David L. Shrier, CEO Esme Learning and Professor of Practice, Imperial College Business School, shares his thoughts on surviving and thriving in the AI future
Artificial intelligence has been ever more rapidly making its way into financial services workplaces, with the pace of adoption being driven simultaneously by improving capabilities of AI systems as well as ever-greater pressure on large financial institutions to improve their bottom lines.
The deluge is coming
Leading up to and through the Covid crisis, banks such as HSBC and Commerzbank were laying off tens of thousands of employees. While large financial institutions in places like the United Kingdom were prohibited from layoffs for a period of time, as we emerge from the worst of the pandemic, these workforce realignments likely will escalate.
Digital transformation initiatives such as robotic process automation (RPA) are remaking the highly inefficient middle and back office to a more digital, AI-enabled operation. Chatbots are replacing customer service professionals, and robo advisors are replacing wealth managers. For example, JP Morgan’s nearly US$1 billion acquisition of Nutmeg in June will bring extremely deep pockets and global distribution behind a strong user experience and market momentum. AI-enabled retail banking has created some of the most valuable companies in fintech: Revolut and Klarna.
AI systems are fueling the fintech revolution. The global fintech market is expected to reach a market value of $324 billion by 2026, representing a five-year CAGR of 23.4%. This growth means that there is a war for talent among companies trying to find professionals who can manage emerging technologies. Large corporations must compete with nimble start ups that are able to offer equity incentives. Venture capital is fueling the fire across the board, and within artificial intelligence in particular. In 2020, AI startups raised more than $1billion per week in venture funding.
Some governments have recognised the strategic importance of artificial intelligence and fintech in keeping their economies competitive. The government of Singapore, for example, has established multiple reskilling and related programs totalling more than S$ 125 million, as they seek to take their entire 200,000 person financial services sector and pivot it into a fintech-ready workforce.
The workforce of the future
The worker of the future needs to take their destiny into their own hands. With artificial intelligence replacing a number of labour-intensive and analytic functions, the future worker will be a strategist and creator.
Tasks that artificial intelligence can automate began with repetitive, discrete, quantifiable activities. With improvements and deep learning systems, we are beginning to see more fuzzy or vague activities owned and take shape with the minds of AI. Investment banking analyst pools are getting reduced in size in favor of artificial intelligence and other digitally-enabled systems. Financial news has long automated earnings reports, but with new and more sophisticated AI systems like GPT3, even an article such as this one could be written by a machine.
At the same time, workers will want to develop new kinds of cognitive flexibility to adapt to this digital future. Instead of going to a four-year degree program – perhaps with a two-year or one-year masters program afterwards – the workforce of the future will need to be continuously learning. New cognitive skills will be required to understand new information and assimilate it into workflows rapidly.
Augmenting your career
The fintech professional of tomorrow will be augmented by artificial intelligence, not replaced by it. The future-forward worker is going to be bionic, integrated closely with their artificial intelligence companions to generate new insights and new capabilities that neither machines nor people would be capable of by themselves.
What does this new augmented career look like? First and foremost, a lot of the mundane tasks today that you have to carry in your head or on a list will be automatically managed by your artificial intelligence assistant. You will be able to have meetings with your colleagues where the AI will automatically minute the meeting, extract out tasks that are identified, and put them into a work plan that gets assigned to the appropriate people. You will then get reminders to help you manage your workload afterwards.
That’s only the beginning. As AI systems begin to understand not only individuals, but the interrelationships among people and teams, and across companies, collective intelligence can be harnessed. MIT researcher Tom Malone has spoken of ‘super minds’. Geoff Mulgan of UCL speaks of ‘intelligence at large scale’. Recently published research at MIT showed a marked improvement in actually predicting stock market movements.
These new kinds of hybrid intelligence systems will enable fintechs to discover new kinds of financial instruments. Companies will be able to allocate resources more efficiently, dynamically responding to changes in the marketplace. AI-enabled collective intelligence can serve to identify new opportunities and navigate around new competitive threats.
Getting started on tomorrow
The starting point for someone working in financial services today is to raise awareness around new technologies such as artificial intelligence, and to equip professionals with the tools to be able to use these technologies in the workplace and to advance their careers. Institutions such as MIT, Oxford, Cambridge and Imperial College are launching an array of new classes to prepare finance professionals for the AI-enabled future.
Financial services is undergoing a once-in-a-lifetime transformation through the use of disruptive technologies like blockchain and artificial intelligence (and soon, quantum computing). While this will create risks and challenges in the short term, it also creates significant opportunities in the medium and long term for the prepared mind.