Financial and risk advisers have been worrying about the potential impact of robo-advice and Robo-advisers on their practices for over a decade now. Yes, dear reader, according to Wikipedia.org, the first robo-advice platform saw the light of day back in 2010. In the 13-and-a-bit years that have since flashed by, financial advice professionals have witnessed staggering developments in technology, with each innovation increasing the capabilities of robo-advice platforms, and rekindling fears of human advice obsolescence.
AI adoption and / or experimentation
The world’s rapid adoption of and / or experimentation with the artificial intelligence (AI) chatbot, ChatGPT, has raised questions over whether mankind has pushed the technology envelope too far. In a recent development, Elon Musk and a group of like-minded tech billionaires argued for a temporary ban on AI research on the basis it could pose a ‘threat to civilisation’ if allowed to develop without sensible checks and balances. These billionaires have less to worry about than the working class who could soon find their blue- or white-collar jobs ‘gobbled up’ by an AI. PS, as a creative, this writer finds himself near the top of a long and growing list of skills that are easily replicated by AIs. To support this observation, the current thinking is that AI could make up to 85 million jobs redundant globally, by 2025.
The question each of us must grapple with is simple: will AI live up to the ‘rising tide lifts all boats’ aphorism, or will the tide rise so rapidly that only the biggest and most seaworthy vessels manage to stay afloat? There is so much opinion and thought leadership circulating on the topic of AI, and more specifically ChatGPT, that this question is quite difficult to answer. One example is an article by Professor Yudhvir Seetharam, Head of Analytics, Insights and Research at FNB Commercial, penned under the title ‘The benefits, and potential difficulties, of ChatGPT as a business tool’. “ChatGPT has raised awareness of the potential that AI has to add significant value to businesses of all shapes and sizes,” he writes, adding that the ‘tool’ can help businesses and employees to save time and improve efficiencies.
On the flipside, he identifies a handful of limitations in the product, and risks to early adopters. “The information that ChatGPT is able to provide is highly contextual, so while it can quickly identify trends and patterns, it is unlikely to be able to provide the same level of analysis as a human researcher,” writes Seetharam. He suggests that businesses weigh up the benefits of speed and efficiency that the tool offers against the need for accuracy and depth of analysis. This writer agrees with the article’s warning about the broad, generic and non-specific data that ChatGPT delivers at present, but expects both future iterations of this solution and specialised AIs still in development to address such concerns.
Caution required, especially with social media
Businesses that rely on ChatGPT to generate content for their social media marketing initiatives are urged to exercise caution. Seetharam points out that generic content fails to “capture the finer marketing requirements of the business [and] is unlikely to be aligned with a business’s brand or messaging”. It is a sensible warning; but any brand or marketing executive who believes they can fully automate this function are living in the proverbial Cloud Cuckoo Land, for now. The article acknowledges humans are still needed to extract the maximum benefit from today’s AI tools. “It is important to remember that ChatGPT’s insights are only as good as the questions it is being asked; if a business is asking the wrong questions or focusing on the wrong information, the AI may be unable to provide the insights they need,” the Prof writes. In other words, AI is a tool, not a solution.
Global professional services firm, PwC, adopts a similar view in its report titled ‘AI catalysing a workforce revolution, now’. The firm reckons that AI will transform jobs; but that how your business is transformed by this fact remains up to you. “When it comes to the workforce, organisations cannot protect the jobs that are made redundant by technology, but they can protect their people through adaptability and reskilling,” they opine, in a media release to coincide with the report launch. Furthermore, the firm points out that AI has seen exponential growth since 2015 across sub-fields like deep-learning neural networks; machine learning; natural language processing modules: and robotics. And it is no surprise that ChatGPT, which reached one million users just five days after its release, is central to the firm’s research.
AI that generates new and original content
Mark Allderman, PwC Africa Technology-enabled Transformation Lead, offers some more insights into ChatGPT: “Generative AI refers to a type of artificial intelligence that has the ability to generate original and new content, including text, images, music and other forms of media; unlike other AI systems, which are typically designed to recognise patterns and make predictions based on existing data, generative AI operates by creating novel content from scratch”. He adds that the technology is fit for purpose to streamline tasks and increase productivity, though use cases remain dependent on how businesses manage its adoption and uptake.
PwC assures readers that AI-powered robots will transform rather than steal jobs, but this writer is not as confident… Why? When you first use the technology, you will be blown away by its capabilities; and you soon get lost in an internal debate about the powers that will be built into the second, third and fourth iterations of these tools, not to mention AIs that are developed for a specific industry or niche. In the context of the financial services sector, you might consider ‘Four ways AI can benefit the insurance industry’ published by the Insurtech company AgentSync. The article leads with “advancements in technology have given new life to the slow, inefficient processes common in the insurance industry”.
The Insurtech singles out fraud; claims processing; producer onboarding; and client communications as four insurer functions that AI will revolutionise over the coming years. “Technology is already helping us stop fraudulent activity in the insurance industry … AI-powered fraud detection systems can memorise patterns and alert users to suspicious activity,” they write. AI plus big data, faster computer processing speeds and machine learning make it possible for banks and insurers to put millions of hours of call centre and terabytes of email data under the spotlight, in real time, to flag potential threats for further investigation. Many insurers are also experimenting with integrating AI into the claims processing function in recognition of the benefit in faster and more accurate claims settlement at a lower cost to the insurer.
What is this ‘producer onboarding’ you speak of?
The ‘producer onboarding’ term is not that familiar in the South African context. However, AgentSync identifies opportunities for AI to give businesses an edge in the context of hiring becoming increasingly competitive. “Agencies with outdated producer onboarding processes risk losing talent to competitors that can offer a more efficient experience; AI can be a powerful tool in the onboarding process, specifically when it comes to new employee paperwork, IT setup and training,” they write. Fortunately, the client communications edge from AI is more intuitive. “Nowadays, clients communicate via email, video and voice calls, submission forms and even text; AI-operated chat boxes are an easy way for clients to get answers fast [and] online communication makes it easy to send and receive information anytime and just about anywhere,” writes AgentSync.
Will Chat GPT and other AI live up to the ‘boats and rising tide’ aphorism? Given the amount of human input that is required to adopt the technology, the answer is a resounding no. But the writer offers a resounding “yes” in response to whether AI will result in staggering job losses. Granted, these job losses are likely to be a longer-term concern. For now, “while there are valid concerns about the impact of AI on the job market, there are exponential benefits that could positively impact the workforce and the economy,” says Riaan Singh, PwC South Africa Digital Transformation Lead. PwC has started the ‘impact of AI’ journey by listing jobs that will be transformed and / or replaced by AI over time.
No substitute for holistic business approach, yet
“As fantastic as ChatGPT may seem, an AI language model is not (yet) a substitute for a holistic business approach, built on relevant quantitative and qualitative data, and underpinned by deep experience and an integrated approach to understanding markets and customers,” concludes Seetharam. And Allderman takes a similar position. He notes that a movement in a new direction requires informed, strong and resilient leaders. “However, in a fast-moving technology environment, it can be challenging for leaders to shift to a new way of working. coupled with strong leadership, enabling governance of generative AI capabilities and use cases is critical,” he says.
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