Recently, the CEO of Singapore’s largest bank came up with the statement below; it says that in the next few decades, banks needs to put in some serious efforts for transformation or that they may die.
If we look at the present scenario, this is happening somewhere. With the advent of new online banking apps, traditional banks are being forced to cut jobs and shut down branches.
Evolving trends highlight the increasing number of startups, new innovative solutions, consolidation through acquisitions and changing customer expectations. Internet banking has emerged as the biggest focus area in the digital transformation agenda of banks.
Again, if we question how these FinTech startups are able to survive, we will find that there are many new innovative technologies that they are adapting to remain competitive. Machine learning is one of the latest technologies being adopted by these FinTech startups.
Machine learning is a type of artificial intelligence that provides computers with the ability to learn without being explicitly programmed. Machine learning focuses on the development of computer programs that can teach themselves to grow and change when exposed to new data. Affirm, Lending Club, Kabbage, Inc. ZestFinance, etc. are some of the FinTech companies using AI.
Robo-advisor services can quickly provide customers with well-diversified investment portfolios suitable for their risk tolerance and long-term investment objectives. Due to such convenient and low-priced service offered by this technology, a growing number of startups and traditional investment firms are also turning towards it. In recent years, the number of online execution-only investment platforms has risen dramatically.
According to a 300-page report conducted by investment bank Bank of America Merrill Lynch, the total global market for robots and artificial intelligence will reach $152.7 billion by 2020, and estimates that the adoption of these technologies could improve productivity by 30% in some industries.
Sales of robots worldwide hit a record high in 2014 with numbers topping 229,000. Last year also marked the third consecutive year of increase with 29% year-over-year growth.
“We are facing a paradigm shift which will change the way we live and work,” the authors of the BoA ML report said. “The pace of disruptive technological innovation has gone from linear to parabolic in recent years. Penetration of robots and artificial intelligence has hit every industry sector, and has become an integral part of our daily lives.”
We are already aware that robots are expected to perform more manual jobs in the future, from cleaning to machine assembly; but what's concerning experts is the development of artificial intelligence, enabling these machines to perform more “human,” analytical tasks.
The report said, “The combination of AI, machine learning, deep learning and natural user interfaces (such as voice recognition) are making it possible to automate many knowledge worker tasks that were long regarded as impossible or impractical for machines to perform.”
The new technologies will help in reducing costs and improving the performance. But the sad part is that this "revolution" could leave up to 35% of all workers in the UK, and 47% of those in the US, at the risk of being displaced by technology over the next 20 years, according to an Oxford University study cited in the BoA ML report.