AI in The Financial World

As approaching the end of another year, the progress of Artificial Intelligence (AI) does not seem to be plateauing any time soon. AI is progressively being integrated into many industries, and with this newfound ‘popularity’, there are 2 contrasting narratives around the recent technological advancements that the people have. It is a battle of Efficiency and Accuracy VS Judgement and Morality.

People who prioritize the efficiency and accuracy that is introduced by the incorporation of Artificial Intelligence believe that the pros outweigh the cons and discuss the following advantages:

1. The Automation of Manual Work

a. Its common knowledge that banks work with an enormous amount of data that frequently needs to sift through, sorted, updated, extracted, and uploaded; this is seen as a very tedious and time-consuming job for humans. However, AI has the capability of going through this data quickly. It also has the capability of identifying patterns that may have been missed by its human counterpart. These can also be used to find errors in the data (if there are any present).

2. Identification of Fraud and Scams

a. Bank fraud is now becoming a more common occurrence, and with that, scam/ fraud detection is becoming increasingly challenging. Through the utilization of Advanced-Data Crunching, financial service providers use Artificial Intelligence to mark anomalies for further review. This is currently the only real-time solution to preventing fraud (including the prevention of false negatives and positives), as other methods are only applicable post-transaction.

However, some people believe that there are some negative aspects that come along with the adoption of AI in specific work environments. They think that the problems that arise are more severe than the improvements that will be made to the current ‘working-life’:

1. Very Expensive

a. Firstly, the production of AI would require a lot of money, due to their complexity and the difficulty of the initial setup. Additional costs would rake up due to the necessity of constant maintenance. Since the data that is being handled is overly sensitive, the case of errors, faults, and failures will inevitably end up costing the bank a lot of money and time.

2. Unemployment

a. Unemployment is a huge problem in developing countries, and the application of AI will cause a further decline in available jobs for people. Although AI might increase the productivity of the specific job that is being replaced, this may lead to lower morale and effort from the other employees, as they will also begin to feel ‘replaceable’. In turn, this will cause a depreciation in their efficiency (resulting in firing/termination) or voluntary resignation. This will place an overall burden on places such as banks, as AI can replace the tellers, CSEs, and various officers.

In each revolution, we create a brand new way of trading, transacting, and storing value — but we don’t get rid of the old ones. So, 5,000 years ago, we invented money; we still have money. Three hundred years ago we invented banks; we’ll still have banks. But in this revolution, the digital revolution, seven billion people on this planet can get access to real-time trade. And that means that there’s a new way of thinking about how we’ll create this Internet of value, and what it’s going to look like the longer term.
— Chris Skinner

Since now some of the advantages and constraints have been made apparent, it is up to you to decide which you would prioritize: Efficiency and Accuracy or Judgement and Morality.