Technology trends in financial services: How much are we willing to give up to AI?

On the 4th of April, Thomson Reuters streamed its inaugural TechFuture event to an audience of executives in the financial services sector.  An exemplary panel explored how artificial intelligence (AI), machine learning (ML), chatGPT and the Metaverse have impacted financial institutions, and what emerging technologies will shape the industry.

The panel comprised some of the brightest minds in financial services – Alfian Sharifuddin, Chief of Technology & Operations for DBS Bank, Dr Alex Antic, Data Scientist and Co-Founder of Two Twigs Advisory and Samantha Horton Chief Business Officer from Fintech Syfe; all of whom were interviewed by Reuters’ Editor at Large Axel Threlfall.

Radical advancements in technology are spearheading business transformation across the globe. Tech companies continue to infiltrate the financial services landscape, merging traditional banking models into an ecosystem of evolving technologies.  The panel discussed the potential of these technologies, the real disruptors and the challenges and limitations they face.

“We are at a pivotal point in history where we have an opportunity to actually shape what happens next…The future will be based on human-machine interaction rather than us…giving machines complete autonomy.”

Dr Alex Antic, Co-Founder of Two Twigs Advisory

Here are the top five insights shared during the discussion:

1. ‘Democratising’ data is part of the plan

Alfian Sharifuddin of DBS Bank stated that “of all the emerging technologies that have come over the last few years, data and AI is…at the top of our agenda.” Like many organisations these days, DBS runs a data driven operating model which enables teams to make the decisions for the business in a more efficient way.

“We have attempted to democratise data…by identifying different data personas and then creating a set of AI tools to get the best insights into their business segments.”

The Two Twigs Advisory Co-Founder, Dr Alex Antic agrees with the importance of democratising data, and many of his financial services clients are experimenting with this.

While cloud computing and IoT are considered essential and almost ubiquitous, the Metaverse has taken somewhat of a back seat despite the initial excitement around it. “The metaverse is sort of a solution looking for a problem, as there are other things that already solve what they are solving,” said Alfian. “It will likely have value in branding and positioning as a leading company.”

2. Culture and the use of positive technology

The importance of culture and the way people work and interact with clients was also highlighted as critical to innovation, with Alfian citing “culture eats strategy for breakfast”, a quote famously credited to former American business consultant and author Peter Drucker. Alfian shared that a pivotal point in time at DBS was when it shifted its culture from a siloed approach to a startup mentality.

When you’re recognised as the ‘World’s Best Bank’ multiple times, you know they are doing something right, and their culture-centric foundation permeates through the organisation.

Samantha Horton of Syfe, commented on the use of positive technology for accessibility and affordability in the financial services sector, while emphasising the importance of maintaining a human touch while leveraging this technology to enhance the investment experience.

“Investment decisions need to be made by humans, not computers…(as) money is a very sensitive topic and (people) need to feel the human touch.”

3. Data ethics and building guardrails

“Many financial services clients are looking at ethical, responsible frameworks and policies,” Dr Alex Antic stated, adding that one of the biggest hurdles many organisations face is how to shift from the theoretical policies and frameworks and making them work in practice.

“There are some guardrails that have to be used… whilst you are leveraging technology, to ensure the final decisions are still made by humans,” added Samantha.

4. What are financial services getting excited about?

According to Alex, what financial services are getting excited about “…really depends on the maturity (from a data and analytics perspective) of the organisation and their appetite for risk.”

On one hand, there are many organisations who are early adopters of AI and machine learning (ML), so they would be looking at newer technologies and investing deeper into other natural language processing (NLP) like ChatGPT4, for efficiency gains. For those who are lower on the maturity curve, they’re investing in technology and people, and looking at what infrastructure they need to become data driven and AI ready.

“They’re less excited about the sexy stuff like ChatGPT, and more excited about what staff need to democratise data,” said Alex.

Samantha talked about the evolution of AI and how technology can be used to create more personalised journeys such as prompting a person to act when something else they do is triggered.  “That’s where AI can play a big part in scaling and personalisation,” she added.

5. Future predictions

Some members of the audience commented anonymously that in the coming year, they are looking to use AI and ML more for predictive analysis and generating insights for large data sets, as well as blockchain and DeFi for continued ecommerce evolution. Emerging technology will become even more powerful with open banking, but the flip side is the fear of increased fraud and risk. Data ethics and setting guardrails, together with maintaining human operations will be key.

Alfian suggested that the human touch will be key. “While AI and machines will drive our level of excellence to a very high point, our end customers are humans, so we also need to dial up the concept of empathy and then, we can have very happy customers.”

Towards the end of the session, Alex postured: “I think ultimately it will come down to how much authority are we willing to give up to algorithms and AI?”

Click the link to watch the full TechFuture webinar on-demand replay: Innovators Reshaping Financial Services. 

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