Industry News Details

How Artificial Intelligence Is Already Disrupting Financial Services Posted on : May 16 - 2019

Digital technologies drive business disruption. Today, artificial intelligence (AI) is at the forefront of financial industry disruption, allowing these firms to look differently at operations, staffing, processes, and the way work is done in a human-machine partnership. In PwC’s 2019 AI survey of US executives, financial services executives said they expect their AI efforts to result in increased revenue and profits (50%), better customer experiences (48%), and innovative new products (42%).

AI encompasses an array of technologies, from fully automated or autonomous intelligence to assisted or augmented intelligence. Financial firms are already deploying some relatively simple AI tools, such as intelligent process automation (IPA), which handles non-routine tasks and processes that require judgment and problem-solving to free employees to work on more valuable jobs. Banks have been using AI to redesign their fraud detection and anti-money laundering efforts for a while, and investment firms are starting to use AI to execute trades, manage portfolios, and provide personalized service to their clients. Insurance organizations, in turn, have been turning to AI—and especially machine learning (ML)—to enhance products, pricing, and underwriting; strengthen the claims process; predict and prevent fraud; and improve customer service and billing.

But before financial institutions can reap all of AI’s benefits, they must first overcome challenges, including security, privacy, bias, and regulatory issues. The greatest challenge may be the need to win customer trust: ensuring that AI systems are trustworthy is the top challenge of 40% of the financial industry executives in our 2019 AI survey.

Many of these leaders plan to improve the trustworthiness of their AI initiatives in 2019. Sixty-four percent of them plan to create AI models that are explicitly transparent, explainable, and provable; 60% intend to improve AI security with validation, monitoring and verification; and 54% expect to improve governance with AI models and processes.

Another challenge facing financial institutions is the shortage of workers with the tech skills and expertise needed in today’s AI-enabled business world. Currently, almost a third of the financial executives in the AI survey are worried that they won’t be able to meet the demand for AI skills over the next five years. View More