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AI is an integral part of the fourth industrial revolution, which is expected to significantly change the world of finance. The report’s authors studied different scenarios of how AI and machine learning can be applied in practice in the future and what consequences can be. After conducting over 200 interviews with industry representatives, the researchers singled out several scenarios for the future.
It is noted that the AI will change the set of characteristics that a successful business in the field of finance should have. Earlier, the success largely depended on the volume of the portfolio of assets. On the other hand, in the future, companies with the largest database will be the winners. AI needs as much knowledge as possible to improve efficiency.
A more personalized approach will replace mass production, that is, development of standard packages of services and their distribution among customers. It will be possible, again, thanks to AI, the report says.
Bank accounts may disappear in their traditional form. Human decisions on how to spend their savings can be interchanged with an algorithm that will automatically distribute the client's funds.
For example, some of the money will be sent to repay loans and lower the interest rate, some will be put off as savings or invested in financial products. Finally, the customer's money can be spent on everyday needs.
All this will be based on automatic analysis of a large amount of data on all the financial capabilities and responsibilities of the client. Now, however, it is impossible to implement such a scenario in practice as financial institutions are prohibited from conducting operations without consent and knowledge of the client.
In turn, insurance companies will be able not only to react quickly to insurance incidents, but also to stay ahead by building several "lines of defense." For example, sensors will warn the client that he left the window open if the weather forecast promises rain.
If a threat is detected, an insurance company will also be able to offer the client an additional item in the insurance contract, for example, to insure the property against flooding or destruction before the onset of the hurricane season. In case damage was detected remotely with the help of sensors, the insurance company will automatically make insurance payments.
At the same time, the authors note that training and effective work of AI requires a more complete picture, that is, access to a large amount of data. And it's not just about the bases that are available to one financial institution.
In the future, AI will need a single database. Obviously, such a database should have multiple access points for a huge number of players in the market. So, it will probably be stored on a cloud server. And this makes it a desirable target for hackers: only one successful massive attack will be enough to wreak havoc in the entire global financial system.
"Dynamics of development of machine learning prompts us to combine the back-office into a single network," one of the report’s authors, Jesse McWaters, believes. "And the stronger the world is, the more vulnerable it is to the risks of cyberattacks."
source: weforum.org
It is noted that the AI will change the set of characteristics that a successful business in the field of finance should have. Earlier, the success largely depended on the volume of the portfolio of assets. On the other hand, in the future, companies with the largest database will be the winners. AI needs as much knowledge as possible to improve efficiency.
A more personalized approach will replace mass production, that is, development of standard packages of services and their distribution among customers. It will be possible, again, thanks to AI, the report says.
Bank accounts may disappear in their traditional form. Human decisions on how to spend their savings can be interchanged with an algorithm that will automatically distribute the client's funds.
For example, some of the money will be sent to repay loans and lower the interest rate, some will be put off as savings or invested in financial products. Finally, the customer's money can be spent on everyday needs.
All this will be based on automatic analysis of a large amount of data on all the financial capabilities and responsibilities of the client. Now, however, it is impossible to implement such a scenario in practice as financial institutions are prohibited from conducting operations without consent and knowledge of the client.
In turn, insurance companies will be able not only to react quickly to insurance incidents, but also to stay ahead by building several "lines of defense." For example, sensors will warn the client that he left the window open if the weather forecast promises rain.
If a threat is detected, an insurance company will also be able to offer the client an additional item in the insurance contract, for example, to insure the property against flooding or destruction before the onset of the hurricane season. In case damage was detected remotely with the help of sensors, the insurance company will automatically make insurance payments.
At the same time, the authors note that training and effective work of AI requires a more complete picture, that is, access to a large amount of data. And it's not just about the bases that are available to one financial institution.
In the future, AI will need a single database. Obviously, such a database should have multiple access points for a huge number of players in the market. So, it will probably be stored on a cloud server. And this makes it a desirable target for hackers: only one successful massive attack will be enough to wreak havoc in the entire global financial system.
"Dynamics of development of machine learning prompts us to combine the back-office into a single network," one of the report’s authors, Jesse McWaters, believes. "And the stronger the world is, the more vulnerable it is to the risks of cyberattacks."
source: weforum.org
