Artificial intelligence and finance: The AI advantage
R. David Edelman, Director, Massachusetts Institute of Technology
Internet Policy Research Institute
GRAPHIC: [Greater efficiency.]
We all hopefully have a personal relationship with the folks that are advising us in the financial space and elsewhere, and sometimes that is exactly what we need. We want someone who understands our specific needs and our specific concerns, and can do long-term planning on our behalf. We want our interactions every day with our banks and other financial service entities to be more efficient. We want it to happen more quickly. We want to spend less time on hold and we want it to anticipate all of our needs. AI can play a huge role in diminishing, not just the time that you spend waiting on hold, but also getting you to the right person more quickly. It can really improve your outcomes in ways that ultimately help financial service entities bring down costs.
The risk is over-optimization and too much automation. The real challenge that companies in consumer finance and service have is finding that balance between AI-driven efficiency and cost savings. The human touch is still essential, not just for consumer interaction, but to be able to deliver on what people need in the financial service space and beyond.
GRAPHIC: [Greater responsibility.]
Trust is fundamentally the bedrock of our financial system. The truth is much of what we do every day is based on trust. How many of us have ever gone to the bank and asked to see that the currency that we’ve deposited is right there in the vault? We have a tremendous amount of faith that these systems are not only doing math right, but that they’re ultimately secure and reliable.
It’s a wonderful thing in terms of liberating people from the tyranny of balancing their checkbook. But at the same time, there’s a burden on financial service institutions to make sure that those systems are immutably audited, completely accurate and available when consumers want them. That’s the difference between a regular day at the office and a run on the banks.
GRAPHIC: [Charles Schwab Own your tomorrow.]