digital native assets, and tokenized versions of traditional assets. In this world, market participants will be able to respond to "after hours" announcements and overseas events at any time of day and across time zones. The 24/7 nature of these transactions will reduce operational risk, streamline payments across platforms globally, and enhance the consumer and client experience.
Making this a reality will require industry-wide operational standards and improved market infrastructure across both the private and public sectors. We will need the appropriate regulatory frameworks, a new generation of risk management and governance tools, and the right infrastructure to support the digital twins of physical systems and objects.
That will mean more widespread institutionalization of retail opportunities and intangible assets, which we're already seeing signs of today. Adoption of digital assets by institutions is increasing, and there is growing "financialization" of objects that previously only existed in the hands of retail individuals, such as individual real estate properties, art and other collectibles.
One thing is certain, 2050 will be virtual and it will be boundless.
