Publication

Artificial intelligence lives its "financial moment"

May 03 2019
INCAE Executive Education

Artificial intelligence (AI) is introducing innovation in many fields, and the financial sector is one of those that can get the most out of this set of technologies. 

Banks are already being invaded by robots... But precisely that may be what saves them from ending up disappearing. Perhaps it is in the financial sector where more investment is being made, where there may be greater prospects for use and transformation and, why not say it, where more money can be made, given the gigantic size of the global financial industry.

And it is that few industries could do better with the widespread implementation of artificial intelligence. The decisive factors for this are: 

a) First, that the sectors, if there are any more, with a greater volume of data and figures than the financial sector can be counted on the fingers of one hand. 

b) These data are also extremely accurate over time. And having reliable historical records is the raw material for building accurate algorithms in artificial intelligence.

c) In addition, the quantitative nature of the world of finance is a plus, since it is much easier to build algorithms with quantitative and structured data than with unstructured data, such as those derived from images or natural language, for example.

The result is that there are more cases of use of AI in the financial sector than ever before, And this is a trend that will continue to grow as banks invest larger amounts in the development of this technology.

Therefore, we can affirm that artificial intelligence is experiencing a true “financial moment”, and yet we are still in the teens of this technology. 

The consulting company Atos periodically conducts an analysis of emerging technologies that may impact the financial industry, and in its November 2018 edition it identified artificial intelligence as one of the ten disruptive technologies that would shape the financial sector in the coming years, classifying it as an "adolescent" technology (that is, with some use cases, but not yet adopted by the majority of players in the sector) and with a "transformational" impact at the business level (the maximum possible impact within its classification ).

Therefore, we are facing a technology that is just beginning, but with enormous transformative potential in many sectors, especially in the financial sector. 

Most banks, at the end of 2017, were already developing numerous artificial intelligence applications, according to the DBR consultancy survey of directors of financial entities. These professionals were asked if they were considering implementing an artificial intelligence solution in the next eighteen months. 

The results were revealing: 

15% had already implemented one or more solutions
13% planned to implement it between the following 6 and 12 months
9% planned to implant it between 12 and 18 months later
38% It stated that it had it on its implementation roadmap within the next year and a half.
25% had no plans to implement any artificial intelligence solutions in the mentioned 18-month period

Artificial intelligence projects in banks are underway, but there are several areas that have developed considerably and already offer a good number of use cases. It is mainly about the management of financial assets and the detection of fraud, but also others, such as personal finances or the granting of loans. We will take a closer look at them below. 

Excerpt from the article published by Harvard Deusto Business Review.
 

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