Which areas of banking and finance will face disruption due to AI?

Artificial Intelligence is impacting job markets all over the world, and banking and finance is no exception. Across the industry, numerous areas are facing disruption. But just how will this impact the current job market? When automation is discussed, often the first thing people think of is job loss. However, across banking and finance, the opposite could in fact be true. We spoke to Jonny Demko, Business Manager at Huxley, to find out more about how AI could be offering up a wealth of opportunities for professionals who wouldn’t previously have considered working within the sector.

  1. Areas facing disruption

Retail banking is one of the biggest areas for disruption within the industry; “Improving customer service is a huge priority for banks within a competitive, commercial environment. And automation provides a fantastic vehicle for customer experience to be optimised. Nowadays, a good user experience relies on state-of-the-art digital platforms, and chat bots are a great way to appeal to customers – especially as their intelligence increases.”

As disruptive AI technologies continue to innovate the sector, this creates opportunities for many specialists who wouldn’t necessarily have considered a career within the space. Jonny expands on this, “Developers, Analysts and Engineers will be in high demand as automated chat bots continue to become more advanced, offering up a world of opportunities for technical specialists, allowing them to utilise their skills to greatly benefit the sector.”

Machine learning has also been highlighted as an incredibly useful tool when it comes to dealing with AML (Anti-money laundering). AI is enhancing many of the manual elements of this job – in today’s world, banks are able to put systems in place to automate manual functions that can improve efficiencies. It’s especially useful when it monitoring transactions and suspicious activity. According to Forbes, “ML can teach computers to detect and recognise suspicious behaviour and to classify alerts as being of high, medium or lower risk.  Applying rules to these alert classifications can facilitate the automatic closing of alerts, allowing humans to supervise the machines that triage these alerts rather than reviewing all of the alerts manually, and making better use of the time of these experts.”

NLP, is also having a profound impact on the sector. According to Simon Cafferkey, Associate Recruitment Consultant at Huxley, expanded on this, “Banks and research firms are using NLP to scrape documents, reports, news articles, and social media posts. This allows them to try and predict price movements and trends. Essentially, they’re looking for the same outcome as quant professionals, but are using public information to inform their analysis.” 

  1. Opportunities and challenges for candidates

The nature of artificial intelligence throws up a mixture of opportunities as well as challenges for candidates within the banking and finance space. While some lower salary jobs are set to become automated, there will be an increase in opportunities for highly skilled professionals across the entire spectrum of banking and finance.

According to Jonny, “Banks are needing to create more intelligent systems and solutions. And machine learning is a huge part of this.” There’s a huge demand for banks to create systems that are able to look at data, make highly intelligent decisions, and perform effective analysis. For the potential of machine learning to be realised, banks need to ensure they have the right specialist talent in place.

 “For hiring managers, this is absolutely an investment. While there’ll likely be a significant cost in the initial implementation and training period when automating lower level processes, the cost benefit will be a great reward for companies.”

  1. Candidates upskilling

As the industry moves towards an increased demand for technical specialists, the demand for an array of professionals is both large and diverse. One of the most in demand positions within the Investment Banking space will be for Quant Developers and Analysts, “These professionals put their skills to use working with masses of historical data. They would enable machine learning to produce predictions in regards to business critical decisions, examining key risk factors and market predictions. These roles are critical towards the industry’s progression and adoption of artificial intelligence.

With such a significant demand for specialist quant professionals, candidates are upskilling themselves to become more employable within the current industry climate. “Knowledge of machine learning and data science are highly valuable skills across the industry, and as such, having specialist knowledge within these areas makes you a hugely desirable candidate. We’re now seeing numerous candidates going away and upskilling themselves; whether that’s through online courses or studying to become a true expert and working towards a PHD in the specialisms – this kind of knowledge is invaluable when it comes to making yourself more employable.”

  1. Personalisation

While AI may be disrupting the sector, the human element of banking is still absolutely crucial. Finance is an unpredictable arena, and while systems that produce intelligence around statistics and numbers are highly valuable, there’s no accounting for external factors at play.  “We can use a real life example for this, imagine there’s a stock crash – no matter how intelligent the machine, it cannot account for random anomalies. It’s because of this that the human element will always be valuable.”

“This is a perfect example of how AI and human are compatible. While humans can theoretically function without AI, the opposite cannot be said. AI relies on humans to ensure its working correctly. AI and humans working together allows professionals to do their job in a way that truly enhances the industry, and makes professionals jobs easier. If AI is utilised correctly, it truly does open up a world of opportunity.”

To find out more about how Artificial Intelligence is innovating the banking and finance industry, click here to find out more and hear from our dedicated team.

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