The term artificial intelligence strikes the fear of God into many people who have perhaps watched movies in years gone by where the machines take over the planet. There is obviously a concern that artificial intelligence could by definition become too powerful because if a machine is able to learn on a constant basis there really are no limits. A number of companies have sprung up over the last couple of years focusing upon artificial intelligence and the financial sector. So, what do these companies have to offer and what does the future hold?
Cost savings and revenue opportunities
Goldman Sachs believes that artificial intelligence will create up to $43 billion in annual cost savings and new revenue opportunities for the financial sector alone by 2025. This includes everything from stockpicking to trading, from financial instruments to personal bank accounts. There will be an impact upon the labour market but it is difficult to quantify at this moment in time simply because some employees will switch from advisory roles to more computer system orientated roles.
There are already companies out there who have effectively taken over the financial affairs of individuals offering them advice on savings accounts, maximising their cash flow and ultimately improving their personal finances. Much of this additional artificial intelligence capacity is possible because of major developments in computer storage facilities and artificial intelligence programs. The ability for a computer to constantly learn and then ultimately teach another computer to learn is mind-boggling to say the least.
Spotting the next hot stock
As resistance to artificial intelligence continues to fade we will see more and more companies floating on stock markets around the world. This phenomenon has already begun although in reality we are only at the start of what could be a major change in the way we live and the way businesses operate. There are obvious dangers with artificial intelligence but many of these dangers have been overdone by the media often building the public up into a frenzy and reluctance to even consider this new phenomenon.
While the likes of Google have been headline news regarding their artificial intelligence investments there are very few technology-based companies who have not looked down this avenue. We have the likes of Tesla introducing self-driving vehicles, we have the gimmicks which are personal robots but the reality is that we are just scratching the surface. The idea that computer programs could create an “investment brain” which could effectively take over investment decisions from traditional managers seems the stuff of sci-fi movies. However, believe you me we will see this at some point.
Regulations would need to be tight
There are already regulations to cover the subject of artificial intelligence and how this can be used in everyday life. We will likely see a significant tightening of regulations in the years to come as more and more companies open up about their artificial intelligence operations. The truth is that we live in a world were artificial intelligence is all around us although much of it is fairly subtle. As night follows day, future AI systems will be far more visible and control vast areas of business and everyday life. Regulators will need to remain one step ahead of this industry otherwise there could be major repercussions.