How AI is impacting the finance industry: WWCC keynote


Speaking at World Wealth Creation Conference (WWCC) Singapore 2017 this week, Joel KO Hyun Sik, Founding CEO of Marvelstone Ventures, gave a 30 minute presentation on how artificial intelligence (AI) is impacting the finance industry.

Below, we recap some of the key points from Joel’s presentation:

  • Every day in the media we are hearing a lot about AI technologies. Bank trading floors used to be huge spaces full of people, now they are scaling down with fewer traders thanks to the advent of robo advisors and algorithmic trading. It’s the time to keep calm and study computer science.
  • We hear scare stories in the media about how AI is going to kill us all and steal our jobs. But AI’s progress will be limited by three human factors: intelligence, imagination (this is a big one), and institutions. All these elements will be designed by humans. Institutions are already limited innovation in some cases – just look at bans on Uber in various jurisdictions around the world.
  • In considering AI’s impact on the future, we must be aware of human-enforced limitations, especially from institutions.
  • Data is one of the key components for AI technology (not just quantity but quality). China is a leader in AI because they have huge population databases. Like humans, data has its own hierarchy of needs: collect, move and store, explore, aggregate, learn and optimise, self learning and decision making.
  • While data is the new oil, AI is the new electricity. For businesses wanting to leverage AI, they need to consider factors including: identifying the business case, setting up a data ecosystem, building or buying AI tools, and adopting the right work flows and processes. All this can help improve an organisation’s innovation, whether in the financial or non-financial sectors.
  • AI can enhance user experience, improve targeted marketing and pricing, improve forecasting, sourcing and planning, and optimise and automate operations. But some of this can already be done by existing legacy systems. The big differentiating factor with AI is whether the underlying algorithms possess self-learning capabilities.
  • AI is helping people think bigger by reducing repetitive tasks. Paperwork will be reduced, as well as accounting and scheduling, among a slew of other benefits.

  • In the next 3-5 years, each employee should begin to work in tandem with an “AI colleague”. The technology is almost ready, but our culture and legacy systems are holding us up in most cases. Every employee and businessman should be prepared to re-skill to exploit AI.
  • Industries and governments should focus on AI development and ecosystems to support growth and adoption. We must also focus on ethical and legal issues therein. It is going to bring a big impact to the workforce.
  • Sectors like banking have a lot of repetitive jobs, which in some cases will be replaced by AI. New jobs will be created in fields like data science. As yet, supply cannot meet demand.
  • AI stakeholders include government, corporations, social institutions, and startups. It will be the tech giants (Facebook, Amazon, IBM, Baidu) that lead in AI, not the banks. This means the tech giants can become tomorrow’s biggest banks, once they clear relevant licenses.
  • For CIOs and CTOs, now is the time to start thinking about a plan for AI development and adoption within their organisations. However, one of the challenges remains a lack of skilled labour (talent).
  • While banks have fairly structured data within their organisations, many companies in other sectors are lagging behind and will need to correct that soon.
  • Following our experience launching and running our fintech hub LATTICE80, we are planning to launch an AI hub next year in Singapore, with sister hubs eventually following in Japan, UK, and Canada.
  • What we’ve seen at LATTICE80 is that some AI startups are positioning themselves as fintechs. Meanwhile, big data and analytics companies are starting to position themselves as AI companies (i.e. AI-as-a-service platforms).
  • In finance, AI is creating new opportunities around robo advisors, trading, compliance, risk management, customer relationship management, data visualisation, security, credit scoring, and more.
  • Of all the sectors, finance has seen the most investment in AI. Cost reductions have been a big benefit of adoption. Tax and accounting companies will also rely on AI in future; they share some overlaps with the banks and financial institutions in terms of their internal processes and services.
  • Recent data puts AI investments by VCs and institutions at around $15.4 billion.
  • Some people think the AI revolution will hit us like an earthquake, but I don’t think so. Rather, it will take better and understanding of information (data), as well as the magnitude of what AI can offer – both from the general population and business. More time is needed.
  • While the AI revolution may not happen this year or next, it is slowly but surely starting and I think we can expect to see it being applied to every industry within the next decade.

Joel is also a Co-founder of LATTICE80, and President of Marvelstone Group.