Authors and Contributors: Sankar Krishnan, Executive Vice President, FSSBU; and Ramsha Perwez, Software Associate
In the world of finance, AI has taken a step to improving productivity by using algorithms to perform the tasks that humans do. Recently, HSBC Holdings Plc. moved forward with a pivotal decision to tackle money-laundering investigations by AI technology with startup Ayasdi Inc.
Of course, while this decision comes with many positives, many questions arise too, as this unit was dominated by thousands of real humans. This change leads to major shift in the demographics of the company. Optimization of human workers will be at an all-time high. According to the report made by Reuters, 20% of investigations in HSBC were dropped after converting to AI. The initial number of cases remained the same. The freed-up capacity of humans can be redeployed by HSBC into newer domains that make the employees more engaged and valuable.
Perhaps it is time to integrate new technology into processes more closely, so that future mistakes can be avoided. HSBC was not the only bank that had to pay fines for failure to detect money laundering. Last week, Deutsche Bank was fined a staggering $41 million over anti-money laundering deficiencies. Another bank hit with massive fines was Allied Irish Banks Plc, who was preparing massive share sales and billed 2 million euros according to a Bloomberg report. If AI was implemented, time would not be wasted by human workers on cases that were not in any risk. Decisions would also be made faster. If mistakes were being missed by humans in these examples, it would seem that now is the time to take correct proactive measures against the rising competitors. Our belief is that a lot of the automated tasks would initially have to be reviewed by a human before the audit committee signs off on the process and assigns it to “bots” completely.
Banks all over the world are being reprimanded by regulators and are being forced to cough up heavy fines that could even potentially dismantle them so it may seem as though investing into an AI system would be the proper step.
It is nice to see HSBC take the lead here. A lot of banks are also keen to put AI and Machine Learning to “botify” areas ranging from fixed income sales and regulatory reporting to production support and testing to customer service.
Cognitive bots (that integrate analytics, AI, machine learning) will take over a significant portion of the work done by humans and it is not going away come what may.