The rise of Artificial Intelligence will greatly affect the Financial Services Industry, Here's how:
Artificial Intelligence or AI recently took a giant step in machine learning. Libratus an AI robot reportedly won $1.5 worth of chips from the top four poker players in the world, during a three-week challenge.
The Financial Sector (FS) has long been one of the leaders in pushing new technology trends using data analytics, mobile banking and new methods of payment.
Although, there is a new wave of development coming that is sure to shake up the industry and FS providers are scrambling to make sure they are ready to reap all the benefits from it.
The FS is widely thought of as the top of the chain as far as putting the latest technology into practice, however, some in the industry still struggle to handle cloud based or legacy tech platforms and apps.
Larger scale analytics platforms like those on trading floors and also mobile payments for many consumers are now the norm or at least on their way there.
Connected devices and smart machines have been used by many FS organizations for close to 10 years, however, AI is expected to make its biggest splash yet.
Why is there a sudden boom when it's been around so long already?
The rise of the internet and of technological mobility have brought AI front and center in conjunction with new breakthroughs in new hardware infrastructure, this is influencing drive improvements for AI.
Tech giants far and wide are currently developing top of the line AI systems, however, it remains to be seen how the FS implements and utilizes these up and coming advances.
Larger companies will for sure struggle out of the gate and be forced to take the start up mentality and rid themselves of the older legacy tech systems they tend to use.
So this means start-ups should benefit right off the bat when the new wave of AI hits the scene.
Larger companies will catch up if they so choose－it will simply take them a bit longer to adjust.
They could do something like set up what is called an internal "incubator" or a venture team which the sole purpose would be shifting gears toward the start up way of doing things.
The time is now for companies to prudently get ahead of the curve, as the new AI is still being developed.
The last decade has seen almost a complete makeover for the banking industry and financial service providers.
They've had to deal with stringent regulation all the while navigating market volatility along with ever-changing technologies.
Brexit has even played a part in the uncertainty of the FS sector in regulatory terms.
The industry can be very complicated, but AI is able to streamline the process and uncomplicate matters by making things basic and straight to the point.
High volume-low value added tasks are able to be scaled up or down and performed by apps when needed.
One example is with accounting.
AI can be used to record journal entries and fixed-asset accounting, as well as processing payments from vendors or auditing expense reports.
What this does is allows for the streamlining of operations, which saves money in the long-term.
With a more personalized structure or platform, FS companies will have the tools to work at a higher level than ever before, in turn providing their customers with a more enhanced experienced over time. Take insurance companies as an example,
Having more personalized products and solutions for the customer will enhance their experience but also give financial firms the tools to perform at a higher standard.
In insurance companies, for example, the data
collected from connected devices can facilitate a better understanding of a customer's risk profile, allowing them to price more accurately and provide a more personalized offering for the customer.
Identifying and explaining risk exposure changes can also be performed by AI.
The biggest thing AI may someday be able to do －maybe even bigger than winning $1.5 million poker chips－is in changing the way the challenges posed by regulations and subsequent compliance are dealt with.
Most of the regulatory AI technologies are in their nascent stages, however, the ceiling is high for banks to use the software to uphold regulations in the most efficient manner.
What was was generally thought of as an idle and or tedious process, has the potential to become a swift and smooth means to an end.
This is an interesting time to be in the FS sector and the future is looking bright for both the institutions and customers alike.