“Machines will be capable, within twenty years, of doing any work a man can do.”
– Herbert Simon, developer of The Logic Theorist and General Problem Solver, 1965
Since the inception of artificial intelligence, people have attempted to predict how it will develop and affect the world as we know it. But for the most part, the optimistic predictions that have been made have ended up being quite wrong. For example, we know that Simon’s prediction did not come true by 1985 – far from it. And he wasn’t the only one who’s been wrong about how quickly things would progress. Other important figures within the development of AI have made similar short-term predictions that were pretty far off-target from reality – not only did they not come true within the timeframe predicted; they aren’t true even today.
So far in this series we’ve looked at the history of artificial intelligence in a modern sense up until present day. In this final article discussing AI and fintech, we set our gaze ahead. We won’t pretend to know how the future will play out, so we’ll consider the pros and cons of artificial intelligence moving forward in time, especially as it pertains to the fintech sector. We’ll also consider a few potential use cases where AI could be further applied to fintech scenarios in future years.
Artificial Intelligence offers many benefits to fintech as we consider the future and where fintech is headed. First and foremost, AI creates opportunities for cross-company collaboration in order to expand services and build new products. Instead of each fintech company needing to do their own AI development, they can collaborate with existing AI models to build out their services and better support employees and customers.
We’ve already seen how adding AI capabilities to financial processes has increased the speed of them and decreased costs for fintechs, and we predict this will only continue. The things that used to take days if not weeks to happen within the financial world will be able to be done instantaneously. This undoubtedly will increase the value of fintech companies as demand for their services grows.
In addition to these things, we see how utilizing AI will bring increased productivity within the fintech sphere. Instead of viewing AI as a threat to the job force, it instead should be used as a tool to automate many of the mundane manual processes that are necessarily part of developer’s and engineers’ jobs. If AI can take over those important yet tedious and mundane tasks, people are then freed up to do more creative and meaningful development within fintech.
The increased use of artificial Intelligence within fintech in the future will, of course, also have challenges. Some of the concerns we have today regarding AI most likely will continue to be topics to be dealt with in the future. First, many of the AI language models that exist today have been built on non-inclusive data sets, not because developers want the data sets to be non-inclusive but simply because those are the data sets available. AI using existing data sets definitely helps with speed, but it obviously creates results that are biased. Moving forward there must be a push to make the data sets AI is using as diverse and inclusive as possible, or those who are marginalized today will simply continue to be marginalized moving forward.
AI-generated identity theft is another concern that we suspect will continue to affect the world if we’re not careful. As cybersecurity changes, AI does too, and we assume it will continue to create issues for keeping data secure. The challenge lies in staying a step ahead of AI being used wrongly. Fintech will need to have legitimate security systems in place to ensure their customers will continue to have their data kept secure and private in an AI-driven world.
Lastly it’s worth noting that technology always moves much faster than legislation, which has created complex issues to this point and, we assume, will continue. Therefore it’s extremely important for governments to stay up on the advancement of AI so that it can pass legislation to protect security, privacy, and quality of life as we know it.
Now that we’ve anticipated some of the good and bad of AI in the future years of fintech, let’s look at a few use cases for how AI could (and probably will) be used within fintech in the years to come.
Most personal finance management apps today boast of AI capabilities to offer recommendations and advising to individuals, and we expect this phenomenon will get better in time. For example, certain apps claim that through AI, they can give personalized recommendations for how users can spend or save their money. While this is helpful currently, we anticipate that AI will make these recommendations more and more intelligent in the future by being able to use historical data to anticipate the market and then offer predictions that will help users avoid major financial disruptions before they happen. For example, if you’re someone who has irregular income (maybe you’re a freelancer or a small businesses owner), future AI could anticipate fluctuations and then in advance offer strategies to help you either budget for less income one month or show areas where you could increase your spending in a month with more income.
Credit score calculations are also already being affected by AI, and we hope things will continue to improve from here. Like we already mentioned above, concerns that the data sets AI is using are biased or non-inclusive are legitimate. Rather than AI focusing on the method or algorithm for determining an individual’s credit score, future AI will [hopefully] be able to identify and then mitigate biases that may exist within the system.
Many businesses today have multiple bank accounts for different operations, sometimes upwards of 30 or 40 accounts. You can imagine managing all of those different accounts is extremely tedious and complicated. This is another area where we anticipate AI could make a difference. While there are a handful of software systems already designed to help manage business operations, we think AI will develop these systems further to make them more automated and intuitive.
Finally, we can envision a future where business owners or developers could use AI to simulate the launch of a new product or service and then accurately predict and assess audience reaction. Based on this simulation, which AI makes not only possible but also accurate, businesses would be able to make decisions about whether or not to move forward and how much of their budget to allocate towards that project.
Artificial Intelligence has not yet affected the world in the way people have historically anticipated it would, but we know that doesn’t mean it won’t shape the future to come. In this moment of time, AI has made some major trends within fintech possible, and we predict that will continue more and more in future years.