Artificial intelligence is set to transform the banking industry, using a vast amount of information to construct models that enhance decision-making and manage risk.
FREMONT, CA: In the latest years, artificial intelligence (AI) deployment has been a hot subject in nearly every industry. AI is still at an early stage in the field of business applications. But it doesn't fit smoothly into any pre-existing IT hype and reality patterns or assumptions. There are signs, both anecdotally and in market studies, that AI enjoys a rush of commercial interest, fueling expectations that its effect on the companies and other aspects of culture will be game-changing, groundbreaking, and even revolutionary.
In a recent study conducted by the Global Association of Risk Professionals (GARP) and analytics leader SAS, it was found that 4 out of 5 respondents said that AI is already benefiting their organizations. For optimization and forecasting, majorities said they were presently using AI systems; machine learning is not far behind.
There are huge numbers of practical and operational challenges when it comes to using AI in the organization. The problems range from the need for a basic familiarity with these systems to finding out the necessary technical talent to maintain the quality of input data and being able to understand and explain how AI models produce their outputs.
• AI Adoption Trends: In the GARP/SAS survey, organized in December 2018, more than 2,000 total responses were taken into account from the financial services industry, including banking, investment banking/securities and wealth/asset management. The most common departments to use AI were risk, finance, and IT. The non-user departments also are planning to shift to use the technology that would bring AI to a whole new level. AI enables marketing and risk teams to pool loan information more efficiently and create products that are more tailored to the requirements of clients. AI allows all information to be used, making findings more accurate and thus helping to decrease danger.
• Future of AI and Challenges: There is a chance that most of the organizations will inculcate AI in their daily network to make work more efficient and easy-going. The challenges faced to use in AI in organizations varies from data availability and quality of data, lack of understanding, lack of necessary skills and trained personnel, time to realize benefits, cost of implementing and interpretability of the model.
• AI and Different Skill Sets: Nearly all participants expect AI to enhance their employment in at least somewhat different ways over the next three years: higher efficiency, quicker data insights, more rapid data insights, and better choices. However, there is uncertainty in terms of the job market. The main areas of concern are lack of talent, biased decision, explanation of data outputs will be tough, and it may eliminate jobs.
The findings of the GARP / SAS study confirm that there is a great interest in artificial intelligence in the financial services industry, especially in advancing the tasks of risk management. Adoption is very rapid, particularly toward the field of risk management. Along with the quick confirmation, challenges are raised. All indications from the survey suggest that AI technology is here to stay and will become an increasingly vital instrument for risk surveillance, modeling, and analytics.