The growth of Artificial Intelligence brings with it myriad moral and philosophical queries, new opportunities, new challenges and a public both skeptical and excited by its potential. The financial sector, in particular, has begun an aggressive exploration of the technology.
A new study shows just how committed the banking, financial services and insurance (BFSI) industry is to investing in Artificial Intelligence (AI) and the fiscal impact it could have on the global economy. According to information in the report, the BFSI market compound annual growth rate is projected to be 28.7% in sales over a five year period. The global market size is anticipated to be $130 million in 2026 and $225 million in 2019.
“AI … of banks, financial services and insurance … is expected to increase significantly over the next few years," the report reads. "A positive increase in AI-based applications at BFSI, such as customer support, fraud detection, and employee efficiency improvements has spurred AI in the BFSI market.”
The report looked at a number of companies including:
- Microsoft
- IBM
- Intel
- AWS
- SAP
- Oracle
- Salesforce
- IPsoft
- Palantir
- Lexalytics
- Inbenta technologies
- Next IT
- Interaction
The solution sector held more than 85% of sales last year, with customer service accounting for more than 45% of sales so far in 2019. Banks account for a hair more than half the artificial intelligence activity in the market, the report reads. “Artificial Intelligence (AI) is rapidly evolving as a state-of-the-art technology that enables companies around the world to personalize their personal experiences. AI, the primary application, includes smarter chat bots for customer service, service customization for individuals, and even AI robot placement for self-service,” the report reads.
AI and the Emerging Reality of ‘Hyper-relevance’
A report from The Financial Brand shows one-third of customers cut a “business relationship” because they felt personalization was lacking. “Hyper-relevance is the new baseline for success for addressing banking customer demands for tailored experiences,” the report reads.
To combat impersonal automated communications, companies are turning to AI to generate more personalized responses without relying on traditional human resources to deliver them. “Predictive analytics, artificial intelligence (AI) and machine learning have combined to provide a hyper-relevant capability that is delivered in real-time using digital devices,” the report reads. “Financial organizations can use internal and external data to achieve new levels of insight, with a greater contextuality and timeliness than ever possible just a few short years ago.”
Risks and Reality of AI Show Immediate Future is Not All Sunshine and Roses
In a recent Securities and Exchange Commission (SEC) filing, Microsoft warned investors that getting into the AI game could have negative impacts, at least in the short-term, should the endeavor go sideways for one reason or another. According to the filing, the company acknowledged issues associated with AI could harm the company’s reputation and expose it to potential liability.
“As with many disruptive innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. AI algorithms may be flawed. Datasets may be insufficient or contain biased information,” the filing reads. “Inappropriate or controversial data practices by Microsoft or others could impair the acceptance of AI solutions. These deficiencies could undermine the decisions, predictions, or analysis AI applications produce, subjecting us to competitive harm, legal liability, and brand or reputational harm.”
Further, it points out “some AI scenarios present ethical issues. If we enable or offer AI solutions that are controversial because of their impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm.”
The SEC filing is dated January 30.
