Experts predict huge job losses, cost savings, and increased efficiency for financial institutions
Finance industry commentators believe that artificial intelligence (AI) will replace many existing financial services positions. Along with blockchain, digital transformation and regulation, AI is a technology set to roil banks now and in the coming years.
Join us in this article as we dive into the topic of AI in finance and what its growth and sophistication mean for financial professionals.
Repetitive, single-function jobs are immediately under threat
The most menial of positions will likely come under AI threat first. These positions that rely on repetition, which are more easily "taught" to a program include:
Bank tellers and cashiers
Receptionists and secretaries
Call center employees
Data entry keyers
By replacing repetitive positions with sophisticated algorithms, engineers can enable financial institutions to generate massive efficiencies, notably in lowering overhead costs and boosting productivity. Some industry observers believe that AI could generate savings for financial institutions not just in the millions or billions, but in the trillions. With so many costly priorities for financial institutions now, including regulatory compliance, updating of legacy systems, and blockchain and digital transformation investment, the savings could be redirected towards addressing these needs, and growing the financial industry in other ways in the process.
This first wave of job losses will likely take place between now and towards the tail-end of the next decade, up to 2030.
AI will replace more sophisticated roles in future
As AI capabilities advance over the next fifteen years, experts believe that by 2030, it will begin to take the place of more complex jobs.
Right now, it can't effectively carry out roles that require multi-disciplinary oversight and execution. According to Lex Sokolin, Autonomous's fintech strategy global director, “We are on the verge of software gaining competency to perform service work. The key thing that AI cannot do yet is context switching, which implies that a chess robot cannot drive a car, and a chatbot cannot see." However, experts predict that by the latter half of the next decade, AI technology will advance to the point where such capabilities will be realized and subsequently integrated by financial institutions.
Some of the more sophisticated roles that will likely come under threat in future include:
The technology will also create jobs and further empower financial executives
C-suite take note: AI is not expected to be able to take over the jobs of finance professionals in which a complex myriad of roles must be carried out, often which depend on a high degree of critical thinking. Rather, it is likely that it will help such professionals perform better, with richer data-driven takeaways, more efficient processes, and automation of certain tasks. Those in management roles could be set to see greater gains in employment power.
It will also lead to job creation for professionals who are "skilled in AI technologies, both on a technical and applications level, but who also have soft skills," according to the World Economic Forum. Soft skills include critical thinking, listening, leadership, communication, and maintaining a positive attitude. These skills are difficult to code, and thus more valuable for humans to master.
The impact of AI has already begun
AI has already begun to change finance. Through technology in algorithms, big data, and high-frequency trading, AI has deeply impacted financial markets. That said, the wave of change predicted by experts in 2018 has yet to crest. Besides needing to clear regulatory hurdles and modernize legacy systems, banks require more time to fully evaluate how and where AI can be implemented before repetitive jobs will begin to see change. Now, experts believe it will be 2019 when AI makes a sizable footprint on the financials services labor force.
Technology has completely overhauled other industries in recent decades, including the media and music industry. Futurists now say it is the turn of finance. While nobody knows for certain how change will exactly play out, it is highly likely that AI will transform the industry in powerful ways that society can both predict and only brace for.
AI may replace millions of more menial finance jobs over the next decade.
After 2030 it is likely that AI will replace more complex finance roles as the technology accelerates.
AI will likely create jobs for professionals experienced in AI technologies and boost the efficiency of experienced finance professionals.
Financial Times (04/11/2018) AI in banking: the reality behind the hype
Fast Company (05/08/2018) AI could kill 2.5 million financial jobs - and save banks $1 trillion
The Telegraph (11/27/2017) These are the jobs most at risk of automation according to Oxford University: is yours one of them?
World Economic Forum (11/14/2018) 4 ways AI will impact the financial jobs market
The Balance (11/12/2018) List of soft skills
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