November 20, 2017
For this generation, automation is already part of their lives, with seven in ten millennials using mobile apps in preference to going into bank branches, according to research by Visa. But as customers expect more automation, does that mean those jobs in the financial services are under threat — or is it actually an opportunity for nimble firms to try out new ideas?
‘Financial planning has stayed the same for many years, but it’s all about how you deliver it,’ says Dave Upton, managing director of Focus Solutions.
‘We have invested in automation, but we’ve always thought we’d end up with a combination of human and technology.’
‘If you want to open up to a national market, you can do that with technologies such as co-browsing and remote advice sessions. What you end up with, ultimately, is the advisor spending more time on the really important bit, offering the advice.’
‘Artificial Intelligence, automation and technology will certainly impact data collection and some parts of analysis, but only to facilitate better advice for customers,’ Focus Solutions’ Head Of Managed Services, Steve Andrews, explains. ‘Automation will absolutely replace key advice activities in the future, but it’s not going to make flesh-and-blood advisers extinct. There will always be a space for high quality advice, and financial advisers will still be at the heart of the majority of advice delivered to their customers.’
Automation will also help financial institutions lower their operating costs in terms of customer support. By automating laborious, manual processes efficiently, advice and advisers could and should be more accessible to younger generations.
So it won’t be quite as simple as robots taking people’s jobs. Experts such as Dean Nicolacakis of PriceWaterHouseCooper have predicted that financial services will become embedded into people’s daily lives, so that, for instance, getting a mortgage might be as simple, and as automated, as paying for an Uber ride.
Like Steve Andrews at Focus, Dan Somers, CEO at Warwick Analytics, believes it’s all about getting the right balance of human and AI.
Somers says, ‘In the larger institutions there are still many humans interacting with customers and making operational decisions which could be done more effectively by, or with the aid of AI.
‘However, it’s all about getting the right balance of AI and human intervention. Too much AI won’t be able to deal with the most complex customer cases and too much human intervention will create inefficiencies.’
‘Customer expectations in the finance industry are changing, with more interactions across more channels, and larger, richer datasets. The good news is there are AI solutions appearing which optimise this balance.’
‘Until now there have been limitations when it comes to the manpower required to implement automation in fintech but recent advancements in AI will create far more opportunities, just beware to get the balance right.’
The use of ‘robo-advisors’ has grown by a factor of 70% since 2013, according to Bloomberg — it’s estimated that by the end of this year, robo-advisors will be managing up to $285 billion in assets.
AI has also had a significant impact on dealing with fraud, with PayPal using AI to spot fraud-like patterns of activity (for instance, strings of small purchases at convenience stores), according to Tim Moore of app development agency Sonin.
Moore says, ‘Automation is an opportunity for those in industries like finance where it can free up workers. Letting them focus on higher-value tasks and do so much more in their day-to-day. Automation doesn’t just boost your employees’ productivity though. By taking care of those repetitive tasks, it makes work more satisfying.’
While automation is likely to remove some jobs, new technologies such as cryptocurrency will create others we can’t even imagine yet, says Tim Doust of the Imagination Institute at Sussex University.
‘In just over a decade, 85% of people will be working in jobs that haven’t even been invented yet,’ says Doust.
‘We’re already seeing hints of what will come next. In finance, the bank is already changing. In cryptocurrency, we’re seeing something that’s hugely unregulated and unknown at this stage. But in there, are potentially the jobs of the future: you just need that problem-solving approach, that imagination, to respond to new technology by thinking imaginatively.’