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AI Gains Traction in Financial Services

A new report indicates that companies are utilizing artificial intelligence in market analytics, post-trade processing, trading systems, and data mining.

According to the report compiled by Broadridge Financial Solutions, a technology provider to asset managers, brokers, banks, and other enterprises, the adoption and use of AI is increasingly growing, particularly in the financial services industry in the United States.

Broadridge conducted a survey involving 153 financial services experts in May 2019 at the Securities Industry and Financial Markets Association Operations Conference & Exhibition.

The firm discovered that data mining is the financial services industry’s main priority for artificial intelligence applications, and was cited by about 36% of the respondents.

Others like post-trade processing, marketing analytics, and trading systems followed suit at 20%, 13% and 12% respectively.

Most of the respondents, 84 % to be specific, claimed their company is past or in the artificial intelligence “Enlightenment Age”.

MORE: 10 Applications of Machine Learning in Finance

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About 29% of the companies have entered the “Industrial Age”, with their pilot programs, whereas 20% are currently in the “Information Age,” with artificial intelligence in full production.

Even though many companies in the industry are in a given AI adoption stage or still exploring the technology, 10 % claimed that they do not have an existing plan of using artificial intelligence.

The desired outcomes or top motivations for investing in artificial intelligence include increased productivity and efficiency (53% professional responded), improved data and security (69%), and the capacity to redeploy human capital (51%).

The report revealed that it is motivating to see that a large number of respondents know the benefits associated with AI capabilities, even though several obstacles prevent implementation.

Almost half of all the respondents involved in the survey (46%) said legacy technology was their leading impediment.

Other factors that prevent the implementation of artificial intelligence include the cost of investment, which was pointed out by 31% of the respondents, as well as attaining executive buy-in (7%).

Broadridge’s Head of Strategy Michael Tae noted that even though many organizations understand that artificial intelligence is a transformational technology with massive potential impact, they are cautious when it comes to adoption.

According to him, the survey revealed that companies have to create a clear plan and framework first in a bid to harness the potential of artificial intelligence as well as successfully boost its adoption.

A report from Transparency Market Research forecasts that the global artificial intelligence market will grow at a compound annual growth rate of 36% all through 2024.

Some of the growth drivers of this technology include the skyrocketing rate of big data technologies adoption as well as the AI application to massive volumes of data.

Other factors that are contributing to the growth of artificial intelligence include technological improvements in various areas like advanced digital assistants.

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According to the report, North America makes up the largest portion of the global market (38%), due to intensive development and research.

The artificial intelligence (AI) market comprises of applications like cybersecurity, context-aware processing, video analysis, speech recognition, image recognition, deep learning, language processing, digital personal assistants, and gesture control.

Impediments of market growth include concerns over data theft or loss and lack of adequate technical expertise.

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KC Cheung
KC Cheung has over 18 years experience in the technology industry including media, payments, and software and has a keen interest in artificial intelligence, machine learning, deep learning, neural networks and its applications in business. Over the years he has worked with some of the leading technology companies, building and growing dynamic teams in a fast moving international environment.
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