Artificial Intelligence zooms in on financial institutions has been saved
Artificial Intelligence zooms in on financial institutions
The latest report from World Economic Forum and Deloitte explores how AI is challenging traditional operating models and redesigning the financial services industry.
Luxembourg, 2 October 2018: Artificial intelligence (AI) is rapidly changing the way financial services institutions attract and retain their customers, and it paves the way for new models of collaboration among competitors, according to a new report released by the World Economic Forum with support from Deloitte.
The report is entitled The New Physics of Financial Services and it explores how AI will transform the realities of financial institutions by radically changing front- and back-office operations, creating major shifts in the structure and regulation of financial markets, and raising critical challenges for companies and society to meet.
“Artificial Intelligence drives operational efficiency and there is no doubt that it will transform financial institutions both in terms of their strategic priorities and their operating models. By capitalizing on the vast opportunities brought by AI, financial services firms can leverage on their strengths and position themselves ahead of the curve,” explains Benjamin Collette, Partner and Financial Services Industry Leader at Deloitte Luxembourg.
The report identifies nine key findings that demonstrate how AI is changing the physics of financial services, weakening the bonds that have historically held together financial institutions, while creating new centers of gravity where new and old capabilities are being combined in unexpected ways. Among these insights, four core findings specifically explore how AI is radically transforming the front- and back-office operations of financial institutions.
Firstly, the report suggests that AI will allow financial institutions to turn their centers of excellence into services and move towards a back-office as-a-service model. Furthermore, AI is giving rise to a new set of competitive factors on which financial institutions can distinguish themselves to customers and compete on value offered, as opposed to a race towards the lowest price. As a third point, some findings indicate a future in which a “self-driving” vision of finance could transform the delivery of financial advice, centering customer experiences around AI and interactions with a single platform. Finally, the report illustrates that AI presents a strong mechanism for financial institutions to collaborate on issues such as fraud prevention and anti-money laundering controls—thereby offering collaborative solutions for shared problems across financial services firms.
New skills needed
Artificial Intelligence requires financial institutions to secure a new set of skills and competences internally. The findings suggest that financial institutions need to address talent transformation with the same priority and determination as tech transformation.
“Financial institutions have already started to look for professionals with different skillsets and experiences than they used to hire in the past. Without the relevant expertise in AI and other technology, financial companies will struggle to capitalize on AI. The talent gap tends to increase over time within firms that lag behind on the tech journey,” concludes Benjamin Collette.
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