A panel of finance and technology experts gathered at London Tech Week to discuss what AI means for humans working in finance, the fintech revolution and how the banking sector must modernise
Humans will pay the price for everyday mistakes by losing their jobs to “more reliable” robots, according to an academic.
Dr Andrei Kirilenko, director of the Centre for Global Finance and Technology at Imperial College Business School, believes artificial intelligence (AI) will become increasingly more prevalent in the finance industry in the coming years.
He spoke during a roundtable panel discussion for the Ant Financial Technology Exploration Conference as part of London Tech Week, in which the topics of the banking sector’s future, the rise of fintech, how technology can drive financial equality and cyber security were also up for debate.
Man vs machine
“The thing with humans is you need a lot of them, you need to motivate them, you have to give them bonuses, you need to give them incentives, and those incentives are continuously being misused,” he said.
“Therefore regulators, myself included, started looking for technology solutions that could automate a number of financial services and take humans out of it because lots of financial services are basically repeated tasks.
“Now, if you can take humans out of it, you don’t need to pay computers bonuses; you don’t need to give them incentives, they don’t steal, they don’t lie, they don’t manipulate.
“Financial regulators are not trying to use AI because they’ve all of a sudden woken up and thought ‘technology is cool’ - it’s the next iteration of where finance is going and the regulators want to be in that space.
“I think the financial services companies adopting technology is the next best thing.
Dr Kirilenko said there were many examples of tech companies that didn’t have to be bailed out during the financial crisis – because they’re more reliable and trustworthy.
“People trust their mobile phones, they trust their search engines, they trust the technology provided to them,” he added.
“That’s where it’s coming from there and this technology is really quite fundamental.”
1.5 million people in the UK are outside the banking system right now
For years, financial services haven’t needed to consider changing their business models - but now they must as a steady stream of fintech start-ups disrupt how money is managed.
Tasks in the financial industry that were once handled by people – including everything from setting up accounts to making payments – are now being completed digitally.
Janine Hirt, chief operating officer at global fintech representative group Innovate Finance, said: “London is particularly interesting. If you look at the UK as a whole we have more than 1.5 million people that are outside of the banking system.
“Half of those were in the banking system and left and some of those should have access to it and they don’t at the moment.
“We are seeing some interesting technologies around that.
“There are companies such as Credit Kudos [a scoring platform that puts the consumer at the helm of the credit profile] that are doing quite a bit with regards to credit rating and helping people to get good credit.”
Dr Kirilenko believes the finance and tech sectors shouldn’t mix.
He said if people are getting into finance they should know that it’s a heavily regulated industry – in which they’ll be touching other people’s money, and giving them advice about it.
“Regulations have naturally evolved to make sure money doesn’t get stolen or misused,” he added.
“When starting as a fintech company, stay as a technology company and not a financial company.
“Regulating technology is very different from regulating financial services - so try to not get into finance unless you really have to.”
Cyber security is still relevant
Ruhul Amin, chief architect and co-founder of identity verification software company Onfido, said: “Security and privacy is especially important after Cambridge Analytica.
“I think people are increasingly worried about where they’re data is being stored and there’s a lot of questions that need to be answered.
“Also being transparent with customers is vital and the use of AI is becoming very interesting especially with all that is being introduced, such as machine learning - there’s lot of challenges around the security.”