Most manager these days are on board with artificial intelligence (AI), but risk managers just don’t seem to get it. They’re not incorporating it correctly into their risk metrics or in their evaluations as to whether a business should implement it a all.
“The financial industry is moving at a faster pace with artificial intelligence than the skill set of risk managers,” says Steve Culp, senior managing director for finance and risk services at consultancy firm, Accenture. “Risk managers can’t afford to be left behind.”
AI’s main purpose is to give machines reasoning traits that allow them to carry out a job just as well (if not better) than a human. This includes the areas of natural language processing and machine learning. The problem is that is risk managers themselves aren’t up to speed with the likes of AI and all it can offer, how will they ever be able to incorporate it into their risk management projections?
There’s no other option but to accept AI and to learn to incorporate it into risk modeling strategies. “Artificial intelligence is nothing more than an advancement of computer technology, such as what was developed by black-box trading and fuzzy logic,” explains Samuel Won, managing director of Global Risk Management Advisors.
“Risk managers need to be able to successfully work with technologists to translate and convert their risk management subject matter expertise into machine learning which is the underpinning of AI.”
READ MORE – 10 Applications of Machine Learning in Finance
For the best results, companies should include risk managers, compliance managers, and operational managers when deciding how and when to incorporate AI into business. Just recently Broadridge’s AI application convinced risk managers that it held great potential for increasing revenue and was enough to convince them to jump on board.
There’s now five financial advisory firms using Broadridge’s AI application in which to sort through data while recommending new products and sending out mailings, emails, and social media posts.
AI has also saved compliance departments a lot of time and hard work. No longer will these guys have to read each individual client message. Using the AI application, around 90% of all messages can be approved automatically. “It’s all about monitoring the rise of the personalized message targeting the right customers at the right time,” says William Fairweather, vice president of strategy and for Broadridge Advisor Solutions.