As the World Economic Forum publishes the most extensive and in-depth report yet on artificial intelligence's transformation of the financial services sector, Internet of Business editor Chris Middleton presents a 3,500-word breakdown of the document's key findings and highlights. The financial services sector is in the vanguard of deploying artificial intelligence (AI) worldwide. However, the technology has the potential to be either a transformative and beneficial force, or a destabilising, even existential threat to the global financial system, according to the World Economic Forum. This risks of economic contagion spreading via the technology are real, it says. The WEF has published an in-depth report, The New Physics of Financial Services: Understanding how artificial intelligence is transforming the financial ecosystem, produced in collaboration with C-level executives, analysts, and technology specialists from across every part of the industry. The 166-page sector analysis finds that the bonds that have historically held financial institutions together are weakening as a result of new technologies. This is creating new threats, new opportunities, and new centres of gravity where emerging and established capabilities are being combined in unexpected ways.
Artificial intelligence (AI) is one of the most impactful technological revolutions the world has witnessed. Customers today are increasingly exposed to advanced technologies such as AI-enabled chatbots and intelligent voice assistants like Apple Siri, Google Assistant, and Amazon Alexa, making personalization a high priority for incumbent banks. Today, AI enables financial institutions to solve many critical problems, thereby saving money and increasing the efficiency of the workforce. By deploying AI-based solutions, banks can improve the outcome in various dimensions such as customer service, risk management, cross-sales, etc. A MEDICI research study of 34 major banks across several geographies (US, EU, Singapore, Africa, Australia, and India) found that 27 out of these 34 banks have implemented AI in their front-office functions in the form of a chatbot, virtual assistant, and digital advisor.
Artificial intelligence, machine learning, neural networks or whatever other fancy terms industry is coming out with for what is defined as the sophisticated computer technology that is becoming widely utilized to understand and improve business and customer experiences. I assume you have heard of it before, but the way it is defined today is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Digital IQ, as the measurement of how well an organization can understand its business processes and the content and data within them from a variety of critical perspectives, will play an increasingly important role in every digital transformation strategy as more enterprises come to the realization that they must have visibility into their operations. Digital Intelligence solutions will help organizations increase this business-critical ability by optimizing automation initiatives and complementing platforms like RPA and BPM. In 2020, more organizations will adopt digital intelligence technologies into their overarching digital transformation initiatives, as enterprises realize that these solutions illuminate paths to improved customer experience, reduce operating costs and sharpen competitive advantage.
With current technologies like artificial intelligence, machine learning and data analytics being democratized in everyday applications, the IT industry has almost successfully transitioned into the Digital Era. When talking about digitization, one idea most industry leaders agree upon is that automation is the need of the hour. Along with other new age technologies, Robotic Process Automation (RPA) too has made a mark in the IT industry and according to Gartner 85 percent of big organizations will have deployed some form of RPA by the year 2022. While RPA is meant to bring about efficiency and reduce errors made in mundane and tedious work done manually by humans, it does give rise to the question of will there be a loss of jobs in the IT industry due to democratization of RPA. Automation, a popular emerging technology has an assured place in the future of global businesses.