Over half of American finance sector jobs may be replaced by next generation artificial intelligence technology within a decade.
Financial technology and industry experts are predicting the mass turnover from human employees to artificial intelligence (AI) will happen.
James D’Arezzo, CEO of Glendale, California-based Condusiv Technologies notes that the financial industry is beset already by “a tsunami of data” in the rush to innovate fintech AI capabilities.
Human jobs won’t disappear overnight. There will be new industry compliance requirements and standards for consumer privacy.
Bank and financial industry regulations will constantly change in the interim as well. “It’s an explosion of data, and then you have AI on the other side, which increases that information load,” he said.
Even with the hassles of infrastructure changeover, experts agree that AI-based technology will halve the human presence in finance.
Former Deutsche Bank CEO John Cryan predicts the same. “Tomorrow we will have robots behaving like people. It doesn’t matter if we as a bank will participate in these changes or not, it is going to happen,” said Cryan.
AI already is set to replace a host of human-based positions. These include claims management, fraud detection, automated customer support, predictive analysis and wealth management services.
Some experts predict that almost half of all American jobs are subject to AI replacement, not just the fintech sector.
The impending changeover won’t happen without significant financial or logistical complications, though it’s already occurring on a small but spreading scale with the advent of robo-advisors.
“Unless banks deal with the performance issues that AI will cause for ultra-large databases, they will not be able to take the money gained by eliminating positions and spend it on the new services and products they will need in order to stay competitive,” said D’Arezzo.
Widespread and intensive hardware upgrades will be a constant bane of the impending changeover.
D’Arrezzo points to AI operational upgrades currently underway by the Tokyo Institute of Technology Global Scientific and Computing Center.
The institute is currently developing and testing an AI supercomputer to deal with the demand of big data applications.
While in the beta testing phase now, an AI breakthrough could happen. If so, the entire financial technology industry infrastructure will need overhauls and updates to accommodate the change.
AI and supercomputer technologies of the present will cost anywhere from $50 million to hundreds of millions of dollars before costs are justified.
The costs of research and innovation negates any cost reduction advantages of AI — for now.