The term artificial intelligence (AI) has already become part of our daily lives - how we manage our finances, invest and get insured.
The term artificial intelligence (AI) has already become part of our daily lives – how we manage our finances, invest and get insured.
In particular, the financial sector is currently exploring the application of chatbots, personal assistants, robo-advisors and others machines capable of performing specific tasks that normally require human intelligence. But what are the larger implications of this technology-driven trend?
The Promise of AI
Research released last year by Accenture, a global professional services company, found that the introduction and further development of AI could improve labor productivity by 40% by 2035.
“AI is poised to transform business in ways we’ve not seen since the impact of computer technology in the late 20th century.”, commented Paul Daugherty, chief technology officer at Accenture.
“The combinatorial effect of AI, cloud, sophisticated analytics and other technologies is already starting to change how work is done by humans and computers, and how organizations interact with consumers in startling ways. Our research demonstrates that as AI matures, it can propel economic growth and potentially serve as a powerful remedy for stagnant productivity and labor shortages of recent decades.”, as the researcher elaborated.
Another recent study conducted by consultancy company Infosys revealed that financial organizations invested much more in AI than other businesses ($14.6 million versus an average of $6.7 million for all respondents).
“76% of senior decision-makers agree that AI is fundamental to the success of their organization`s strategy”, as the research paper found.
The main AI technologies set for deployment in the respondents`organizations are big data automation, predictive analytics and machine learning, among others, as the paper pointed out.
Are Machines Taking Over?
AI may be used by traditional banks and financial technology companies to improve customer experience.
For example, the British bank Santander recently became the first one in the country to offer voice-activated payments. Besides, First Direct and Barclays have also used voice recognition to authenticate telephone banking customers. The Japanese banks Mizuho Bank and Mitsubishi UFJ are among the pioneers in deploying robots in customer service, as finextra.com reported this September.
Another prominent example is PayPal`s open-source AI engine that can spot suspicious transactions and fraudalent activity. Also, the US-based bank JPMorgan is using a Machine Learning program named COIN (Contract Intelligence) to review commercial loan agreements in just a few seconds.
On a governmental level, the UK government has recently announced its plan to invest 17.3 million euro into university research of AI technology like Apple`s Siri, Amazon`s Alexa and driveless cars, according to a report published at the Independent (independent.co.uk).
“There has been a lot of unwarranted negative hype around Artificial Intelligence (AI), but it has the ability to drive enormous growth for the UK economy, create jobs, foster new skills, positively transform every industry and retain Britain’s status as a world leader in innovative technology.”, as Jérôme Pesenti, CEO of Benevolent Tech, who will lead government research into AI, told the Independent.
However, some experts fear that AI will leave a large group of employees jobless and without the needed skills to adapt. More specifically, Infosys` research found that 90% of respondents believe that 90% of employees have concerns about AI and 88% believe the same for customers.
On the bright side, the vast majority (80%) of respondents`organizations that plan to replace roles with AI technology will redeploy or retrain displaced employees, as the study said.
Most decision-makers at financial institutions and companies feel that AI is inevitable. As a result, many organizations have started the active exploration of AI`s possible applications. AI`s adoptation is bound to impact the world of financial services – leading industry players, employees and customers.
However, the key question is how to maximize potential, while addressing ethical concerns. As Infosys` research paper concluded:
“What is clear, however, is that the successful use of AI requires balance: greater automation versus employee engagement and customer satisfaction versus changing business models. The goal is to harness the vast array of possible rewards while also minimizing the many potential risks.“