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What is the Role of Automation and Artificial Intelligence in the Future of Financial Services?

Much like the industrial revolution that took place from the 18thto 19thcenturies, the Fourth Industrial Revolution today will have a ripple effect on all sectors and lines of business – changing how organisations operate, and ultimately, what our day to day lives look like.

For many, change means uncertainty, and uncertainly has often negative connotations. According to the latest CIO survey by KPMG and Harvey Nash, change is very much on our doorstep; the report showed that from 3,600 senior executives surveyed, over 40% of banking executives said they expected a fifth or more of their workforce to be replaced by robots; while nearly half of insurance companies said the same.

Something new, something old

While concerns about automation might exist, the real point to note is that for employees AI will, in fact, be an enabler; allowing them to focus on work that requires more brainpower, creativity and strategic thinking, rather than simply rote or repetitive tasks.

But despite many organisations’ ability to leverage technology to improve key business areas and employee productivity, people still worry about the impact this will have on their job and employment in general.

Why change is good

We are at a point of digital maturity, which has enabled further innovation. Technologies like machine learning are moving from concept to reality and they have driven automation of core processes within financial services.

Technology has the ability to not only replace existing manual processes, but create new ways of doing things, and therefore new jobs will be needed to accommodate this.

For example, given the drive towards efficiency and agility, it’s expected that a lot of jobs will be created in the areas of automation, with more people employed to develop and implement these AI-based automation solutions.

But many still ask the question: Are machines taking our jobs? Or are they merely easing our workload?

The answer is simple. The majority of financial services organisations have not only embraced technology, but are seeing the benefits through workforce productivity, operational efficiency and in driving business growth.

In other words, while jobs will disappear because technology such as AI and automation will be able to perform them better and quicker – removing human error – this will free up people to pursue more meaningful jobs. Ultimately, people and technology will work side by side, with the latter making our job easier.

In fact , seven-in-10 financial sector leaders believe technology will enable them to overcome many of the socioeconomic issues they are facing today. With an increasing number of banking leaders looking to implement AI, biometrics and robotics over the coming years, it is encouraging to see that not only have financial services organisations embraced technology, but they say it is key to improving employee productivity, operational efficiency, and fuelling business growth.

Artificial Intelligence and customer service

At the same time, we can expect Artificial Intelligence to take centre stage in the interaction between the bank and its customers. This is something both consumers and the banking industry are ready for.

When it comes to consumers, AI is the second technology they most want to see implemented to improve their experience in banking over the coming year. Given the potential impact of AI, it’s unsurprising to see that almost half (42%) of banking leaders are also looking to implement it in the next 12 months.

We’re already seeing AI become more and more common in the use of chatbots for customer service. We’re really just at the start here, however, and we’ve all experienced frustrations with automated services that are too simple and not yet ready for the market.

But this will improve hugely in the coming years, and we can expect a far better relationship with our banks in future.

Robots and humans, not robots vs humans

As further transformation of the sector looks inevitable, it is vital that organisations consider how new technologies can shape their future workforce, to ensure they are ready to compete in a diverse marketplace.

Advances in technologies like Artificial Intelligence and Robotic Process Automation (RPA) will also have a significant impact on efficiency. These are the tools that will see mundane, repetitive tasks automated – improving accuracy, speed and ultimately driving down costs.

This will all be key to keeping up with a fast-moving business world where expectations and needs can change in the blink of an eye.