The Impact of AI on Insurance in 2023

The impact of artificial intelligence (AI) in the insurance industry has been significant in the past five years. According to Accenture, the adoption of AI in the insurance sector is expected to double in the next three years. It could lead to cost savings of up to $1.2 billion annually. 

Another study by PwC found that 63% of insurance companies have already implemented or are planning to implement AI in their business operations. As a result, AI has allowed insurance companies to improve customer experience, reduce costs, and streamline underwriting processes, leading to a more efficient and profitable industry.

What Is AI in Insurance?

Artificial intelligence (AI) in insurance refers to using advanced technology, such as machine learning, natural language processing, and computer vision, to automate and optimise various functions in the insurance industry. 

This includes underwriting, claims processing, fraud detection, and customer service. By leveraging AI, insurance companies can analyse vast amounts of data, make predictions, and provide personalised services to customers in real-time. The integration of AI has the potential to transform the insurance industry by improving efficiency, reducing costs, and enhancing the customer experience.

Why Does Insurance Need AI?

There are several reasons why the insurance industry needs AI in 2023 and beyond:

  1. Increased efficiency and cost savings: AI can automate manual processes and help insurers analyse large amounts of data quickly and accurately, leading to faster decision-making and cost savings.
  2. Improved customer experience: AI can provide personalised recommendations and real-time support to customers, helping insurance companies meet their evolving needs and preferences.
  3. Enhanced risk assessment: AI can analyse historical data and other relevant information to identify and assess risk factors, helping insurers make more informed decisions.
  4. Fraud detection: AI can help insurers detect fraudulent activities by analysing patterns and anomalies in data, reducing the risk of financial losses.
  5. Better decision-making: AI can provide actionable insights to insurance companies, helping them make more informed decisions and improve their operations.

Given AI’s numerous benefits, it is likely that the insurance industry will continue to adopt and integrate this technology in the coming years. This article will examine some of these areas in more detail.

The Challenge for Legacy Insurers

Legacy insurers must invest in AI to keep up with fintech start-ups because these start-ups often have a technology-first approach and can offer innovative, personalised services to customers in real time. AI can help legacy insurers automate manual processes, provide better customer experiences, and make more informed decisions, allowing them to compete with fintech start-ups and remain relevant in the market.

An example of a legacy insurer investing in AI is AXA, one of the world’s leading insurance companies. AXA has integrated AI into its operations, using machine learning to automate manual processes, improve risk assessment, and provide personalised recommendations to customers. 

Another example is Allianz, which has invested in AI to enhance its underwriting processes and improve its efficiency. These companies recognise the importance of AI in staying competitive and relevant in the market and are taking steps to integrate this technology into their operations.

The Rise of Gen Z

Insurance companies need to invest in AI to keep up with the demands of Gen Z tech-savvy buyers who demand fast, convenient, and personalised experiences. AI can help insurance companies automate manual processes, provide real-time support, and deliver personalised recommendations, meeting the demands of this demographic.

Insurance companies use AI to analyse social media data and understand customer preferences and behaviours to meet Gen Z’s demands. For example, an insurance company might use AI to analyse customer interactions on social media platforms, such as Facebook or Instagram, to determine which products and services are most relevant to them.

One insurance company that is already using social media to its advantage for Gen Z is Lemonade. The company has built a chatbot that uses natural language processing to handle customer inquiries and uses AI algorithms to process claims quickly.

Using AI to understand customer behaviour and preferences, Lemonade can provide a personalised experience that appeals to Gen Z buyers. This demonstrates how insurance companies can use AI to keep up with the demands of this demographic and remain competitive in a rapidly evolving market.

AI for Efficiency and Cost Savings

Insurance companies use AI to improve efficiency and reduce costs by automating manual processes and making more informed decisions. AI algorithms can quickly analyse large amounts of data, identify patterns, and make predictions, allowing insurance companies to make more informed decisions and reduce the time and resources required to complete tasks.

For example, some insurance companies use AI to automate the underwriting process, reducing the time and resources required to assess risk and provide quotes. Others use AI to automate claims processing, reducing the time required to process claims and improving the overall customer experience.

MetLife is one insurance company already utilising AI to increase efficiency and save costs. AI has been incorporated into the company’s operations, with algorithms used to automate procedures, enhance risk assessment, and deliver tailored suggestions to consumers. Using AI, MetLife can improve customer service, save operating expenses, and increase operational efficiency. 

Improving Customer Service

Insurance companies use AI to improve the customer experience by providing more personalised services and real-time support. For example, AI algorithms can analyse customer data and preferences to provide tailored recommendations, and chatbots powered by natural language processing can provide instant customer support. These technologies allow insurance companies to provide a faster, more convenient, and more personalised experience, meeting the demands of modern customers.

One insurance company already using AI to improve customer experience is Oscar Health. The company uses AI to personalise the customer experience, from identifying and addressing potential health issues to providing care recommendations. Oscar Health uses machine learning algorithms to analyse customer data, such as claims and health records, to identify potential health issues and provide personalised recommendations to customers.

By using AI to provide a more personalised experience, Oscar Health can meet its customers’ demands and provide a level of service that sets it apart from other insurance providers. This demonstrates how insurance companies can use AI to improve the customer experience and remain competitive in a rapidly evolving market.

Enhancing Risk Assessments

Insurance companies use AI to enhance risk assessment by providing more accurate and reliable data analysis. AI algorithms can quickly analyse large amounts of data, identify patterns, and make predictions, allowing insurance companies to make more informed decisions and better assess risk. This helps insurance companies reduce fraud risk and underwrite policies more effectively, improving the overall customer experience.

