How AI Is Transforming The Financial Industry?
Financial institutions are using AI to make better recommendations to customers and more thoughtful decisions company-wide. Banking and financial services firms use AI to mimic human logical reasoning skills. Its technology analyzes chat conversations to understand the unique circumstances and personal preferences of each customer, illuminating purchase mentality, bias, and other subtleties that lie beneath the surface. Artificial Intelligence is helping financial institutions to make better decisions and advice to the customers. Banking and financial companies This provides the capability to the financial firms to provide personalized advice and analytical insights about their customer network.
Andrew Dowling, Managing Director, Research, Vicc Cognition said that what lifts AI beyond other specialized fields "is you have human beings that are developing the technology, and the human beings are doing the work to turn it all into a rich experience." Thus, he does not see AI taking over from people in his field. In fact, he's "no supporter of the disillusioned idea of a smart machine and smooth engine." He hopes AI will "stay out of the workplace" and that it will be adopted by institutions, like medicine, for reasons other than to replace humans entirely.
Morgan Stanley has started using deep learning from development company Vicc to and refine their decision-making process. Although the foundation of their AI strategy going forward is to scale their AI expertise and operational capabilities at the investment bank, Morgan Stanley is exploring the use of real-world technologies in other divisions of the firm, such as operations management. This work is an "enormous learning opportunity" that they hope to graduate into their senior leadership team in the near future.
Morgan Stanley made the decision not to invest in AI to reduce operational complexity during the Financial Crisis, according to Wiebe. However, this operational reduction came at the expense of human capital, and they believe that the flipped perspective would be more beneficial. "Having people refine the machine," said Ranee Youns, Research Director, Consulting, Morgan Stanley AI, "is not as costly as having people refine the product. Now, we have to ask, what benefit is this actually getting us?" Probably desired applications of AI in finance include understanding and predicting market volatility, spotting risks, and maintaining moving targets.
Today, chief finance officers of many of the firms—including Morgan Stanley—work across different functional areas, placing the AI application either in IT or finance. By putting this high value decoupling on data across the corporate function and their entire communications department, decision-makers would be able to see that they obviously don't need to hedge their portfolio of assets the same way they would while manager-level deliberate. However, the biggest worry for this field can be the onslaught of social media data, as well as the rise of uncertainty in financial markets. Players in crisis management and risk analysis may need to reevaluate their current methodology and ask themselves questions such as: "how do we detect the root cause of a previous cycle of financial crises?" Additionally, the financial industry might require to demand more regulatory disclosure."
A lot of what they are doing today is optimizing the message to have more engagement of the appropriate specific demographic," Wiebe said, alluding to lobbying by the U.S. Her appointment includes overseeing predictive modeling and pre-industrial analysis abilities. She encourages investment in the space, as it may help mitigate some of the changes in regulation, financial sector structure, and the erosion of credibility of the financial institutions where they exist. The UK Financial Futures Association's Clearing Office also has a list of requirements, which they rely on for their respective inter-bank and private portfolios. They have been aggressive in implementing this strategy in recent years, and expect more to come.