AI has come to financial services. Asset managers and asset owners that are thoughtful and creative can gain an advantage in the race to derive value from big data.
A variety of financial services companies are increasingly using artificial intelligence (AI) and machine learning (ML) to do more with their data. A recent paper developed by The Economist Intelligence Unit and commissioned by Northern Trust discusses how the financial services community can derive value from AI.
As AI becomes more popular, firms need to think strategically and carefully about where AI can be implemented to maximize benefits.
IT BEGINS WITH DATA
Data sits at the heart of AI, so organizations must first articulate their goals and examine how data is used in support of those goals. Only about half of asset managers have appointed an AI leader. In many cases, this role is undertaken by the CIO or COO, according to a survey by Deloitte. Since these roles often have other operational responsibilities, the lack of a chief data office (CDO) suggests that data and AI are not always getting the attention they need. AI projects often require ongoing oversight to ensure that they are helping the business meet their goals. The danger is that, without clear direction, financial services firms may be unable to collect, analyze, and understand data effectively.
AI IN ACTION
The ways in which AI can support financial services is rapidly expanding. IBM’s Watson Financial Services technology, for example, now offers automated support for regulatory compliance, keeping users up to date with changes and ensuring compliance. Watson can analyze reams of unstructured data, such as regulatory text, and identify where the institution needs to act. From that point, humans make decisions which are fed back into the system so that it can “learn” more. Other examples are emerging, such as analyzing investor behavior to design improved financial products.
Asset owners are also on the AI journey and using it to improve the experience of their underlying investors and stakeholders. For example, Rest, the AUS$50bn super fund, uses an online virtual assistant, known as Roger, which supports users through the web, a smartphone app, and Google Home. Roger can already respond to 96% of questions posed to it online, a success rate Rest expects to be replicated when using Google Home.
Potential use of AI in financial services is vast and will likely impact all facets of the industry. Collaboration among asset owners, asset managers and technology firms is key to success. The companies that will benefit the most are those that are thoughtful about how AI can improve their organizations, rather than implementing AI for the sake of it.
To read the full paper and get more insights from Northern Trust on artificial intelligence, click here.