Artificial intelligence will change the way that the financial services industry and its markets work. Digital Jersey are have already started to prepare the ground here. The AI retreat it helped to host last September was a first step in helping the island reap the benefits of an AI revolution that is inevitable.
What opportunities will these be? I think it’s time for creative thinking. When bankers talk about AI, they tend to think in terms of robo-advisers and chatbots, focusing on the use of AI by their institutions to either cut costs or deliver new services. Most banking investments in AI are currently investments in machine learning, by and large targeting fraud. But there are other more radical ways to use AI. As I asked at the Digital Jersey annual review in an echo of Fred Schwed’s 1940s financial services classic… where are the customers’ bots?
Customers will have access to AI just as powerful as the banks’. Retail customers’ smartphones and fund managers’ tablets will connect them, permanently, to an intelligence far greater than their own. This cannot happen soon enough for me. I’m not smart enough to choose the right credit card, pension or car loan, so clearly, I’m going to want my bot to take care of things for me.
Now, while I’m not sure I really want to be in the loop for a discussion about pension plans or insurance, I do want some sort of confidence that there’s a regulator in the loop, and that, if push comes to shove, my bot will be held to account to explain why it made the decisions it did. Regulated bots are the future and, frankly, Jersey can lead the way.
How the banks’ bots will interact with the customers’ authorised robo-representatives is at the same time fascinating and frightening – not for customers, but for the banks unable to deliver the cost-effective products and services that those representatives will demand. This will be a world where the bank’s AI sells to my AI under the watchful eye of the regulator’s AI. This will be financial services sector that is more efficient (cheaper to operated), more productive (more desirable for businesses) and more effective (a beacon to policymakers and regulators). It is an entirely reasonable vision for Jersey.
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