Robots aren’t taking over the world but the financial sector can no longer ignore the need for artificial intelligence

12th February 2019

It looks like artificial intelligence (AI) will reshape our working and private lives. At the rate of which it’s being embraced, it’s safe to say that it’s no longer science fiction, but more like science (fact).

Even President Donald Trump is getting in on the act. Just this week, the president of the United States told the US administration to give greater priority to AI. While it’s not clear where the funding for this will come from or how AI will be deployed, it’s clear that America is taking it seriously, particularly as it wants to stay ahead of competitors such as China.

Back on our shores, the UK is also jostling for position in the AI innovation space. It was reported last year that the UK will spend about £1 billion (public and private funding) to ensure that it doesn’t fall behind.

Glancing at the corporate world, and specifically at the insurance sector, it’s clear that there are some companies powering ahead with AI ambitions. Axa recently revealed that it is using AI to reduce the amount of repetitive work administration staff need to do.

It expects to save 18,000 hours a year through the use of three software robots across the company it has been reported. The robots are known as Harry, Bert and Lenny. Harry has been actively doing work for the customer property claims team since June last year. Meanwhile, Bert and Lenny will service the commercial property and liability teams.

Humans can hardly match up to Axa’s AI capability. According to ComputerWeekly, the reports can carry out tasks that can take a mere 42 seconds to complete, whereas it takes a human four minutes to conduct the same exercise.

Axa is not the only insurer to make use of AI – other insurers using the technology to handle claims include Allianz Insurance and in January this year Munich Re announced that it had invested an undisclosed amount into German Research Centre for Artificial Intelligence (DFKI), one of the leading AI research institutes in Europe.

By 2025, which is a mere six years away, AI will be seen as normal and this is understandable because with such productivity levels it’s set to save companies money. According to one report by Opimas there should be a 25% improvement in financial institutions cost-to-income ratio by 2025 as routine processes are automated.

Unfortunately, a lot of it will be down to a reduction in headcount if AI technology is adopted. Worldwide, by 2025, it is expected that around 230,000 positions will be wiped out because of AI. However, what can’t be discounted is the jobs that AI is bound to create, which is set to be in the hundreds of thousands.  

Fearing AI because of the loss of jobs would not be practical though. Through the years and industrial revolutions, we’ve seen how technology (think cars, trains, etc.) replaced what people or animals have been able to do.

And while new technologies have made some professions redundant it’s created new jobs. When it comes to AI, it’s bound to create positions and opportunities that don’t even exist yet. It’s an exciting time for all, provided AI is adequately funded, managed and welcomed by upper management.

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