One insurance company already using AI to enhance risk assessment is Allstate. The company uses AI algorithms to analyse customer data, such as driving patterns and vehicle usage, to assess risk and provide personalised insurance coverage. Allstate’s AI system can quickly process large amounts of data and identify patterns that might indicate increased risk, allowing the company to make more informed decisions and better assess risk. 

Using AI to enhance risk assessment, Allstate can provide better customer service and remain competitive in a rapidly evolving market. This demonstrates how insurance companies can use AI to drive operational efficiency, reduce costs, and improve customer experience.

Using AI to Detect Fraud

Insurance companies use AI to detect fraud by analysing large amounts of data to identify suspicious patterns and anomalies. AI algorithms can quickly process data, identify red flags, and trigger investigations, helping insurance companies prevent fraud more effectively.

One insurance company that is using AI to detect fraud is Anthem. The company uses AI algorithms to analyse customer data, such as claims and payment history, to identify suspicious patterns and trigger investigations. Anthem’s AI system can quickly process large amounts of data and identify red flags, such as unusual billing patterns or repeated claims from the same provider, allowing the company to detect fraud more effectively. 

Using AI to detect fraud, Anthem can reduce the risk of financial losses and improve the overall customer experience. This demonstrates how insurance companies can use AI to enhance security, reduce costs, and remain competitive.

Creating Actionable Insights

Insurance companies use AI to create actionable insights by analysing large amounts of data to identify patterns, make predictions, and inform business decisions. AI algorithms can quickly process data, identify trends, and provide real-time insights, allowing insurance companies to make data-driven decisions and improve the overall customer experience. 

Some examples of insurance companies using AI to create actionable insights include Allstate, Metromile, and Lemonade. 

Allstate uses AI to assess risk and provide personalised insurance coverage by analysing customer data, such as driving patterns and vehicle usage. Metromile uses AI to analyse telematics data from connected vehicles to provide real-time insights and inform pricing and underwriting decisions. Finally, lemonade uses AI to automate the insurance process, making it faster and more efficient to create actionable insights that drive business decisions and improve the overall customer experience.

Closing Thoughts

AI is having a significant impact on the insurance industry, transforming the way that insurance companies operate and interact with customers. AI is helping insurance companies to improve efficiency, reduce costs, enhance risk assessment, detect fraud, and create actionable insights. 

In the next ten years, the use of AI will likely continue to grow, leading to more advanced and sophisticated applications of AI in areas such as underwriting, claims to process, and customer service. 

As AI becomes more prevalent in the insurance industry, we will likely see a shift towards more data-driven, personalised, and automated insurance services that deliver improved customer outcomes and increased efficiency for insurers. With the continued growth of AI in insurance, the industry will continue to evolve and adapt to meet the changing needs of customers and remain competitive in a rapidly changing market.

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

What Is a Global Citizen? 

The term ‘Global Citizen’ has earned increasing attention in recent years as people worldwide become more aware of our interconnectedness and our actions’ impact on one another.

At its core, being a Global Citizen means recognising that we are all part of a larger global community and that we are responsible for taking actions that promote the well-being of people and the planet, both locally and globally. This includes valuing diversity, respecting human rights, promoting peace and justice, and working to address global challenges such as poverty, inequality, climate change, and other issues that affect people across borders.

Global Citizenship is not limited to nationality, religion, or culture. It’s a mindset and a way of living that emphasises our common humanity and our shared responsibility for the world we live in. It involves actively engaging with others, learning about different perspectives and cultures, and taking action to address social, economic, and environmental issues in our own communities and beyond.

A Global Citizen has the following key traits: 

  1. Awareness: Having a global perspective and understanding of how our actions impact others in different parts of the world.
  2. Empathy: Showing empathy for those who are different from us and being willing to learn from their experiences.
  3. Action: Taking action to address issues that affect people and the planet, such as volunteering, donating to charities, and supporting policies that promote social and environmental justice.
  4. Collaboration: Working with others across different backgrounds, cultures, and sectors to find solutions to complex global challenges.

Being a Global Citizen is about recognising that our actions have consequences that extend past our immediate surroundings. It’s to take responsibility for promoting a more just, equitable, and sustainable world for all people, regardless of where they were born, where they live, and how they identify.

This article delves into these traits shared by Global Citizens worldwide, what they care about today, and examples of what they’ve done with their success. 

A Global Citizen Is Aware

They maintain constant awareness of the interconnected world–that there are expanded ripple effects to our actions. They understand that there are social, economic and environmental issues that affect people in different parts of the world and that it’s essential to be informed about these issues.

For example, a Global Citizen makes a point to learn different cultures and languages and seeks opportunities in line with their passions. They recognise not only the potential to make a difference but to benefit themselves and add to their life while doing so. 

Although renowned late Beatle singer George Harrison passed away two decades ago, he lived ahead of his time and set the definition for a Global Citizen. In 1971, he organised the first benefit concert, The Concert for Bangladesh, which strove to raise awareness and help save the lives of 10 million East Pakistani refugees suffering from disease and starvation. 

Five decades on, this concert remains one of Mr. Harrison’s hallmark achievements and added to the permanent legacy of world-changing music. 

A Global Citizen Is Empathetic

They waste no time in showing empathy for others, especially those who are different from themselves. They recognise that there are many factors that influence a person’s experiences, such as their culture, gender, sexuality, religion, economic status, and race. A Global Citizen seeks to understand these factors and remain open to learning from others.

