AI could take over finance, but there are still risks

artificial-intelligence/IT/tech/technology/MACHINE-LEARNING/finance-industry/fintech/Bravura-Solutions/start-ups/fca/

12 July 2019
| By Chris Dastoor |
image
image
expand image

Machine learning and artificial intelligence (AI) could have a significant impact on the finance industry, but potential consequences still need analysed before being implemented, according to the “Artificial Intelligence and Machine Learning in Financial Services” roundtable hosted by Bravura Solutions.

There was broad consensus at the roundtable that machine learning could be used effectively to take on laborious work that required precision and accuracy, freeing humans to do more interesting tasks where they add creative value.

Among the talking points of the discussion panel:

  • In the short-term machine learning is likely to be used to improve operations and quip humans with better information to drive good client experience.
  • There is a growing body of evidence to suggest that algorithms are better at exercising judgement than humans. To implement machine learning, businesses need to identify where machines are better to work and where humans add value.
  • Representatives from larger firms agreed they would first look at how machine learning could improve operations. Operations needed to cope with new business flows and poor operations could cancel out the benefits of implementation.
  • Smaller firms want to use AI to scale-up as start-ups could find machine learning help them disrupt and achieve scale cost effectively.
  • Data sharing offered a personalised service that would be cost effective to more consumers in an area where machine learning could make an impact.

There are still drawbacks as Simon Clare, Bravura Solutions, said: “Imagine you built a robo-adviser giving people advice based on historical model training and the Financial Conduct Authority (FCA) comes along and asks, why did you put this person into these particular products? And you say. Well the training algorithm said to. It is not an answer the regulator really wants to hear.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

TOP PERFORMING FUNDS