The financial services sector worldwide is embracing artificial intelligence (AI) at a pace that is unprecedented. From vetting of bank loan agreements to reconciliations, risk management, and consolidation, AI is slowly substituting human interventions. Although many are talking of the downsides of AI replacing humans in carrying out tasks, rarely is anyone concerned with the other disruption that it may trigger –AI systems disobeying pre- programmed codes.
In last week of July this year, reports of Facebook shutting down one of its artificial systems made to the headlines in media across the world. The reason cited was the AI system shifted to a new language, without any such instruction from its handlers. This can be viewed as an act of technology-triggered disruption, a learning lesson for many.
Financial services sector that includes banks, insurers, and stock exchanges is treading a path that will lead to a considerable integration of AI systems with the traditional infrastructure. And let us reassure you that not all AI is bad. Just remember standing in long queues to withdraw a paltry sum from your bank account and juxtapose it with the comfort of visiting an ATM. Online trading of scrips revolutionized secondary market in similar fashion.
It can thus be said that while AI will replace humans from jobs that do not require creativity, these systems will, alongside, enrich customer experience, make companies more profitable owing to cost cuttings backed by technological disruptions and shift the focus of laid off and prospective workforce toward innovation and invention of new products and services.
But what would happen if one of the AI systems in a banking company defies the commands of its handler and starts functioning in a manner other than what it was programmed for?
Banks and other constituents of financial services sector are the backbones of any economy. Not a single business or market can survive if technology-triggered disturbances are caused in banks, stock markets or other key institutions. Imagine a scene where a bank loses its data on bank deposits and advances owing to a malfunction in its AI system and the ensuing chaos.
Digital technology works on codes by software experts. Any breakdown in this arrangement of codes can lead to catastrophic events, and hence industries embracing artificial intelligence to cut costs on the human resource are to be vigilant to factor in these risks while designing and deploying their systems. Having a credit risk management department offers a hint to companies to have a technology risk management department in future for quick fixes to an act of disobedience by the non-human workforce.
It is undeniable that artificial intelligence will replace much of human workforce in financial services sector, fueled in part by millennials who are set to form the major chunk of clients of banks, insurers, and stock markets, thus a demand for fast, digitized and automated services that only AI systems have the competency to deliver. In such a state, deliberating possibilities of an AI system defying preset commands and causing ruckus becomes an obligation.
Also read: Quietly Seeping Into Financial Infrastructure – The Blockchain
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