For example, a Global Citizen might participate in cultural exchange programs, learn a new language, or volunteer to support people in marginalised communities. They are aware that their own experiences are limited and that they can benefit from understanding the life stories of others. 

Wawira Njiru earned the headline’ novice cook to international icon’ for her dedication to transforming Kenyan schoolchildren’s lives through access to food. She launched the group Food for Education which targets explicitly the cycle of poverty and showcases how it can end with a simple, good meal. She has now served over nine million meals

A Global Citizen Understands Action

They don’t hesitate when the time comes to stop planning, and start doing. A Global Citizen is someone who takes action to address global challenges, both locally and globally. They recognise that there are many issues facing our world, such as poverty, inequality, climate change, and other environmental issues, and they’re willing to take action to address these challenges. 

For example, a Global Citizen might volunteer for a local charity, donate to a global relief organisation, or advocate for policies that promote social and environmental justice. They recognise that their own actions can make a difference and that collective action is necessary to create positive change.

Hamdi Ulukaya, founder and CEO of Chobani, champions fully-paid parental leave, local food banks, and trustworthy food programs for local schools. Further, he founded the Tent Partnership for Refugees, which seeks to provide hiring, training, and mentorship for refugees. Most are aware of the world’s crises, but it comes down to extending a helping hand. 

A Global Citizen Collaborates

They don’t live on an island, alone, king of a kingdom-of-one. A Global Citizen is someone who works with others to find solutions to complex global challenges. They recognise that no one person, organisation, or nation can solve these challenges alone, and that collaboration across different backgrounds, cultures, and sectors is necessary.

For example, a Global Citizen might participate in community forums, join a global network of activists, or collaborate with organisations to address issues such as poverty, climate change, or social injustice. They recognise that different perspectives and experiences can enrich the solutions we develop, and that working together is necessary to create meaningful change.

Richard Curtis has worked with numerous organisations and projects, such as Comic Relief, Red Nose Day, Projet Everyone, and Make Poverty History. His collaborations have led to the fundraising of over a billion US dollars for the benefit of children and vulnerable people worldwide. 

Closing Thoughts

Awareness, empathy, action, and collaboration–in that order. Global Citizens understand they’re on Earth to contribute, to do something, and help make something great. They utilise their unique talent or profession, be that music, business management, or cooking, and make it the bedrock of an enterprise far greater than themselves. 

Ironically and because of it, they become much more; memorable individuals we read about in magazines or hear of in podcasts. And it doesn’t take $10,000–not even $1,000. Wawira started with a single Kenyan meal, and later became one of the world’s most remarkable success stories under 30 years old. 

By combining a singular passion with a greater focus, entrepreneurs transition from the realm of ‘good’ to ‘great’. It’s this reason that prompted Deltec to launch the Deltec Initiatives Foundation, empowering young Bahamians, and Deltec Cares, a global disaster relief effort. 

Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Conor Scott, CFA, has been active in the wealth management industry since 2011. Mr. Scott is a Writer for Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees. This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service, or offering. It is not a recommendation to trade. 

Robotics and AI 

While it is obvious that artificial intelligence (AI) and robotics are different disciplines, robots can perform without AI. However, robotics reaches the next level when AI enters this mix. 

We will explain how these disciplines differ and explore spaces where AI is utilized to create envelope-pushing robotic technology. 

Robotics in Brief

Robotics is a subset of engineering and computer science where machines are created to perform tasks without human intervention after programming.

This definition is broad, covering everything from a robot that aids in silicon chip manufacturing to the humanoid robots of science fiction, and are already being designed like the Asimo robot from Honda. In global finance, we’ve had robo-advisors working with us for some years already. 

Courtesy of Honda

Robots have traditionally been used for tasks that humans are incapable of doing efficiently (moving an assembly line’s heavy parts), are repetitive, or are a combination. For example, robots can accomplish the same task thousands of times a day, whereas a human would be slower, get bored, make more mistakes, or be physically unable to complete it.

Robotics and AI

Sometimes these terms are incorrectly used interchangeably, but AI and robotics are very different. In AI, systems mimic the human mind to learn through training to solve problems and make decisions autonomously without needing specific programming (if A, then B).  

As we have stated, robots are machines programmed to conduct particular tasks. Generally, most robotics tasks do not require AI, as they are repetitive and predictable and not needing decision-making.

Robotics and AI can, however, coexist. Robotic projects that use AI are in the minority, but such systems are becoming more common and will enhance robotics as AI systems grow in sophistication.

AI-Driven Robots

Amazon is testing the newest example of a household robot called Astro. It is a self-driving Echo Show. The robot uses AI to navigate a space autonomously, acting as an observer (using microphones and a periscopic camera) when the owner is not present. 

This type of robot is not novel; robotic vacuums have been in our homes, navigating around furniture, for almost a decade. But even these devices are becoming “smarter” with improved AI. 

The company behind the robot vacuum Roomba, iRobot, announced a new model that uses AI to spot and avoid pet poop.  

Robotics and AI in Manufacturing

Robotic AI manufacturing, also known as Industry 4.0, is growing in scope and will become transformational. This fourth industrial revolution may be as simple as a robot navigating its way around a warehouse to systems like that of Vicarious, who designs turnkey robotic solutions to solve tasks too complex for programmed-only automation.  

Vicarious is not alone in this service. For example, the Site Monitoring Robot from Scaled Robotics can patrol a construction site, scanning and analyzing the data for potential quality issues. In addition, the Shadow Dexterous Hand is agile enough to pick soft fruit from trees without crushing it while learning from human examples, potentially making it a game changer in the pharmaceutical industry. 

