Elon Musk and Mark Zuckerberg, two of the world´s tech titans, have openly expressed their views on Artificial Intelligence. Mark Zuckerberg maintains an optimistic view saying artificial intelligence (AI) has the potential to improve systems across various fields. Elon Musk, on the other hand, believes that AI is a topic that must be approached with caution as it poses a threat to the very existence of human civilization.
The term artificial intelligence is not something new. In fact, it was first heard of over 50 years ago. Financial institutions such as banks have been constantly investing in AI for decades. However, the recent advances in machine learning, voice recognition, language processing, and computer vision has made AI a hot topic yet again. Obviously, being a hot topic today, Musk and Zuckerberg are weighing in on the matter.
Artificial Intelligence mean different things to different people but for the purpose of this article, our focus will be Artificial Intelligence defined as machines that can carry out or execute tasks which under normal circumstances require a certain level of human intelligence such as decision making or visual perception for example.
Artificial Intelligence vs Augmented Intelligence in Finance
The idea of machines replacing humans in many functions such as machine learning, personal assistants or digital labor is not farfetched. That being said, it doesn´t mean it will happen now because there are several hurdles that need to be addressed before we get to that level.
Augmented intelligence means machines assisting humans and this is currently widely used and invested in in the world of finance.
The continued advancement in big data, cloud computing, and processing speeds means that many organizations will continue to invest in machine learning and cognitive computing so that organizations may be able to do deeper analysis on trends or patterns or to comb through thousands of financial information.
At the moment, many financial software vendors are focusing on automation and digitization in order to increase operational efficiency and transparency. However, once the goal of digitization and automation of many organizations has been achieved, cognification is the next step.
Cognification is a process of making objects smarter by connecting, integrating sensors, and building artificial intelligence into them. The idea of many firms using and investing more in AI in order to improve their decision making process continues to be a dream of many decision makers.
Higher management of ambitious organizations envision an enhanced capability of being able to forecast customer behavior depending on different scenarios and a capability where they can continue to better test many different assumptions.
Today, artificial intelligence in finance is currently approached or viewed as mere extension of analytics capabilities and this goes to show that artificial intelligence in finance is still in its early stages of adoption. As we discover more about what artificial intelligence can and cannot do, so will the use of AI in finance be more clearly defined.
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