Advances in technology have brought forth job losses for a very long time. The days of artisans producing virtually everything from scratch in small workshops are long gone.
With the explosion of human population around the Industrial Revolution came the need to develop the ability to have more things, faster. Instead of having one artisan hand-make a pair of shoes, factory assembly lines were developed to decompose this work into smaller, high-specialised sequences.
The Industrial Revolution impacted all aspects of human life, from the production of food, clothing and housing to medicine. Mechanisation meant skilled workers, such as handloom weavers in Britain, lost their jobs. In the finance industry, when stock tickers and trading tickets went electronic, lower-paid clerks became unnecessary.
Fast forward a couple of hundred years and we’re facing similar concerns as robots do more and more of the work once reserved for people.
Is tech taking our jobs?
A new report from PwC suggests that up to 30% of UK jobs could potentially be at high risk of automation by the early 2030s and the figure could be as high as 38% in the US.
The risks appear highest in sectors such as transportation (due to self-driving cars) and storage
(56%), manufacturing (46%) and wholesale and retail (44%), but lower in sectors like health and social work (17%), the PwC report said.
For individual workers, the key differentiating factor is education, PwC says. For those with GCSE-level education or lower, the estimated potential risk of automation is as high as 46% in the UK, but this falls to only around 12% for those with undergraduate degrees or higher, it said.
Does that mean those of us working in the more “professional” industries such as law, finance and medicine, are relatively safe from the rise of bots?
A 2013 study by two Oxford University academics suggests otherwise. It claims finance has more jobs at high risk of automation than any skilled industry, about 54%, due to the degree to which the industry is built on processing information.
Global banking giant Citigroup agrees. The downsizing of the bank workforce is about to accelerate as more technology takes over jobs humans used to do, according to a Citigroup a report titled “The Digital Disruption.”
The number of employees at American banks would drop to 1.8 million people in the year 2025, down from 2.6 million in 2015 and 2.9 million before the financial crisis, the report said. And Citi paints an even gloomier picture for European banks, predicting a sharper drop of 37%.
Tech make our lives easier
Robots are being used by many financial firms to cut down labour costs. Customers rely less and less on walking into a branch for their banking needs — just think about when was the last time you had to queue up at a bank.
We now have awesome digital options that cut down waiting time and enable us to deal with most financial issues online via online chats, mobile phones and Internet banking. We’re able to pay our bills, send/receive money and even make investments online, without talking (face-to-face or via voice call) to a human being at a bank.
Many of the world’s leading banks are jumping on the Chatbot wagon, with many launching chatbots to service their customers.
Bank of America (BofA) is expected to launch Erica, a voice- and text-enabled chatbot for its customers, later this year. Erica is being touted as an intelligent digital assistant designed to help customers make smarter banking decisions. Erica will send customers notifications, identify areas where they can save money, provide updates on their credit score, and facilitate bill pay within the BofA app.
Digibank by DBS, Asia’s only digital-only bank, offers customers a 24/7 virtual assistant within the bank’s mobile app. Touted as a personal banker at the customer’s beck and call, DBS Digibank is a mobile banking app that aims to make banking simpler, smarter, faster and more secure.
In the asset-management industry, “robo-advisors” are the next big thing. They are a digital breed of investment managers that leverage the Internet to offer customised investment portfolios to clients by employing algorithms.
In a June 2015 report, McKinsey estimated the potential value of personal financial assets that could be served by virtual advice (which includes robo-advice) at USD13.5 trillion.
Robo-advisors may provide individual investors more choices around getting financial and investment advice at a fraction of the costs associated with traditional portfolio managers and financial advisors, Citigroup says. Robo-advisors offer a unique proposition to investors with low account minimums, low fees and investments mostly in ETFs, it says.
What about your taxes? Will you need to continue to pay high fees to your accountant every tax season? With artificial intelligence now able to process and analyse images, sounds, and text better than ever before, you may be able to get your taxes done without pulling your hair out in frustration or making costly mistakes.
Chatbots are the future in finance
Throughout history, machines were developed to solve specific problems. But now, we’re bordering on the age of what was once science fiction — machines can now learn on their own and improve themselves while collecting, processing and analysing an enormous amount of data.
Artificial intelligence (AI) is developing at light speed, with machines learning to see, recognise voices and process natural language, among other things. Banks are already using AI in heavily-manual processes for accuracy, efficiency, speed and cost benefits.
Chatbots are and will continue to be a game-changer to enhance front-end services at financial institutions.
Accenture in a recent report said 79% of banks surveyed agree that AI will revolutionise the way they gain information from and interact with customers while 76% believe that, in the next three years, the majority of organisations in the banking industry will deploy AI interfaces as their primary point for interacting with customers.
Some market leaders have already launched their own bots to provide clients with various services. For example, customers of HSBC can connect with the bank’s virtual assistant, “Amy,” which provides instant support to customers’ inquiries around the clock.
American Express offers an Amex bot for Facebook Messenger and its updated chatbot will enable eligible US consumers and OPEN Card Members to answer certain queries related to their account and card information.
Mastercard recently announced Masterpass-enabled bots to drive more seamless shopping on Facebook Messenger with Subway, FreshDirect, and The Cheesecake Factory. The bots use AI technology to enable consumers to interact with the retailers, build their order and securely checkout using Masterpass, all without leaving the Messenger app.
AI and chatbots will likely revolutionise the way financial institutions gather information and interact with customers. With 1.2 billion people using Facebook Messenger around the world, there is no better way to access consumers.
Financial institutions are banking on this access and continue to come up with new and innovative ways to use the technology of chatbots to have a better understanding of customer beliefs and intentions. The more they learn about customers from their interactions with chatbots, the easier it becomes to offer targeted products and services.
Afterall, once you know what people want, it makes it that much easier to provide seamless customer experiences and obtain better competitive positioning. Although it may take some time for the technology to mature and for customers to fully adopt it en masse, a majority of financial institutions believe that conversational interaction via chatbots is a natural evolution of existing online services.
How Chatbots Are Creeping Into The Finance Industry was originally published in Chatbots Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.
Source: Chatbots Magazine