Robotics and AI in Business

For any business needing to send things within a four-mile radius, Starship Technologies has delivery robots equipped with sensors, mapping systems, and AI. Their wheeled robot can determine the best routes to take on the fly while avoiding the dangers of its navigating world.

In the food service space, robots are becoming even more impressive. Flippy, the robotic chef from Miso Robotics, uses 3D and thermal vision, learning from the kitchen it’s in, and acquiring new skills over time, skills well beyond the name it earned by learning to flip burgers.  

Flippy, the robot chef from Miso Robotics

Robotics and AI in Healthcare

Front-line medical professionals are tired and overworked. Unfortunately, in healthcare, fatigue can lead to fatal consequences.

Robots don’t tire, which makes them a perfect substitute. In addition, Waldo Surgeon robots perform operations with steady “hands” and incredible accuracy.

Robots can be helpful in medicine far beyond a trained surgeon’s duties. More basic lower-skilled work performed by robots will allow medical professionals to free up time and focus on care. 

The Moxi robot from Diligent Robotics can do many tasks, from running patient samples to distributing PPE, giving doctors and nurses more of this valuable time. Cobionix developed a needleless vaccination administering robot that does not require human supervision. 

Robotics and AI in Agriculture

The use of robotics in agriculture will reduce the effect of persistent labor shortages and worker fatigue in the sector. But there is an additional advantage that robots can bring to agriculture, sustainability. 

Iron Ox uses robotics with AI to ensure that every plant gets the optimal level of water, sunshine, and nutrients so they will grow to their fullest potential. When each plant is analyzed using AI, less water and fertilizer are required producing less waste. 

The AI will learn from its recorded data improving that farm’s yields with every new harvest.

The Agrobot E Series has 24 robotic arms that it can use to harvest strawberries, and it uses its AI to determine the ripeness of the fruit while doing so.

Courtesy of Agrobot

Robotics and AI in Aerospace

NASA has been working to improve its Mars rovers’ AI while working on a robot to repair satellites.  

Other companies are also working on autonomous rovers. Ispace’s rover uses onboard tools, and maybe the device hired to lay the ‘Moon Valley’ colony’s future foundation.  

Additional companies and agencies are trying to enhance space exploration with AI-controlled robots. For example, the CIMON from Airbus is like Siri in space. It’s designed to aid astronauts in their day-to-day duties, reducing stress with speech recognition and operating as a system for problem detection.   

When to Avoid AI?

The fundamental argument against using AI in robots is that, for most tasks, AI is unnecessary. The tasks that are currently being done by robots are repetitive and predictable; adding AI to them would complicate the process, likely making it less efficient and more costly.

There is a caveat to this. To date, most robotic systems have been designed with AI limits in mind when they were implemented. They were created to do a single programmed task because they could not do anything more complex. 

However, with the advances in AI, the lines between AI and robotics are blurring. Outside of business- or healthcare-driven uses, we’ve noticed how AI facilitates the relatively new, lucrative field of algorithmic trading becoming increasingly available to retail investors. 

Closing Thoughts

AI and robotics are different but related fields. AI systems mimic the human mind, while robots help complete tasks more efficiently. Robots can include an AI element, but they can exist independently too.  

Robots designed to perform simple and repetitive tasks would not benefit from AI. However, many AI-free robotic systems were created, accounting for the limitations of AI at their time of implementation. As the technology improves, these legacy systems may benefit from an AI upgrade, and new systems will be more likely to build an AI component into their design. This change will result in the marrying of the two disciplines.  

We have seen how AI and robotics can aid in several different sectors, keeping us safer, wealthier, and healthier while making some jobs easier or performed more efficiently entirely by robots. However, we also consider a possible change in employment structure. People will be outsourced to robots, and they must be accounted for with training and other options for employment. 

With the combination of AI and robotics, significant changes are on our horizon. This combination represents the very forefront of innovation. 

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

The Uses of Chatbots Like ChatGPT

When we used to hear the word “chatbots,” pain often comes to mind. Frustration with the novel was the norm. With chatbots that were mostly able to receive a question and reply, “I am sorry, I can’t answer that. However, I will contact someone that can help you with it. You should receive a reply in 24 hours.” 

Yet, chatbots have come a long way, and the next-generation bots, like the new Chat GPT and those under development by Google, are excellent. They will become a vital part of the customer experience and take the burden of repetitive tasks, simple tasks, and questions away from agents while improving satisfaction results by quickly providing the info clients need.  

Chatbots in Brief

Chatbots had evolved since their inception when programmers wanted to surpass the Turing Test and create artificial intelligence. For example, in 1966, the ELZA program fooled users into thinking they were talking to a human.  

A chatbot is a computer program often using scripts that can interact with humans in a real-time conversation. The chatbot can respond with canned answers, handle different levels of requests (called second and third-tier issues), and can direct users to live agents for specific tasks.  

Chatbots are being used in a wide variety of tasks in several industries. Mainly in customer service applications, routing calls, and gathering information. But other business areas are starting to use them to qualify leads and focus large sales pipelines. 

The first chatbots of over 50 years ago were intended to show the possibilities of AI. In 1988 Rollo Carpenter’s Jaberwacky was designed more for entertainment but could learn new responses instead of relying on canned dialog only. As they progressed, chatbots surpassed “pattern matching” and were learning in real-time with evolutionary algorithms. Facebook’s Messenger chatbot of 2016 had new capabilities and corporate use cases.  

The general format of a Chatbot system takes inputs looking for yes-no answers or keywords to produce a response. But chatbots are evolving to do more comprehensive processes, including natural language processing, neural networks, and other machine learning skills. These chatbots result in increased functionality, enhanced user experiences, and a more human-like conversation that improves customer engagement and satisfaction.  

