Why do we even need Artificial Intelligence (AI)?

We live in a fascinating time, witnessing a significant shift in the balance of power between human and machine intelligence. This shift was notably predicted by computer scientist Hans Moravec, who observed that computers can easily perform tasks that are difficult for humans, like complex mathematical calculations, but struggle with tasks that come naturally to us, such as recognising faces or walking across a room.

The argument, popularly known as Movarec’s paradox, is the reason why we need AI. We need AI to minimise (or eliminate) tasks we don’t like so we can do more of what we like. 

At its core, AI is a tool, like the wheel or the printing press, that can be integrated into virtually any field, including finance. For decades, the financial industry has been overwhelmed with data, which, without the right tools, is merely a collection of numbers lacking context. AI acts as a catalyst, transforming this raw data into actionable insights by recognising patterns, predicting trends, and automating routine tasks. This enables financial professionals to move beyond mundane tasks and concentrate on strategic thinking and problem-solving.

Take fraud detection, for instance. On a large scale, AI-powered systems are already saving banks billions by analyzing millions of transactions in seconds to spot anomalies that would take humans much longer to identify. On a smaller scale, AI assists businesses in detecting internal fraud by matching transaction data with receipt information. With AI, finance leaders can also delegate repetitive, error-prone tasks such as receipt data extraction and matching.

Numerous companies, especially in the fintech sector, are leveraging AI to mitigate risk and reduce costs. A notable example is JPMorgan Chase, a leading global financial institution.

‍According to the company website, J.P. Morgan has leveraged AI-powered large language models for over two years to enhance payment validation screening. These models significantly expedite processing by reducing false positives and improving queue management. As a result, the bank has experienced lower levels of fraud and enhanced the customer experience, achieving a 15-20% reduction in account validation rejection rates.

In addition to J.P. Morgan, renowned companies like Amazon, Tesla, and IBM use AI to improve customer experiences. For example, Amazon uses AI extensively for personalised recommendations and inventory management. Tesla uses AI for its self-driving technology, developing and improving autonomous vehicle capabilities. IBM provides businesses with AI tools for data analysis, customer service automation, and decision support systems. 

AI is no longer a concept of the distant future—it is here and now. Though we are just at the beginning, this journey with AI promises to be transformative. Like any tool, AI can be used or ignored, but choosing to work with it grants us a significant advantage. As we continue to embrace AI, we unlock new possibilities that enhance our personal and professional lives.