Will Artificial Intelligence Technology Steal Your Job?

This article was written by Talia Shakhnovsky, a Financial Analyst at I Know First

Will Artificial Intelligence Technology Steal Your Job?

[AI] is the liberation of the finance professional from the tyranny of the spreadsheet.David Axson, managing director at Accenture Strategy 

Summary:

  • Artificial Intelligence Technology: The Path to Job Creation and Economic Growth
  • Your New Robotic Banker?: Labor Market Transitions
  • I Know First Epitomizes Working Together with Artificial Intelligence Technology


Artificial Intelligence Technology: The Path to Job Creation and Economic Growth 

With the advent of new Artificial Intelligence (AI) technology, the world waits on the verge of the next Industrial Revolution. Drastic change, however, carries fears with it. Some speculate that machines may replace workers or dread a future of technological growth they cannot begin to predict. 

Even in the near future, Artificial Intelligence Technology will cause rapid global economic growth. The McKinsey Institute predicts that AI will produce an annual global GDP transformation of 1.2%, four times that of the first Industrial Revolution. By 2030, they predict that AI will add 16% or $13 trillion to global economic output¹. Similarly, PricewaterhouseCoopers expects global GDP to increase 14% by 2030 due to AI technology². 

Despite these predictions of growth, people are wary of Artificial Intelligence technology. For instance, a survey by Pew Research found that Americans are twice as likely to express worry (72%) than enthusiasm (33%) about a future in which robots and computers are capable of doing many jobs currently done by humans³. On balance, people fear they will be replaced or rendered useless by new technology. While labor market transitions will occur, the McKinsey Institute expects employment to increase by 5% by 2030. The Financial Services Industry has already begun to undergo a revolutionary transformation due to AI, exemplifying how AI will affect the labor force as a whole. 

Your New Robotic Banker?: Labor Market Transitions

Globally, McKinsey attributes the economic impact of AI primarily to the automation of labor, accounting for roughly 70% of total GDP growth by 2030.  It is important to note that automation does not necessarily mean replacing entire jobs; automation will likely occur on a task by task basis. Jobs that involve social skills, judgement, etc are especially difficult to automate. Instead, automation of fundamental tasks will increase the productivity and quality of worker because machines can complement human skills.

Within finance, the quantity of information is vast, so decision making is difficult. Fund managers and financial advisers must make crucial qualitative conclusions by sifting through an abundance quantitative data. AI reduces the cost of this prediction by helping with forecasting and planning. For example, Accenture’s patented ZB x AI platform uses AI and machine learning to categorize financial transactions for instant spend analysis ⁴. Consequently, analysts can spend less time gathering information, and more studying and assessing the implications of various decisions.

Moreover, the financial services industry has pioneered the automation of customer service, reducing the need for front-of-house staff. Some institutions like J.P. Morgan have developed AI chatbots which anticipate the future needs of customers ⁵. Other organization use Robotic Process Automation to automate administrative tasks like inputting information. These changes have led to some worker replacement. Former citigroup chief Vikran Pandit predicts that AI may wipe out 30% of banking jobs within 5 years and the Mizuho financial group plans to use AI to replace ⅓ of its workforce by 2027: 19,000 people ⁶.

While it is inevitable that labor market transitions will occur, AI will become a tool instead of a replacement for many workers. In fraud detection, for instance, AI has alleviated time pressure on investigators, giving them the opportunity to investigate individual cases in more detail to better fight money laundering. Other applications of AI within finance involve personal assistants, customer profiling, spotting patterns, and streamlining repetitive processes which all aid the efficiency of employees. Thus, with AI as a tool, workers can utilize their time more valuably.

Moreover, just as each Industrial Revolution has created new, never before imagined, jobs, AI is also already creating new opportunities. Previous Industrial Revolutions have completely transformed the labor force with the mechanization of the textile industry, the introduction of mass production, the digitization of work, and now the work world stands on the brink of a new metamorphosis. Within the financial services industry, new artificial intelligence jobs include entire fields such as data science. Finance offers a magnifying glass at the impact of AI across the global job market: while some workers are being displaced, AI is fundamentally aiding the labor force as a tool and as a catalyst for new opportunities.

I Know First Epitomizes Working Together with Artificial Intelligence Technology

One of the most promising areas of finance where AI can make a difference is active wealth management. I Know First, a globally renowned Fintech company, utilizes a unique AI-based self-learning algorithmic forecast to uncover the best investment opportunities in the market. I Know First’s AI utilizes elements of deep learning, genetic programming, and chaos theory to model the markets as complex dynamic systems where small events can trigger major changes. Each day, the system uses new data inputs from market changes to learn from past information and improve its predictive performance. Today, I Know First’s algorithm considers over fifteen years’ worth of market data, and then outputs forecasts for six different time horizons spanning from three days to one year.

I Know First’s AI forecasts price dynamics for over 10,500 assets including stocks, ETFs, currencies, commodities, interest rates, and over fifty stock markets. The forecasts are presented as an easy to read heatmap with numeric indication of signal and predictability. The signal indicator represents how the asset will behave in comparison to the other assets on the forecast with high positive numbers suggesting that the stock will surge. The predictability indicator represents how accurately the algorithm has been able to predict that stock’s movements in its previous forecasts.

I Know First’s service includes two tiers. Tier I involves working with private clients by providing a daily support forecast with a heatmap of top asset picks over various time horizons. Tier II involves applying the AI algorithm to structure an investment portfolio for institutional clients. For both tiers, I Know First acts as a decision support system, or an information system of computer programs and data that supports decision making within businesses and other organizations. I Know First offers an objective statistical second opinion on different assets, removing the guesswork from investing.

Artificial Intelligence

Conclusion

Overall, as AI transforms today’s workforce including the financial services industry, I Know First highlights how people can work together with AI to make more streamlined and knowledgeable decisions. Among others beginning to adopt new AI technology, I Know First is a leader in not only its algorithm, but in seeing AI as a complement instead of a replacement. AI is on the brink of revolutionizing our world, including the way we work. 

Sources

¹

https://www.mckinsey.com/featured-insights/artificial-intelligence/notes-from-the-ai-frontier-modeling-the-impact-of-ai-on-the-world-economy
²

https://blogs.wsj.com/cio/2018/11/16/the-impact-of-artificial-intelligence-on-the-world-economy/

³

https://www.forbes.com/sites/joemckendrick/2018/08/14/artificial-intelligence-will-replace-tasks-not-jobs/#7f328c6ba7fa

https://www.forbes.com/sites/rogertrapp/2018/06/14/how-ai-can-help-leaders-make-better-decisions/#f9fd6ff5e2f1

https://www.forbes.com/sites/vishalmarria/2018/09/26/is-artificial-intelligence-replacing-jobs-in-banking/#3d12d6ad3c55

https://www.ft.com/content/b497a134-2d21-11e8-a34a-7e7563b0b0f4