Benefits of Chatbots

Improved customer service. Clients want rapid and easy resolutions. HubSpot found that 90% of customers want an immediate response to customer service issues

This is seen with the increase in live chat, email, phone, and social media interactions. Chatbots can provide service to users 24/7, handling onboarding, support, and other services. Even robo-advisors can use chatbots as a first line of contact. 

More advanced systems can pull from FAQs and other data sources that contain unstructured data like old conversations and documents. Chat GPT uses a massive supply of information up to its 2021 cutoff point.

Improved sales. Chatbots can qualify leads and guide buyers to information and products that fit their needs, producing a personalized experience that builds conversions. For example, they can suggest promotions and discount codes to boost purchase likelihood. They can also be a checkout page aid to reduce cart abandonment. 

Money savings. The goal of chatbot deployment for service and sales support is often to reduce casts. Chatbots can service simple and repetitive tasks allowing human agents to focus on complex issues. 

For example, if a small HR team is slowed with holiday and benefits questions, a chatbot can answer 90% of these, lessening the HR team’s load. An Oracle survey found that chatbots could produce savings of more than half of a business’s upfront costs. While the upfront costs of chatbot implementation are high, the long-term cost savings in staff equipment, wages, and training will outweigh the initial spending.  

Chatbot Implementation Mistakes

While chatbots cannot do everything yet, and it will be a long time before they can do many tasks, they have a skill set that can be used. They can help humans, allowing them to work on more human-required tasks.

No human option. This is a mistake many companies make. Chatbots cannot solve all problems, and the client should have a way to escalate their interaction to a human who can solve it.  

Lacking customer research. A bot needs to know what to look for and what to address. If an implementation starts with the most common and time-consuming questions and decides if a chatbot can solve these, it will prove its value many times over. 

Neglecting tool integration. A well-built chatbot will be part of the contact center platform, aiding agents and supervisors. Able to pull info from multiple sources and escalate to a live agent with useful contextual information allowing the agent to quickly take over from where the chatbot ended.

Use Cases of Chatbots

How can businesses use chatbots? Here are a few examples of great implementations improving customer service and outcomes.  

Retail Banking

Banks or online brokers will generally field simple questions from depositors and borrowers. However, many may come at times of vulnerability. The rising cost of living means a closer focus on finances. Clients may have pending transactions, payments, fraud, or other issues; technology could allow them to monitor these in real time. 

If there is only a call center to address these issues, they will have added pressure. But these can be addressed across multiple channels. A banking chatbot with sentiment analysis can handle text-based digital channels (web chatbot, social media, SMS messaging). 

Launched on the website, mobile app, and social media, this virtual assistant can handle first and second-tier queries (credit card payments, checking account balances). The implementation of sentiment analysis can detect upset customers, quickly getting them to a natural person. 

Chatbots can also aid with the creation of balance alerts, alter other settings, and set up payment reminders, ensuring that both the present issue is solved and the likelihood of a future issue is reduced. 

Property Management

As a commercial and residential real estate business grows, more calls are coming in from customers covering a wide range of issues (rent, maintenance, renovations, and potential customers). As a result, they are taking up the contact center’s resources. For example, a chatbot could answer routine renters’ questions, guide them to self-service solutions, or submit a service ticket. 

Chatbots can also collect info that will allow the direction of their query to relevant categorical information or help from the related agent. This reduces high call volume and becomes a source to produce tickets 24/7, not just when the office is open, providing notifications to the clients when their submissions are updated. Chatbots can also be set for rent reminders via text and provide online payment options to improve on-time payments—a win-win for the user and the company’s bottom line.  


Logistics customers want to know where their items are and in real-time. Accurate tracking info is more widely available, but with logistics, there are many variables to contend with on the global level. In addition, high volumes of location requests can overpower a company; even if they are simple requests, they stretch a company’s resources. 

A chatbot can deflect many calls from the call center to automated phone response or web services that have a text chat service, providing callers with a way to track their packages and lowering the strain on the service staff, allowing them to focus on complicated issues.  

Direct-to-Consumer Retail

Online retailers have a lot of spinning plates. Supply chain, warehousing, couriers, drop shippers, and other order fulfillment, and running an E-com site. When one piece fails, there are unhappy customers. If a manufacturer has assembly issues for a hot new product, the company may experience high call volume and service requests, resulting in many refunds and returns. 

An AI-powered chatbot like ChatGPT can be a lifesaver, guiding customers to troubleshooting and instructional media such as video tutorials or the webpage’s knowledge base. It can also take customer feedback and use this information to improve service outcomes, further optimizing flow. 

It can also be helpful in the returns process, streamlining the system, resolving returns without the need for a human team member. In addition, by deflecting most inbound calls to self-service, the call center’s volume is decreased, reducing wait times and producing cost savings. The chatbot could also generate viable leads helping consumers find the right products for their needs while upselling products and services through personalized recommendations.  

Closing Thoughts

All of the use cases for chatbots provided above are currently being employed and are solutions that use chatbots that are less sophisticated than ChatGPT. However, chatbots can provide higher levels of service that can instantaneously scale with a business while doing so at an attractive ROI. 

There are thousands of chatbot implementations possible for today’s businesses, allowing customers to get the real-time service they need with more personalization and specificity than before; this will only continue to improve and expand, allowing more to be provided to consumers.

