While artificial intelligence (AI) has been adopted by non-financial institutions for many years, most financial institutions are just at the early stage to employ the technology due to the following reasons:
– Lack of knowledge about the technology
– Lack of clarity of business goals: how much the existing infrastructure needs to be changed to adopt new technology and whether benefits outweigh costs
– Shortage of talents to analyze big data and provide meaningful insights
– Data governance is not well established
– Data is distributed in isolation
– Concern with regulated compliance as “Bankers won’t want to answer extra questions later like, ‘Why did you use this type of solution here?’”
Though we see many hurdles preventing financial services from quickly adopting the technology, there are many increasingly important benefits AI will bring such as efficient fraud detection and cost reduction. As a result, in the near future, AI is expected to be a must-have weapon to compete in the market. Financial institutions need to put more efforts into catching up with the technology by working with regulators to ensure they are comfortable and acquiring talents. Certainly, AI will reduce human work a lot but it cannot completely replace human as hackers are oftentimes smarter than machine and we need people to detect things machine miss or fix things machine wrongly recognize.
Source:
1. https://thefinancialbrand.com/63322/artificial-intelligence-ai-banking-big-data-analytics/
2. https://www.americanbanker.com/news/how-paypal-is-taking-a-chance-on-ai-to-fight-fraud