How AI in Finance Changes Operating Models

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CFTE continues its series of deep dives into AI in Finance, looking at how financial services must consider new age solutions, ethical dilemmas, market structure and talent as a result of these changes.
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AI in finance is not just a fad that is designed to make a company look good on the outside; it also transforms how operations in the back-end work. In fact, it can improve operations to such an extent that some companies may even make it available as a commercial service, changing the way a traditional institution works. However, it can also have an adverse effect on talents, especially if they have not been upskilled to understand its potential.

For instance, let us assume that a financial institution makes use of artificial intelligence to drive change in operating models in their centres. Through algorithms and machine learning, these processes continue to improve by utilising data collected from its users, allowing it to self-improve at a rate much faster than previously thought imaginable. In some instances, the usage of cloud-based architecture allows for easy “plug-and-play” with third-party services, allowing more data to be processed in a shorter period. This also further pushes the agenda of centres of excellence becoming services, which can be demonstrated in the rise of open APIs and open banking.

Examples of best-in-class processes that have been made available as SaaS offerings include BlackRock’s Aladdin and Ping An’s OneConnect. So much so that BlackRock’s CEO Larry Fink says that he wants Aladdin to contribute 30% of the company’s revenue, while Ping An’s SaaS is used by almost 500 banks in China.

With open-source AI, it is not hard to mimic successful algorithms. This renders efficiency as a competitive differentiator obsolete as all institutions can now implement the best AI in finance practices. However, it also gives a clear advantage to early movers as it is much harder to collect quality data. Naturally, those that have been transitioning for longer will have much more data at their disposal, allowing them to learn and improve faster.

Shameek Kundu of Standard Chartered says in the CFTE AI in Finance course that “finance professionals have a tremendous opportunity ahead of them in an AI enable world” – this is reflected in how AI is changing operations models in financial institutions. It is now up to professionals in the field to learn how it works in order to make the most of such an opportunity.

About the AI in Finance programme

The CFTE AI in Finance course has been developed in partnership with Ngee Ann Polytechnic, a leading institute of higher learning in Singapore and features high-quality content taught by five senior lecturers and 18 industry experts.

With an easy to follow format, the course is perfect for busy professionals to understand the technologies behind AI and machine learning that are disrupting finance.

Click here to learn more about the CFTE AI in Finance course.

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These series of articles is based on the Deloitte report titled “The new physics of financial services | How artificial intelligence is transforming the financial ecosystem” released in 2018. Click here to download the full report.

 


About CFTE

We are a platform supported by senior leaders from the largest institutions, startups and universities. We address the needs of professionals in finance to upskill in a rapidly changing industry being transformed by emerging technologies. More than 50,000 participants learn from our online courses, such as AI in Finance, Fintech Foundation or Extrapreneurship, a mini-MBA with fast growing startups such as Revolut or Shift Technology.

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Cover image from finance-monthly.com

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The Centre for Finance, Technology & Entrepreneurship (CFTE) is a global education platform that aims to equip financial professionals and organisations with the necessary skills to remain competitive in a rapidly changing industry. Our leading training programmes, curated by global industry experts, help talent build skills to join the digital revolution in finance. CFTE’s courses are globally recognised with accreditations from ACT, IBF, CPD, SkillsFuture and ABS.

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