As chatbots improve their capabilities, their use will likely broaden in scope and volume. Many things humans did in the past, or do now, will be replaced by the faculties of ever-advancing chatbots. These humans will need to be trained to do other work or higher-level service tasks so that we don’t have a glut of out-of-work service personnel. 

On the other hand, this training will result in more satisfying work for employees, which in the long run can improve their lives. Balance is needed to gain further acceptance of chatbots by employees and the populace as a whole.

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

What Are Wrapped Tokens?

If you’ve been investing in cryptos, you may have likely heard the term “wrapped” Bitcoin or wrapped tokens. This article will explore the types of wrapped tokens in the crypto space, why they exist, and what benefit they have to you as a crypto trader or long-term investor.  

Blockchains Are Separated

Different blockchains like Ethereum and Bitcoin use different protocols and have different functionalities. Moreover, due to the fundamental differences in their algorithms, they cannot talk to each other. While this independence preserves the blockchain’s sovereignty and increases security, it makes the existence of an interoperable distributed ecosystem with easy data exchange challenging. 

The ideals of decentralized finance, or DeFi, is a smooth, efficient, and speedy movement of the value, and this is why wrapped tokens can find a place as a practical application. Newer blockchains, such as Polkadot, were developed to solve the interoperability issue that plagues separate blockchains. However, the need for communication between blockchains became apparent, and this communication was possible through the development of wrapped tokens.  

Wrapped Cryptocurrency Basics

Wrapped cryptocurrencies and crypto tokens are cryptocurrencies and assets pegged to the value of another cryptocurrency or asset, such as a precious metal, stock, or real estate, and then minted on a DeFi platform. They have become popular as retail crypto brokers made this asset class more accessible and more advanced in tandem. 

The original asset gets “wrapped” into a digital vault, with a newly minted token created, which can be used to transact on another blockchain. These wrapped tokens allow non-native assets to be used on any blockchain, building bridges between different networks and creating interoperability in the crypto space.  

Wrapped tokens can be created from any asset, art, commodities, collectibles, equities, real estate, and even fiat currencies. However, because wrapped tokens get “pegged” to another asset, it’s required for them to be managed by a custodial entity that wraps and unwraps the asset. We will be discussing why this is a limitation in the crypto world.

The First Wrapped Cryptos

Bitcoin was the first crypto to be wrapped, and the space is dominated by wBTC, which took bitcoin and put it on the Ethereum blockchain using smart contracts. This allowed investors to earn a passive fixed income. There are now many wrapped tokens, most of which use Ethereum’s ERC-20 format or the Binance Smart chain BEP-20 format

Interestingly, though ERC-20 tokens are issued on Ethereum, the native ETH token is not compliant with ERC-20 standards because ETH was developed before ERC-20. Therefore, Ether must be wrapped to comply with other ERC-20 token standards. A tokenized wrapped Ether has therefore been created on the Ethereum platform.  

Cardano, Solana, and Polkadot have begun experimenting with wrapped tokens, facilitating their access to DeFi applications. More recently, projects included the bETH, a wrapped ETH token, which can be traded freely or used as collateral on protocols of the Ethereum network.  

Wrapped Token Types

Stablecoins were, in fact, the first wrapped “tokens.” As a result, they have a significant difference from the more established wrapped “coins.” A stablecoin such as the USDT, the Tether, is, for example, backed by a value of approximately one dollar. 

However, Tether does not keep the exact amount of USD fiat currency for each USDT minted; its reserves include other assets besides cash, including cash equivalents, T-bills, and more.  

There are two general wrapped token types:

Cash Settled

It is impossible to settle these for their underlying asset, only for their cash value.


These wrapped tokens can be exchanged for their underlying asset.

Non-native blockchains will host these two types of wrapped tokens.  

Inner-Workings of Wrapped Tokens

Merchants such as Airswap, AAVE, Ox, Maker, and CoinList will mint the number of original tokens sent on platforms such as Ethereum and act as custodians of that value.  

A similar process is used when the wrapped token must be converted back into its original coins, such as Bitcoin, Ether, or the asset. The holder of the wrapped token will request the custodian to release the token from the reserves. For every wrapped BTC, there is a Bitcoin that a custodian is holding. 

The process employed for minting and managing wrapped tokens remains a limitation in crypto, as a trusted custodian who holds the funds is required. Unfortunately, this requirement needs to be revised for a decentralized distributed network that is supposed to be trustless.  

A custodian is required because traders cannot independently use their wrapped tokens for cross-chain transactions. The technology is, however, evolving, and the potential for decentralized options that solve this problem are appearing. 

Figure courtesy of Cointelegraph

Wrapped Bitcoin (wBTC)

“Wrapped Bitcoin” was first launched in January 2019 and was the first wrapped Bitcoin. The protocol was designed to bring the potential and liquidity of Bitcoin to the Ethereum network and, in doing so, an ERC-20’s flexibility.  

The native BTC was unsuitable for decentralized finance (DeFi) transactions; the wrapped version could be used in place of the original asset to transact within the growing DeFi ecosystem and other Dapps within Ethereum’s network.  

The wrapped Bitcoin is a significant addition to the cryptocurrency space. While a wBTC’s value is equivalent to the original Bitcoin, the added functionality accrued with the change to wBTC increases its value allowing it to be used in DeFi applications.  

A holder of BTC can lend their Bitcoin via smart contracts by simply connecting their crypto wallet to a decentralized lending platform and earning a fixed interest rate each year. Concurrently, borrowers can use their crypto (BTC) as collateral which could automatically go to the lender in case of a default.  

Using this type of financing, holders of the currency can still see returns on their holdings even in bear markets if the value of their asset drops.  

