Artificial Intelligence (AI) inhabits our daily lives. Some might even be inclined to say it pervades our lives and they wouldn’t be wrong. Our smartphones, devices we cannot do without nowadays, employ all kinds of AI-empowered apps and features. When we commute, we use AI; in essence, it has become a potent tool and one that is also seeing widespread deployment in the financial sector. It’s capacity for good can only truly be realised if companies wield its power from a position of diligence, tact and care. The benefits of using AI in the financial sector are multifaceted. With the aid of AI, productivity can be enhanced through automation, which can, in turn, reduce human error brought about by way of emotional and psychological factors. Anomalies and trends can be spotted earlier, addressed, corrected, or improved.
Great power- great responsibility
The old spider-man cliché is true – with great power comes great responsibility – and the same can be said about AI. It’s shaping our lives in so many ways. We work differently now because of AI. We conduct our financial affairs in radically different ways. We make money from home. We barely go into banks. Financial sectors that in the past were only for a small segment of the population have seen incredible growth by way of Artificial Intelligence. AI shaping the Forex market is a prime example, as in the past, this market had massive gate keepers. Only the wealthy could access shares, funds, derivatives and commodities. Now practically anyone can.
However, if firms and companies don’t exercise great care in the deployment of AI applications in finance, there can be repercussions such as incorrect credit scoring and bias in input data. Those who use AI analytics to improve their systems need to have a firm grasp of the feedback data they receive to perform upgrades. This matter gains even more urgency if the analytical information is from a third party. There’s also been a fair amount of debate regarding the use of big data when it comes to customer profiling, as it stands to infringe on people’s rights to privacy. Back in 2016 a British insurer reneged on its intentions to use social media to determine premiums for first-time car owners, and only because the company it outsourced the task to raised valid questions on privacy.
Rights & access to information
With access to so much information nowadays, there can be not just be legal of financial ramifications, but also ones of a reputational nature. What has emerged is a truly convoluted technological narrative in which people have the rights to have their processing of their data restricted, thereby exercising their rights to privacy without incurring negative impact. A common dilemma is the ease by which people can access and exercise these rights. Just closing one’s Facebook account in its entirety is a logistical nightmare and at this point it remains unclear as to what limiting access to your data might have on something like a credit score which in turn affects a number of financial facets of life.
Maybe it’s just a warning label
Cigarettes, alcohol, medicine, household cleaners and appliances – they all come with warning labels. Perhaps the message is clear – perhaps AI needs to carry a warning label? Use responsibly? Use with Caution? Can cause a loan not to be approved? The fact of the matter is that AI is here to stay and evolve and its story is not finished, like many other modes of technology that we’ve adopted and with great success. We don’t know what history will tell us about the effects of television in one hundred years’ time. The story of human beings and the adoption of technology for longest time has been one where the entirety of the situation is far from being revealed, but then it’s also been how we’ve evolved as a species – by way of trial and error. Based on those assumptions, perhaps our dance with AI could simply be looked at as ‘business as usual.’