October 4, 2015    3 minute read

The Future of AI in Banking and Beyond

   October 4, 2015    3 minute read

The Future of AI in Banking and Beyond

Ever since Hungarian born mathematician, John von Neumann, spoke in conversation about  a technological “singularity”, we’ve been on the edge of our seats concerning the potential of computing for nearly half a century. Yet today, such an idea is still relevant – Google futurist Ray Kurzweil wrote in his second book “The Age of spiritual machines” that by 2045:

“the pace of change will be so astonishingly quick that we won’t be able to keep up, unless we enhance our own intelligence by merging with the intelligent machines we are creating”

Today, big companies such as Google and Facebook struggle to handle their big data problems such as handling uncommon data types, managing correlations or dealing with the echo chamber effect. But with striking breakthroughs in “deep-learning” machines, speech recognition and image recognition, will these problems be trivial in just a few short decades time? The short answer is: maybe. The longer answer is that we are uncertain what the immediate future will bring, the only questions concerning our endeavors is: when?

In the banking industry, technologists are now more heavily relying on algorithmic trading to manage market risk but this comes with a price – someone has to write the code. In a not too distant future, at most twenty years away, Kurzweil predicts that a machine will pass the Turing test by 2029, meaning that there will exist machines that can convincingly show that they are human in response. This means per se that, applied to algorithmic trading in a time beyond 2029, a computer could convincingly design its own algorithmic trading algorithm according to Kurzweil’s prediction. Before an eventual singularity, this may mean that typical human trading may become obsolete and jobs once conducted by humans are replaced by the jobs of technologists in turn maintaining this technology or even that such a practice itself becomes obsolete. It’s not only these more complicated roles that could be replaced though, accountants could find that their jobs have been taken.

And what of beyond automated finance? In a world of never tiring machines, given an even more rigorous Turing test, are the emotional qualities required of more personal finance jobs under threat? Or will the merging of man and machine preserve the qualities required to perform more demanding finance tasks within the range of human capacity? Or Is capitalism in the long run, as we know it, in general, under threat? If an efficient economy driven by hyper-intelligent machines is possible, where does this leave those who are left out from the perks of the very wealthy? Perhaps a part of a reformed capitalism would include a GMI, a guaranteed minimum income welfare system, preserving the importance of humanity at its purest even in the transcendental wake of sheer technological apocalypse.

According to bigthink.com, Ray Kurzweil’s predictions have been, in total, 86% correct out of 145 predictions. Consider for a moment that this is the same man who believes that nanobots will inhabit the brains of the select few in the 2030s, it may well be that the machines who replace human beings for these jobs are indeed only enhanced human beings. For some predictions, we can be certainly be very sure, for others, they may seem much more far fetched. Only time will tell if 2045 produces a terminator style economic process.

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