In part one of this series, we covered the impact Artificial Intelligence (AI) has on our everyday lives and how AI and Robotic Process Automation (RPA) are transforming Accounts Receivable. In this installment, we touch on how AI is transforming other areas such as compliance and financial services.
While AI is hardly a new concept in financial services, the latest technological advancements and the pressure to remain competitive with peers have resulted in a surge in demand for these solutions among a number of firms.
Don Duet, co-head of technology at Goldman Sachs, stated in a recent Business Insider article that the company is investing actively in AI and machine learning to help improve existing processes and provide an enhanced customer experience. “We see that the ability to take data and help turn it into information as an asset as a core part of our strategy,” said Duet.
There has also been a surge in the weight and importance of compliance in financial services in the post recession world. While some companies have responded by adding additional manpower to ensure their organizations dot every i and cross every t , some have taken the AI route instead. Maintaining compliance involves managing large volumes of information that must be compiled, referenced and updated on a regular basis. Many of these tasks are tedious and repetitive, making them ideal candidates to be handled by an AI solution.
Longboard Asset Management, a Phoenix-based asset management firm specializing in alternative investments, has chosen to adopt machine learning in overseeing the data in its managed-future investment strategy. Portfolio manager, Eric Crittenden indicated in a recent MarketsMedia article, “There are things that algorithms and programs are really good at doing, much better than humans. Research efforts in compliance are usually behind the curve because compliance is not a profit center. But there is a lot value that can be added by mining the data and setting up intelligent queries and algorithms to go out and look for red flags. There will be some unintended consequences from that, some iterations and some frustrations, but over time you’ll see compliance become more effective and more efficient from the use of synthetic intelligence.”
Organizations are becoming more open to the utilization of AI for many of their repetitive tasks, but companies like Aidyia, a Hong Kong-based asset manager, have begun using Artificial General Intelligence (AGI) and are taking machine learning a step further. According to their website:
AGI is a branch of artificial intelligence aimed at machine learning mimicking the human brain’s breadth, depth and generality of understanding. Applied to financial markets, the result is financial prediction and trading systems with a human like ability to not only recognize mathematical patterns in market data, but to understand what these patterns mean in a broader context. Without the human limitations of memory, emotion, bias and mood, AGI systems can apply their financial insights in an objective way.
Algorithmic trading, while reacting quickly to market changes, still requires some form of human input. Aidyia’s latest development, however, can analyze large amounts of information and track patterns in the data, using this information to make trades without any human input.
AI offers notable benefits, allowing businesses to be significantly more efficient in what may soon be virtually all of their financial dealings. If recent developments have only scratched the surface, we should expect to see exponential growth in AI’s use, breadth and ability.