Market analysts are of varying opinions on this.
The number of automated portfolios that were invested increased by 210 percent between 2014 and, according to the company that conducts research Aite Group.
Robots are already taking over Wall Street, as hundreds of financial analysts are replaced by computer programs or robot advisors.
In the US, according to a 2013 study written by two Oxford academics, 47% of jobs are “high risk” of being automated in the coming 20 years. Approximately 54% of the jobs that will be lost will be in finance.
It’s not only the case with an American phenomenon. Indian banks too, have reported a 7 percent decrease in headcount for two quarters consecutively due to the advent of robots into the workplace.
It’s not surprising, perhaps. In the end, the financial and banking industry is primarily based on processing data, and a few of its most important activities, like updating passbooks or cash deposits, are heavily digitized.
A man walks out of the Axis Bank automated teller machine (ATM) in New Delhi, India. Adnan Abidi/Reuters
Today, the financial and banking institutions have been swiftly adopting the latest generation of technology that uses Artificial Intelligence (AI) for automatizing the financial tasks normally performed by humans, such as operations and wealth management, as well as algorithmic trading and risk management.
For instance, JP Morgan’s Contract Intelligence (COIN) COIN program runs on a machine-learning system that helps the bank cut down the time required to examine documents for loans and reduce the amount of loan servicing errors.
This is the increasing dominance of AI in the banking industry, and, as Accenture estimates in 3 years, it will be the main method by which banks communicate with customers. AI will allow for more straightforward user interfaces and be user-friendly, the report for 2017 says, which will aid banks in creating the most human-like experience for customers.
Customers of Royal Bank of Scotland and NatWest, for example, may soon be communicating with customers through the aid of a chatbot that is based on Luvo.
Luvo was created with IBM Watson technology, which is able to comprehend and learn about human interaction, eventually rendering the flesh-and-blood-based workforce obsolete.
Additionally, HDFC, one of India’s biggest private sector banks, has announced Eva. The first chatbot based on AI in India is able to integrate knowledge from a variety of sources and simply offer answers in just 0.4 seconds. At HFDC, Eva is joined by Ira, the bank’s first humanoid branch associate.
A robot called ‘NAO, made through SoftBank Group Corp., is on display during the Viva Technology conference in Paris, France, June 15, 2017. REUTERS/Benoit Tessier. Benoit Tessier/Reuters
AI has also gained traction within the investment sector and, as many financial analysts believe an a,dvanced trading machine with the capability of learning as well as understanding will soon make the most sophisticated and sophisticated investment algorithms appear primitive.
Advisory bots enable businesses to assess deals as well as investments and strategies in less time it takes today’s quant analysts to accomplish this with the traditional tools of statistical analysis.
Former Barclays chief Antony Jenkins, who called the rapid automation of the banking as an “Uber moment”, forecasts the technology could result in the majority of banks and financial-services workers around the world redundant within 10 years.
Goodbye, Human fund managers!
The fintech graduates of the future
Universities are currently revising their educational plans to be able to adapt to the changing technology of the financial job market.
Each of Standford University and Georgetown University business schools plan to include so-called “fintech” in their MBA programs and hope to train the students to be masters in financial technology.
The Welsh-based Wrexham Glyndwr University has announced the launch of the first UK undergraduate degree in fintech.
Fintech is so innovative and complex that academics are struggling creating a curriculum that covers Financial Technology 101, let aside more advanced topics in AI. The absence of textbooks for academics and expert instructors are further issues.
Robots go wild
However, it’s not certain that AI and automation could benefit banks.
Relying too heavily on AI could be detrimental in the event that banks are unable to provide the personal touch that customers like.
There are other dangers as well. Robo-advisers can be inexpensive and help will save you time when creating an investment portfolio that is simple however, they might struggle to implement the proper preventive measures when markets are volatile, particularly when millions or even thousands of machines are trying to do the exact same thing at an incredible speed.
The month of August was when robot stock traders from Knight Capital Group had a shopping spree which were able to lose $440 million within 30 minutes.
