How Artificial Intelligence is influencing the future of the finance industry
The new deal between Barclays and Amazon highlights the importance of AI in finance.
The financial times recently highlighted the importance of the agreement between Barclay and Amazon, providing a seamless shopping and payment service for customers in Germany. The article explains the significance of the deal and the underlying race at banks and technology companies to discover techniques to utilise big data and artificial intelligence in the finance industry.
Industry experts believe the next steps in this process are key and will define the future winners in the finance industry. Barclays and Amazon are integrating their data with AI analytical tools to measure and determine credit, and predict what services customers will require next. Jes Staley, the CEO of Barclays believes the new partnership with Amazon is one of the most important moves to happen at the business in the last few years.
The potential power and capabilities of AI and in particular ‘deep learning’ offer many opportunities for the finance industry. Jack Ma, the founder of Ant and Alibaba was one of the first to appreciate the true potential of AI in finance, using customer and corporate online activity to assess and predict credit risk and generate bespoke services.
Incorporating AI into finance can enable financial businesses to provide customers with more choice and better-designed services at more affordable pricing options. AI systems can measure credit risk allowing a company to provide cheaper loan services and if used appropriately can detect and potential cases of fraud.
There are a number of challenges that come with introducing AI but one of the biggest noted problems is that AI and machine learning applications could result in new issues of interconnectedness between financial markets and other institutions.
The benefits of incorporating AI technology, however, are vast and are continuing to encourage further transformations in finance. The Financial Times suggests a number of measures that would support the adoption of AI in finance. Firstly, businesses moving towards these activities must incorporate regulated measures within a finance framework. This means, key groups, central bankers and regulators must continue to maintain an oversight of fintech and be aware of new areas of business.
Secondly, regulators and risk managers must connect all information systems. At the moment, there are very few people that really understand AI and finance. What generally happens is that there are experts in each field, separated into different teams and departments. Many industry experts believe this is a significant issue and requires a major shift in how AI and finance are integrated.
The third measure is to ensure the creative side of AI-focused services for finance incorporates a holistic overview. This means ensuring the people responsible for implementing these technologies are aware of the wider impacts.
The final measure highlighted by the financial times refers to enhancing the engagement of AI technology, from a public and political perspective. Instead of placing all the responsibility on technology professionals, politicians and other stakeholders must be actively involved in how AI is incorporated into a finance business. The sheer progression and capabilities of AI are very exciting but equally requires a level-headed approach and a combined strategy that involves multiple stakeholders.