Artificial intelligence is on its way to becoming indispensable to the financial services industry, but what if that means C-level executives, become disposable?
Banks have been at the forefront of automation, with ATMs providing customers with 24/7 access to their money while reducing the number of human interactions. However, could a machine ever fill the bank’s number one position of chief executive officer, in the year 2020 or beyond?
After all, AI systems take automation to the next level. They are designed to absorb data and make judgments. In finance, AI makes sense across a number of functions. AI’s ability to pore over trillions of records and recognize patterns makes it exceptionally useful in fraud detection, picking up suspicious signs out of a mind-numbingly repetitive series of numbers. The machine’s ability to take care of repetitive tasks can also help with critical aspects of compliance reporting.
The next generation in AI technology, the cognitive system, take it up a notch. It can absorb all available information and create a causal model to analyze economic outcomes. In finance, identifying causal connections will give cognitive AI systems a firmer foundation for effective decision making that ultimately will improve the bank’s bottom line.
But the chief executive doesn’t just make the tough management calls, decisions that a future machine might be able to replicate. This individual is carefully selected for a demonstrated ability to serve as the public face for the institution, carefully balancing the interests of the board of directors, shareholders and employees.
Perhaps an AI system that consistently makes the right call more often than not is enough to satisfy the board and shareholders, but it’s hard to imagine employees or the public would ever be motivated by a machine. Regulators, of course, would never go for the idea!
The Iron Man suit
Clearly, the bank CEO won’t actually be replaced by AI. Instead, AI could enhance the human CEO’s decision making capabilities, playing to the strengths of machine and human.
Think of it as an Iron Man suit for executives. Like the fictional, AI-powered suit that gives engineer Tony Stark the capabilities of a true superhero in the Marvel movies, a suite of AI-powered cognitive tools can supercharge a CEO’s decision making powers. Here’s how:
The CEO can pass along issues to subordinates to investigate, or have them processed in an automated fashion, as desired. Far from replacing the CEO, such a system would better leverage the CEO’s time, extracting more value out of a limited work day and increasing the value of the position.
The CEO position isn’t endangered by AI. However, financial institutions must realize that the banks of the future will rely on augmented intelligence to drive productivity in an era of close governmental scrutiny.
What should the banks and CEOs be doing to prepare to co-exist with AI effectively as we look ahead to the year 2020 -- a year heralded by predictions about how technology will dazzle and advance society -- and beyond?
Patience is also needed, because it takes time to build and validate complex systems. The effort is worthwhile, because it’s not AI that will make the CEO obsolete, it’s the CEO without AI who will be obsolete.
Joseph Byrum is the Chief Data Scientist at Principal Financial Group. Connect with him on Twitter
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