Wrapped BTC, Unwrapped

There are three primary actors in wBTC’s creation and management.  


wBTC’s Decentralized Autonomous Organization comprises 17 members, all from the DeFi space, who hold a multi-signature contract allowing them to add to or remove from the list of wBTC merchants and custodians.  


These administrators trigger the minting of wBTC by sending a defined amount of BTC to the custodian and requesting the mining of an equivalent amount of the wrapped tokens, defined by the investor’s and trader’s demands.  


These trusted agents act as vaults who provide reliability and security for wBTC, ensuring that all the wBTC will be backed and verified via an on-chain proof of reserves. Custodians mint the wBTC and send that equivalent amount of wBTC (a one-to-one pegged value of BTC) back to the requesting merchant.  

In essence, the merchant transfers the real BTC to the custodian’s address on the Bitcoin blockchain, which is then locked. Once the real BTC is received, the custodian’s address mints the equivalent amount of wBTC on the Ethereum network.  

The reverse will happen, and the wBTC will be converted back into real BTC through the burning (destroying) of the ERC-20 BTC token, at which point the locked BTC will be released. The minting and burning of wBTC tokens are tracked and verified on the Ethereum blockchain.   

Why Is There wBTC?

wBTC was created because of the growth of DeFi applications which are now valued in the billions of dollars. These tokens are sent to lending platforms, options, derivatives, and other financial applications. 

The demand for BTC use as an underlying asset in DeFi was such that it needed to be converted to ERC-20 compatible tokens to participate in Ethereum ecosystem Dapps.

Are They Safe? 

From a technical viewpoint, a wrapped Bitcoin token is safe. The original BTC will be in the custody of safe platforms like Ethereum or the Binance Smart Chain. When it is converted to an ERC-20 or BEP-20 token, it will maintain the security of the interconnected network.  

A flaw with the wrapped BTC tokens is the need for trust in a custodian that holds the underlying asset. If that custodian unlocks and releases the Bitcoin to someone else, the ERC-20-compatible wrapped Bitcoin holders would be holding a worthless asset. 

How the original Bitcoin is held determines the security level provided.  

Centralized Custodial Bridge

For example, this organization promises to mint the ERC-20 tokens. The centralized entity must be trusted to hold BTC and not abscond. Users must ensure that these organizations are backed with guarantees and insurance in case something terrible happens. 

Decentralized smart contract bridge

These would be the best choice in the crypto world. There would be no need to trust a third party, only the immutable time-stamped intelligent contract coding.  

The security of wrapped BTC bridges, crossing different chains, has resulted in several arguments in the DeFi community because of the need to rely on custodians to keep the real BTC locked and their financial incentive not to.

Closing Thoughts

Arcane Research reports that the amount of Bitcoin currently locked on the Ethereum blockchain has grown to $3.5 billion as of Dec 2022 (similar to the 3.6 billion Coinbase estimate above). In addition, it is estimated that over 1% (215,800) of Bitcoin’s current supply of 19.2 million coins is now being used in DeFi, all through wrapped tokens of various types. 

Wrapped tokens increase the liquidity and capital efficiency of centralized and decentralized exchanges due to their capability to move assets across multiple blockchain platforms that otherwise would have remained isolated.

Additional advantages wrapped tokens provide speedy transaction times and lowered fees possible with newer blockchains, exceeding the capabilities of older blockchains like Bitcoin and Ethereum’s first generation.  

Wrapped tokens also offer fractionalized ownership which is not usually possible for some underlying assets such as art, collectibles, or a classic car. We might see wrapped tokens appearing with discount trading platforms or as part of greater liquid portfolios. 

These asset-packing solutions make bitcoin and, more importantly, other assets more useful. We will see many items wrapped into fungible and nonfungible tokens that can be used in the DeFi and metaverse moving forward. The ERC-20 and BEP-20 token formats make the world of DeFi possible.  

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

Stablecoins vs. CBDCs

Stablecoins are crypto assets whose values are pegged to fiat currencies, such as the US dollar. Stablecoin operators generally maintain a reserve of fiat currency which equals the token’s circulating supply. 

With the rapid rise in stablecoin circulation over the past few years, central banks have increased their efforts to develop their stable digital currencies. These centralized fiat copies are called Central Bank Digital Currencies (CBDCs), or cryptos backed by a country’s central bank. 

Rather than being pegged to a fiat currency, CBDCs are a digital form of the country’s legal tender. This article will explain some of the critical differences between Stablecoins and CBDCs, and why CBDCs add very little to the global economy.  

The Past Decade

Cryptos have come a long way since the inception of Bitcoin in January 2009. While still a speculative asset, cryptos are evolving into an asset class that is a legitimate investment opportunity as respected investing apps continue to onboard crypto trading. 

The technological foundation of cryptocurrencies, the blockchain, has been shown to have utility in several public and private applications. Blockchain is now being applied in fields from the supply chain to medicine, gaming, ticketing, art, and finance.  

What has also changed is crypto, and blockchain’s favorability with governments. Different crypto projects have garnered different levels of openness to regulation, and different governments have different perceptions about the advantages or threats of cryptos. 

With these recent advances, two unique kinds of digital currencies have resulted. Stablecoins and CBDCs have emerged as potential options that could be widely used for commerce and trade in the future. Being related to fiat, these digital currencies may, at first glance, be similar, but there are significant differences between them.  

What Are Stablecoins?

