AI Trends editor note: Published last April, this CTO Corner does a nice job of explorin both the potential for AI to transform the financial services industry and challenges it presents. Other financial services articles cited in AI Trends shows some of the new products, services and other adoption that has taken place since last year.
Surging Interest in AI
Since its inception, AI has experienced at least two major hype cycles with resulting winters of disillusionment. Back in the early 1980’s when I joined Citibank’s Investment Bank to help build expert systems, a branch of AI that emulates the decision-making ability of a human expert, many other Wall Street firms set up similar projects during that era. Although I and others deployed a number of successful applications, by the 1990’s, AI went into its second winter of disillusionment as realization set in that these systems were harder and more costly to build and maintain than first anticipated.
AI appears to be entering a new phase where interest is surging again. An example of this is the sharp increase in the commercial use of AI, also known as machine intelligence, such as IBM’s Watson. As another indicator, the vast majority of respondents to the 2014 Future of the Internet study anticipate that robotics and machine intelligence will permeate wide segments of daily life by 2025 with huge implications for a range of industries. Will the latest surge of AI applications in the financial services fall short again or will they this time truly transform the financial services industry?