Thursday, March 23, 2017

AI in Financial Services

When looking at a person, the human eye is able to recognize a face with 97.53% accuracy.  This sounds relatively high until you hear that facial recognition programs of Ping An Technologies are more than 99% percent accurate.  The artificial intelligence of Ping An has become very sophisticated and leads the world in this sector of artificial intelligence at the moment.  The current objective is to decrease detection time of micro expressions to 30 milliseconds through its series of algorithms.
Ping An Technologies has developed its artificial intelligence for the purpose of use in the financial services industry.  How would the financial services industry utilize a facial recognition program?  The answer is in its security.  Facial recognition is something that most people are familiar with.  It gets used in airports and in forensics, as is popular on many shows.  The use of facial recognition to prevent fraud in banking situations is one that could have some practical applications.  With a system more reliable than the naked human eye, the use of artificial intelligence in finance creates high value in this field.  
In addition, using facial recognition and artificial intelligence in finance and banking creates cohesion with the data that has already been collected, and it utilizes data from different locations for instances like detecting fraud, etc.  
Beyond facial recognition, AI can be used in finance for risk control, credit reporting, and market investment analysis.   If companies like Ping An are able to calculate risk using algorithms and artificial intelligence, it could be possible to create more reliable financial data.   In addition, the advancement of sophisticated artificial intelligence is aiding in the development of other things, like online banking, which was not able to be done at this same level before. With data being processed so quickly, the financial service industry could become much more reliable than before.  Would this mean increased investing?  What could this mean for this industry as far as jobs?  As for now, the technology has still not been released for general use, meaning it isn't in place in the financial services industry just yet, and as with all artificial intelligence, it still needs continual data to be able to "learn," and my opinion is that the financial services industry will probably not suffer from any adverse effects of the integration of artificial intelligence into the field.

Outside the field of finance, the increased accuracy of artificial intelligence and facial recognition could be able to aid in things like medicine or personalized insurance premiums.  In the case of medicine, the development of artificial intelligence could lead to better diagnoses or possibly quicker response time when technology could be used to spit out a quick analysis of identity, medical history or even symptoms.  It seems that, although not ready for release yet, the development of AI could have major advances in fields stretching across many concentrations, from finance and security to medicine.


Bobby Austin said...

I could not agree more with the notion that artificial intelligence programs will become increasingly popular in the financial services industry. However, the potential problems coming from AI can be devastating, especially in the financial services world. Dan Schutzner, who is a Senior Technology Consultant for BITS, explains how "as businesses begin to rely more on data-driven AI applications, these new applications lead to new business issues and security/privacy concerns" (Schnutzer.)

Perhaps the most glaring concern could be when the AI system fails; what happens when the applications are hacked and/or have accessibility issues? The consequences will be devastating to the user. In my opinion, there is a huge potential for hackers to overtake AI systems without the legal user knowing. "If the user can't identify an application as genuine and valid with a high level of assurance, the user could be handing personal information and goals over to the wrong applications or act on malicious or bad advice." (Schnutzer.)

Even though there's the possibility for security issues with AI systems right now, I think they will go away in the future as they are developed more. We are still learning/developing AI systems and security should be at the forefront of that innovation due to the nature of its sensitive data. Much like the use of AI in the legal system, the application will help augment the work required for the financial services industry. The demand for AI applications has surged in recent years according to Dan Schutzner, specifically to be used as "automated financial advisors and planners that assist users in making financial decisions. These include monitoring events and stock and bond price trends against the user's financial goals and personal portfolio and making recommendations regarding stocks and bonds to buy or sell." (Schnutzer.)

Bryce Carrasco said...

The financial services industry is already being revolutionized by artificial intelligence and the trend is moving toward the adoption of AI as the standard in the financial and banking sector. Trading floors and the stock market have already adopted AI to control the functions of the stock market and this has been happening for years. AI does pose potential for disaster and malfunction that could be catastrophic for the market but at the end of the day the fundamental question that needs to be asked is whether the risk with AI is greater than the risk of relying on people to control the financial sector. My opinion is that the risk is lower with AI for multiple reasons. The most obvious reason, in my opinion, is the fact that humans are susceptible to corruption and are act in favor of self interest in many situations as highlighted by history. People can and will act immorally and the odds of someone on wall street committing fraud is much higher than the probability of algorithms and AI breaking down. Automation and computers are not susceptible to fraud which has been the biggest reason for the collapse of economies throughout the history of capital markets. If financial services and rating agencies in the stock market had been controlled and operated using AI would the subprime mortgage crisis of 2008 been able to occur. The reason for the collapse of the American economy was due to greed and self interest of wall street bankers and AI could be a way to solve this recurring issue. Also, AI is efficient and reduces the bottom line for many companies because they will not need to use their resources for many services any longer. In conclusion, the outcome will depend on the development and integration of this technology and reducing all possible defects from the technology so that the markets can be trusted and relied upon. If this happens then the financial sector will see great results and the market will be much more efficient and transparent.