Stablecoins represent a type of tokenized asset whose value is pegged to a real-world asset, generally a fiat currency like the USD, but there are stablecoins pegged to gold and other assets too. They’re vital for removing almost all transaction fees and enabling the liquid trading of those using advanced crypto brokers

Stablecoin operators usually maintain a reserve of the fiat currency and other assets (including cryptocurrencies) equal to the token’s circulating supply.  

If the project mints more stablecoins, an equal amount of the pegged fiat currency should be added to the project’s reserves, and if “burned” (the process of unminting the coin and removing it from circulation), the reserve is reduced by an equal amount. This method is how many stablecoins maintain their value with the pegged currency. 

What Are CBDCs?

On the other end of the spectrum, Central Bank Digital Currencies (CBDCs) are digital assets (not specifically a cryptocurrency) backed by a country’s or region’s central bank. Rather than being pegged to the fiat currency, these digital assets would be a digital form of the legal tender of the region or country such as China, which is probably the furthest ahead in its CBDC rollout program

Similarities Between CBDCs and Stablecoins

The most significant similarity between stablecoins and CBDCs is that they are both digital currencies that can be used for payment. In addition, the speed by which a digital currency can be transmitted and a transaction completed makes these useful for domestic and international trade. 

Depending on the CBDC, if they are blockchain-based, they can be stored pseudonymously in a crypto wallet like any other crypto. The transactions are all stored on a publicly distributed ledger. However, CBDC programs are generally authorized as (private) blockchain-based.  

A second similarity between the two concerns their volatility. Most cryptocurrencies are volatile; changing 5 to 10% or more in a month is not uncommon, even for Bitcoin and Ethereum, which have the highest market caps. However, while stablecoins and CBDCs are digital assets, most of them are much more stable. 

The final similarity between the two reflects their regulation. Both stablecoins and CBDCs are regulated. Third-party auditing firms regulate stablecoins, and central banks regulate CBDCs. The chance of a rug pull occurring for both digital currencies is minimal.  

Differences Between Stablecoins and CBDCs

The first significant difference between CDBCs and stablecoins is their governing authority. Stablecoins are usually governed by private companies such as Circle or Binance. Still, there are also stablecoins, such as DAI, that are governed by DAOs (decentralized autonomous organizations), or a group of governance token holders that have a vote in the management of the coin. 

CBDCs, on the other hand, are created, controlled, and regulated by the central bank of a country or region that releases the CDBC. Any country can develop a CBDC of its fiat currency and manage its monetary policy just like physical fiat. 

The second difference is that stablecoins are (generally) backed by an equivalent amount of fiat currency. You can exchange your stablecoins for an actual dollar stored in the stablecoin’s reserves. CBDCs don’t have any assets backing them; they only have the promise of the country and its central bank. Governments used to use a gold standard that backed the currency with a supply of gold, but this was given up with the change to fiat.  

Stablecoins fall under the crypto blanket. This designation means that there is a potential for national governments to ban them, and they can be taxed as digital assets. Alternatively, CBDCs would be considered the same as a country’s currency and, therefore, would be neither taxed nor banned.  

Stablecoin’s Issues

Stablecoins have become the standard for international transactions and investments in decentralized finance (DeFi). Stablecoins have chosen to peg with only the most traded currencies, such as the USD, Euro, and Yen, and generally have strict auditing to preserve their international trust. However, there are two primary issues with stablecoins.  

First, there is a need for stablecoins to trust the organization that is managing the coin and the organization that is auditing the coin’s reserves. For example, Terra (now known as Terra classic UST) is a famous algorithm stablecoin that fell from grace because the system, which included a management token Luna, that it relied on to keep its peg with the USD faltered when a significant amount of the coin was traded out at one time. Its holders lost $60 billion.

Similar algo-based stablecoins could have similar issues yet to be tested or discovered. There must also be trust in the reserves held by the stablecoin to ensure that the peg is sufficiently being met and that the auditors are doing their job; any break in this system could cause the coin to falter. 

Second, a stablecoin is only as good as the fiat currency to which it is pegged. If the country falters in its currency management, the coin’s value will fall, which is out of the control of the stablecoin management and its investors.  

CBDC’s Issues                                                                                                  

CBDCs will only be as strong as the fiat currency of the minting country. If a country’s currency is banned from commerce by a nation, government, or organization that does not accept that currency, then they would not accept the CBDC form of it either. A fiat, in cash or CBDC form, is not backed by anything and is at the mercy of its central bank’s control.  

CBDCs are not cryptocurrencies. They don’t even have to be on a blockchain or other distributed ledger. They are controlled by a central authority and can be minted and burned at that authority’s whim. True cryptos are decentralized and controlled by rules that cannot be easily changed. The benefits of blockchain are what make cryptocurrencies unique. They are trustless and immutable. 

CBDCs, if on private blockchains, cannot benefit from these. They don’t incorporate all crypto aspects.

Closing Thoughts

Central bank digital currencies have the potential to “partially” transform economies, making transactions safe, bringing greater transparency and inclusivity to those that have been unbanked. 

However, this is where the benefits of CBDCs stop. CBDCs are not a replacement for cryptocurrencies and stablecoins, which are the basis for DeFi applications allowing them to have a set of uses that CBDCs cannot fathom.

Nearly all countries have turned over their financial controls to central banks. This is the reason that actual cryptocurrencies are of potential benefit. Cryptos are not under the control of any central authority. However, it is unlikely that a country would take back its monetary policy control from its central bank.

Every CDBC will likely be on its blockchain; that is the only way to guarantee control. This system would then require bridges between different countries’ blockchains, such as what Polkadot, Visa, and PayPal are trying to do. The best solution may be a single global cryptocurrency that is not controlled by any central authority and is fully decentralized.

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

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