The age of AI

BotIf you’re going to produce a drama with an Artificial Intelligence unit as a principal character, here’s a tip: be sure the AI unit turns evil and dangerous. Sweet, empathetic AIs like David in A.I. Artificial Intelligence and Andrew in Bicentennial Man tend to land with a thud. We humans like our AIs scary, thank you very much. We demand the likes of the androids in Westworld, Ava in Ex Machina, the terminator in The Terminator, and Hal in 2001: A Space Odyssey.

The AI-amok trope conflates artificial intelligence with artificial self-awareness. It makes for a great thriller, but it’s like conflating singing soprano with using sound to break apart planets. AI—real AI, not movie AI—refers to machines that learn and make decisions. Examples include search engines that learn your content preferences, digital cameras that know how to blur backgrounds, apps that can beat in you a game of chess, and smartphones that can tell you how to find the nearest Starbucks. Yet none of these applications is self-aware, and none has any means of locomotion. You don’t have to fear that, someday, fed up with your incessant questions, erica will decide to go after you with a kitchen knife.

erica is but one example of just how firmly embedded in financial services AI already is. The AI app is remarkably competent when it comes to delivering efficient service with, ironically enough, a personal feel. Sameer Maskey noted in a Forbes article that erica* is …

… accessible 24/7, and it can perform day-to-day transactions. This allows clients to have access to services at any time without costing more money hiring customer service personnel.

On a like note, members of British cooperative financial institution Nationwide Building Society will soon be interacting with Arti, an AI who works with a bit of help from IBM’s Watson. In an article dated February 15, Finextra reported:

Nationwide Building Society is to launch a virtual assistant as a first line of support for first-time home buyers, responding to preliminary inquiries. The new bot, dubbed Arti, will apply learnings from IBM’s Watson Assistant to respond to online queries from home buyers. As the conversation progresses, Arti will escalate questions to a human agent as needed …

… “Enterprise-grade AI virtual assistants are more than just chatbots,” says Beth Smith, general manager, IBM Watson. “A true enterprise assistant understands when to search from a knowledge base, when to ask for clarity and when to direct users to a human – helping to resolve more requests while reducing misunderstandings and alleviating frustration for both employees and customers.”

Watson is able to learn on the job, refining its answers to respond to more complex queries.

Useful as erica and Arti are, AI does a lot more in financial services than answer basic questions about accounts. AI is fast becoming indispensable to investment services. An article in Customer Think notes:

… the data regarding financial transaction can help the bank understand the expenditure pattern of the customer. The bank can come up with a customized investment plan accordingly and also assist the customers for budgeting. What’s more, banks can send the notification about the advice for keeping a check on the expenses and investments based on the data … 

… Globally, hedge funds prefer AI-based models. It is because AI-related tools can fetch real-time data from various financial markets across the world. Also, AI models can analyze the mood or sentiments of different financial markets and come up with an accurate prediction. These inputs and sophisticated algorithms make AI models capable of assisting the users to take decisions quickly.

Hedge fund trading and management can be done on the move with the help of AI-based mobile app solutions for the banking sector. These solutions help the banks to mitigate the risks associated with overexposure and user intervention in the market.

AI is also proving its mettle when it comes to fraud detection and prevention and cybersecurity. Take, for instance, Citi’s Feedzai, which Emerj describes as …

… a leading global data science enterprise that works in real-time to identify and eradicate fraud in all avenues of commerce including online and in-person banking. Through its continuous and rapid evaluation of large amounts of data, Feedzai can conduct large-scale analyses. Fraudulent or questionable activity is identified and the customer is rapidly alerted. 

The service also assists payment providers and retailers in monitoring and protecting financial activity in connection with their companies. To prevent fraud and monitor potential threats to customers in commerce Feedzai utilizes “machine-based learning” to evaluate “big data” and potentially fraudulent activities.

I enjoy the AI-as-villain movie cliché as much as the next person. Even more so, knowing that moviemakers use AI to help in production. But it’s nothing to fear, despite scary sound bites from people like Elon Musk, who, according to people like Bill Gates, ought to know better. Someone may well someday figure out how to design a self-aware AI. Rest assured that it’s a long way off. 

*Here’s an example of AI: Just now, Microsoft Word stopped capitalizing the when I typed erica. Apparently it “knows” that after I undo the automatic correction a certain number of times, I must be using the lower-case on purpose.

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