Robotics and AI Will Quickly Transform Financial Technology
Advances in robotics and artificial intelligence are poised to disrupt several areas of financial services and capital markets, predicts PwC in its recent report, “Financial Services Technology 2020 and Beyond: Embracing Disruption.”
“We are already seeing alliances between leading incumbent financial services and technology companies, using robotics and AI to address key pressure points, reduce costs and mitigate risks,” the report states.
Cognition and interaction capabilities, in particular, continue rapid advancement in robotics, opening up their potential to eventually perform a greater number of tasks, and more complex ones. Where ATMs today represent a very simple, purpose-built robot, PwC predicts that it won’t be long before robotic process automation will make serious inroads in financial services digital operations.
As labor costs in traditional offshoring destinations rise, PwC also predicts that robotics and AI capabilities could also become legitimate substitutes for many human workers. That development could “spur re-shoring, as more tasks can now be performed at a competitive cost on-shore. Even functions that seem dependent on human input, such as product design, fraud prevention and underwriting, will be affected.”
Where AI already plays a prominent role in capital markets and high-speed trading, the technology could soon “become a core component of the fund design process, particularly around trading authorizations and hand-offs with human investors,” the report continues.
And by 2020, AI will likely automate many underwriting functions, “especially in mature markets where data is readily available. Even in situations where AI does not completely replace an underwriter, greater automation would allow humans to concentrate on assessing and pricing risks in the less data-rich emerging markets.”
Clearly, PwC sees a banking and financial future well beyond encountering a robot teller at your local bank branch.
PwC’s FinTech Priorities for 2020
The movement to adopt more robotics in banking and financial services is only one of 10 key themes PwC says IT executives in financial services will need to address as they begin strategic planning for 2020 and beyond.
In preparing for such disruption, the report also recommends six priorities for financial services IT:
- Update your IT operating model to get ready for the new normal.
- Slash costs by simplifying legacy systems, taking Software as a Service beyond the cloud and adopting robotics and AI.
- Build the technology capabilities to get more intelligent about your customers’ needs.
- Prepare your architecture to connect to anything, anywhere.
- Pay very close attention to cybersecurity.
- Make sure you have access to the talent and skills necessary to execute and win.
