First published in The Drum
As early adopters of AI offer their customers bespoke products that deliver intelligent and engaging experiences, those who initially sat on the fringes observing the revolution are now keen to catch up. And quickly.
Following in the wake of such trailblazers as retail, health, and the automotive sector, finance is emerging as one of the fastest-growing in the quest for smarter, more personalised product offerings.
The Value of data
A recent report by Kinsey Global shows the financial sector with a projected 30% growth of spending on AI over the next 3 years. That’s even more than the aforementioned health and retail sectors. But why now? And what is leading this change?
Data has become the new oil of the 21st Century. It’s rich in information and has multiple uses that can fuel industries and empower individuals. It is, however, not something that will be exhausted anytime soon. Quite the opposite actually.
90% of the world's data has been created in the last 2 years with most of this data unstructured and traditionally difficult to utilise.
Digital Transformation projects will gain steam
Digital transformation has become an important business priority for some time now. Organizations believe that by 2020, nearly half their revenue will be impacted by digital in some way.
In 2019, organizations will put potent building blocks in place to accelerate their ability to meet AI’s promises of digital transformation. Expect more companies to use AI to build their own products that help with their own digital transformations and business requirements. Companies will begin to better understand the impact of AI and smart business operations will ensure as a result.
Optimising unstructured data
Risk management is one of many areas that is currently enabling this type of data by analysing 3rd party news, financial reports, white papers and even social media. By connecting this analysis with in-house risk analysis data it allows robo brokers to obtain real-time insights and early warnings much quicker than humans could complete this task.
With less than 1% of the world’s data ever being analysed, it’s easy to understand the potential of AI with such a rich source of information at its disposal.
Existing pain points
As humans in 2019, we have successfully augmented ourselves with digital technology. Never before has any technology had such a profound effect on the way we live, work and communicate, but still we strive for more. In fact, we expect it.
Integrated technology
As humans in 2019, we have successfully augmented ourselves with digital technology. Never before has any technology had such a profound effect on the way we live, work and communicate, but still we strive for more. In fact, we expect it.
AI is at the forefront of this expectation. From Spotify finding our next favourite band, Amazon suggesting products that we may like to purchase as well or FitBit telling us to get up and do more, we are already accepting AI as a trusted advisor working on our behalf. Not only does AI offer innovative user experiences, but it also helps us collect and use data required for even further enhancements.
The Finance sector is slowly building on this acceptance with products that can help us manage our budgets better, invest more wisely and alert us every time we make a card purchase. The horizon has already given us glimpses of health insurance obtained by selfies, mortgages for life that adapt to your needs and credit checking that looks at current financial behaviour rather than just historical salary, savings and money borrowed. As customers we demand better products if the established companies don’t deliver, then disrupters (such as Monzo) won’t be long in satisfying that customer need.
Summary
Finance is investing a great deal into AI adoption and looks likely to close the gap on other leading sectors within the next 3 years. The wealth of products, data, and customer numbers lends itself to be a rich landscape for better user experiences and service offering, though getting there will not be easy. The finance sector already comes loaded with great responsibility, impartiality, and governance, so introducing a technology that requires more data, more access and less user friction could be a difficult nut to crack.
But as they say ‘Fortune favours the bold’.