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Jobs come, jobs go as digital era transforms workplaces

EVERYONE jokes about, or even fears, the idea of machines replacing humans. We all aren’t out of a job yet, but signs increasingly point to the fact that automation can sometimes do things better and faster than humans, and they can operate 24-7 without coffee breaks, sick leave or holiday time off.

The recent victory of computer program Alpha Go over top Go player Ke Jie confirmed that no one can sit back and ignore the encroachment of artificial intelligence.

The financial services sector is no exception.

Technology has been slowly replacing bank clerks since the first ATM was installed in London in 1967. We all now draw cash without any human help. Half a century later, technology has moved on from that innovation.

In January, Japan’s Fukoku Mutual Life Insurance announced it would lay off 34 employees and replace them with the IBM artificial intelligence system Watson, which can inspect medical records and calculate the amount paid out in policyholder claims.

In March, US investment company Blackrock said it would cut more than 40 jobs and use computerized stock-pickers to run some equity funds.

Both companies cited lower operating costs among the benefits of their actions.

Research and consultancy firm Opimas estimates that about 230,000 jobs in capital markets, or 10 percent of the total, will be lost to machines by 2025. The result, it said, would be a 28 percent improvement in the cost-to-income ratios of financial institutions.

On the plus side for human, 30,000 jobs will be created for technology and data providers to meet the new requirements in the industry.

In China, the development of financial technology started late but is catching up fast.

Ant Financial Services Group, a subsidiary of e-commerce giant Alibaba, last month introduced an automated system to assess car damage by scanning accident-scene images and calculating payouts on insurance claims. No humans are needed for the work.

Two insurance companies have announced they will try out the system, while other large insurers are developing similar technology on their own.

If there it’s consolation to human, most pilot projects to date are tapping the capability of machines largely for assistant roles involving repetitive, high-volume and rule-bound tasks.

Andy Gillard, Asia Pacific digital operation leader at EY, one of the world’s “big four” accounting firms, has looked at the wide-ranging applications of Robotic Process Automation across the securities, banking and insurance sectors.

“We see organizations deploying the technology to improve the customer experience, reduce risk and enable employees to focus on more value-added tasks, as well as achieving cost efficiencies,” said Gillard. “Greater automation will both replace and supplement human work. Jobs that are truly untouched will be the exception rather than the norm.”

Ant Financial’s car damage assessment system builds upon the second level of artificial intelligence called “machine learning.” That requires using vast amounts of data to “train” a system and fine-tune it.

Ant Financial hails the system’s capability as equivalent to senior investigators with 10 years’ experience, but questions remain. Does the system have sufficiently large enough data to ensure the accuracy of the assessments? Are photos of a traffic accident enough to reveal implicit damages?

Quick to clarify the situation, Ant Financial said the application of a basic level of artificial intelligence is not intended to replace investigators, but rather to liberate the labor force for more valuable work, like assessing the internal damage of cars and serving customers.

The implicit message: investigators must adapt to survive.

Machine intelligence may currently be immature, but that’s no reason to be complacent. No one is able to predict when artificial intelligence, in more advanced stages, will be able to mimic the human brain and make deductions from a sea of data.

The rapid development of technology may hit before you know it.

“Automation eliminating work is not a new phenomenon, but what is different is the speed and scale at which automation is increasingly possible,” said EY’s Gillard. “With artificial intelligence increasingly used in conjunction with robotic technologies, the nature of work involving human judgment, rather than just rules-based tasks, will also be affected.”

Nick Pollard, managing director of CFA Institute Asia Pacific, urges adaptation as a human defense.

The institute is working on big data and fintech, consolidating information from technology companies and practitioners to outline the latest developments.

“If people’s roles become more machine-based, we will have to teach them how those machines work and how to use the output from the machines to do their jobs,” Pollard said. “We want to be the ones who always stay ahead of machines.”

Pollard said there are certain jobs in the financial services sector that can be performed only by a human.

“Many people tell me that this is the end of personal financial advice, and I don’t agree,” he said. “Successful companies are those which embrace technology and improve efficiency in terms of analyzing data, but communication and interpretation of that data still need to involve human interaction between an organization and its clients.”

Eventually, it’s the human element that may be most crucial in attracting and retaining clients, especially those who place value on personal service.

“As an industry, we may be focusing too much attention on the technical side of a job, forgetting the human aspects and benefits,” Pollard said. “It means you should not only be talking to customers about products relevant and suitable for them, but you also need transparency in the way you operate.”


 

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