Shamayun Miah- Scaling Artificial Intelligence in FInancial Services
Technology has become a major integral part of society today. As it continues to advance all around the globe, the adoption of artificial intelligence for financial service delivery has come into our daily lives. Within 70years of its inception, it has become a significant force to be reckoned with. AI has changed the outlook of financial service industries and consumer financial services.
Artificial intelligence has continued to thrive because of advancements in algorithms, machine learning and the vast amount of use case developments, including Retail Credit Scoring, Robo Advisory, Procure to Pay, Insurance Pricing etc. Financial institutions are the leading adopters of Artificial Intelligence and analytics technologies, closely followed by the retail industry. Blog” by Shamayun Miah The Future of Bricks-and-Mortar Retailers Post COVID-19
There is a general acceptance that financial institutions will only succeed by responding to today’s technological demands. Senior executives in financial services recognize that they need to keep pace with AI and digital technologies in general because of its growing impact on financial service delivery and customer experience.
AI technology in financial services allows for more accurate decisions, machine to human interactions, enhances cyber security, and reduces risk. It is too early to fully appreciate the ultimate impact AI will have in the industry and how it can reinvent financial services. Many of the services created today using AI will evolve significantly over the coming years. Artificial Intelligence’s ability to analyze the vast amount of data at speed, learn, adapt, make decisions, and predict will inevitability mean that it will significantly impact on society and our environment. Institutions adopting such capability will have to consider the potential ethical and legal implications.
Artificial Intelligence in Financial Services Industry
Financial industries are taking advantage of AI technologies more to improve customers’ experience. Both the front office and the back office have expanded their use of this technology. Biometric clearances like fingerprints, voice identifications, video for authentication, face ID security, machine learning to detect fraud patterns and prevent cyber attacks, conversational bots for service requests, real-time transaction analysis for risk monitoring, and many other use cases are adopted to serve clients better.
According to Forbes, 70% of financial firms use machine learning to monitor cash flow and cash events. AI is usually more precise in some decision-making, like establishing the loan eligibility of a client without any bias. AI technology maximizes customer service. At the same time, AI helps financial industries simplify and optimize processes ranging from credit decisions to quantitative trading and risk management. Although high technology innovation will have a positive impact, it is still important to note that it will call for a larger AI workforce with a deep understanding of how to navigate this tech. Artificial Intelligence Specialist, Machine Learning Research, and Data Scientist are some of the highest-paid IT jobs in the USA (2021)
Financial industries are AI-first when their plans and strategies are geared toward AI and technology as the central drive. Financial industries become AI-first as they invest in all four layers of the integrated capability stack: Engagement, AI-powered decision making, core technology, and data & operating.
Benefits of Artificial Intelligence
- Reduces repetitive work through process automation: Some tasks can be time-consuming and repetitive; AI can automate tasks like this to help save time. Other activities like trading are now fully automated using analytics, robotics, data, and AI.
- Data and Insight: The enterprise’s volume of structured and unstructured data is growing exponentially. Artificial Intelligence can analyze massive amounts of data quickly and with super efficiency, outlining patterns, trends and anomalies that would most probably remain undiscovered. The institutions that can process, analyze, and understand their information intelligently will find themselves with a competitive advantage.
- Hybrid Workforce: The Financial Services, Healthcare, and Retail sector are some of the most advanced sectors to adopt cutting-edge AI innovations to accelerate the productivity of its employees. The hybrid workforce in Financial Services involves the interaction between humans and machines for serving the end customer.
Ethical Considerations of Artificial Intelligence
Every good thing also tends to have its shortcomings. AI does not come without its ethical challenges.
- Privacy of clients and safety: Users of AI analytics must have a thorough understanding of the data that has been used to train, test, retrain in their AI systems. This is important, especially when data are built on third-party platforms and involve personal data.
- Weaponized Artificial Intelligence: Biased or unethical uses of AI have become a common practice by criminals. There are thousands of cases of AI being manipulated or created for unethical purposes every day, like identity theft, mass surveillance, hacking, AI-based malware attacks, and ransomware.
In conclusion, AI-first will bring rapid innovation to financial institutions. It will allow banks and financial services to dynamically create new products and services based on individual customer needs. It will enable FinTech’s to compete with traditional banks – Blog Shamayun Miah Digital Reinvention of Traditional Banks to Fintech
It will allow transformative use case development and massive revenue generating potential. However, to benefit from AI, Financial services will require highly skilled talent in this technology which is difficult to source and will need to build responsible AI based practices and partnerships.