Temenos Talks logo

Robotics in banking: more Iron Man than Terminator

By Adam Gable 1 Sep 2017

Talk of robotics ending the world of work as we know can be misleading and disingenuous. Rather than replacing our jobs, robotics and AI has the ability to enrich them, freeing up time to concentrate on what we do best – innovation and creativity – writes Adam Gable

Artificial Intelligence and robotics are the hot technology topics of the year. In the first three weeks of August, for example, the Financial Times published at least 19 articles – covering banking, chatbots, tractors, manufacturing, weapons, financial services, fund management, politics and vacuum cleaners. Other publishers were even more prolific.

Some stories play down the achievements to date. Others raise dystopian visions of robots without moral judgment, programmed to kill, while an idle race of humans withers away without work. Few discuss the benefits of AI and robotics in a rational and informed way. This is a shame because the reality is that robotics – long used to automate expensive, boring and time-consuming tasks – can continue to enhance life, not detract from it. Advances in technology are now freeing up resources for innovation and creativity, and enabling humans to do their jobs better.

Scaremongering – with talk of mass redundancies – maybe wide of the mark, there will always be roles for humans. We're a long way off having robots that can match us on judgment calls, collaboration, intuition and communication as well as of course designing and developing our automated counterparts. According to AI expert Margaret Boden, of Sussex University, the smartest computer would take 40 minutes to simulate one second of 1 percent of real brain activity.

Visions aside of humanoid helpers that writers such as Isaac Asimov imagined back in the 1950s; today's robotics are largely a more sophisticated evolution of previous automation solutions. Small, lightweight, easy-to-program software tools that can automate a range of dull, digital activities. Ideal targets for their application are costly, time-consuming, laborious, dangerous and/or repetitive tasks. In banking, there's plenty of scope for their use.

Take financial crime mitigation (FCM). With ever more regulation aimed at preventing fraud, banks have a more onerous job on their hands. Much of the work is dull – collecting and sorting data – tasks which robots can do far more quickly and thoroughly than humans. But the analysis of their reports, an interesting and dynamic task, can only be done by people. By programming robots to do the former, banks can pour more resources into the latter. Added benefits are that robots leave comprehensive audit trails, work 24/7 and are consistent. The upshot is that banks will become better at detecting fraud, while bank staff can concentrate on more stimulating and rewarding jobs.

What is more, as banks become increasingly savvy in dealing with data, regulators will demand ever-higher standards in transparency and risk controls. This in turn will require more robotics and AI power. It's a trend we've seen in compliance for years. Ten years ago, banks simply had to show they were screening names to identify terrorism financing or monitoring transactions to detect money laundering; today, they must show how they detect and prevent the hidden tracks and traces to obfuscate financial crime – a significant jump in complexity and sophistication.

But AI's relevance is not limited to financial crime. Across banking, many time-consuming jobs can be automated, freeing up resources for more creative and innovative roles. This is important because as open banking continues to push digital advancement, so the provision of banking services will change.

Until relatively recently, customers had little choice when it came to the service they received from their banks. It was a case of take it or leave it. Today, new providers with very different cultural positions are breaking open the value chain. Tech giants Apple, Google, Amazon, Alibaba and WeChat all see the color of the money and are coming to banking with a customer-centric point of view. They view data analytics as a way of improving customer service, changing customer behavior, even changing customer demands.

If banks are to keep up, they need to innovate – and they should begin by analysing the huge treasure trove of customer data sitting in their systems. This will require placing analytics and Artificial Intelligence at the heart of their business to drive value-added services, revenue growth and increased profits. In FCM this means better understanding customer behavior to identify very small deviations that flag an anomaly and potential crime.

Does this mean the end of traditional banking roles? We don't think so. For banks to navigate the transition successfully, they will need more analysts, business process engineers, programmers, investigators and more customer-facing staff. To help employees understand how robotics and AI can change banking and enhance their roles, banks might consider establishing centres of excellence responsible for education, implementation and support. Remember: whenever technological change has transformed an industry, it has also created great opportunities for expansion.

It's clear that robotics and AI will continue to have an important impact on our working lives. But it's essential to be realistic about the extent of technological change. Robotics can represent existential challenge but that does not need to mean a dystopian future, it's a pragmatic reality that can enhance people's working lives. Let's make sure we all keep that in mind when we read the headlines. Think more Iron Man than rogue Terminator.

Our experts are on hand to help you

Request a call

Call me back