Greece has sunk its ship and very soon, the strength of European Union will be put to show. Bankruptcy isn't a phenomenon that surfaces on one fine day. It is a fiasco in the making since long. It is a ship that's built in the yard with no rescue mechanism in sight. The unstinting faith that somehow somewhere, a country will never see bad days because--finances looked robust and logical. But that wasn't the case.
History has been holding a torch to a few truths time and again. Past glory isn't something that can save a country's future unless the country's technology is modern, but its financial sector is as conservative as ever. Patterns of revenue generation, new investments, foreign funds, banking sector and private money lending institutions - all make for a complementary entity before the country's economic policies.
But then, a country's economic policy is largely based on the progress markers, GDP and of course, the data provided by financial institutions about their health.
There have been many instances where financial institutions have overdone themselves over lending and thus leading to some precarious future for countries. In the recent past, for instance, a UK bank executive was made to squirm before television cameras while he was grilled by a band of totally upset parliamentarians over allegations leveled against his organisation. Presumably, those allegations were of high level and heavy corruption. A private bank supported by the state was fined $ 540 million by UK and US authorities for its inter bank interest-rate fixing operation. The employees who were working for the bank from far outside its trading and dealing rules had made it easy for the employees to play around with the technology since it was possible to manually manipulate data.
It is often frauds that expose the most vulnerable part of manual banking, and interpretation of reports leading to bad health of banks. Investigations across the world have revealed loopholes in the system. It was in late 80s that banking sector courted with the application of 'expert system' which in other words would mean--artificial intelligence.
The intent clearly was to apply artificial intelligence, without relying on manual banking systems, to get an early warning on frauds that would have been underway. Now, a decade and half into the new millennium, artificial intelligence seems totally ready to be applied to banking sector. It seems somehow imminent to banking more than any other sector which has a direct impact on the fiscal health of a nation.
Barclays, for instance, has stated in the recent days that it is pursuing technology to explore the possibilities of customers talking to a robot computer system to make simple financial transactions.
Artificial intelligence system could be one of the models that banks may follow to build a system around themselves. Barclays isn't the only one which is all set for a courtship with artificial intelligence system. Many US tech giants have been working on improving their capabilities, expand potential and work models by way of employing artificial intelligence.
While artificial intelligence and the promise of Big Data is a lofty one, with many experiments having yielded contradicting results; banking sector seems all set to harness the potential of AI--or artificial intelligence--where data is the king in terms of decision making, customer interaction and communication as well as reporting.
Banks have always been high on communication and reporting. Owing to this, significant resources have been deployed to report on performance portfolios, client investment strategies, market conditions, fraud and compliance.
Generating such reports, without employing AI has been a process that is time consuming and somewhat a wasted effort in case of human resources, which could be put to better use elsewhere in the sector.
While the future of AI in banking sector seems bright, the scientist fraternity does not seem all excited about the prospects of this. Stephen Hawking famously said: "development of artificial intelligence could spell the doom and end of human race."
Understanding this has to be an effort within the context of banking, big global banks such as UBS are turning towards technology and AI to mine data for insight into customers and help lenders stay competitive in the digital era.
Majority of financial institutions in developed countries have shown great inclination towards AI for reasons that it is economical and precise in terms of both present and future. Mobile phones, and banking through smart phones made easy have provided the much needed boost to their argument.
Opportunities are limitless and boundaries relating to AI are simply not clear. But, in a world where technology advancement and application is the parameter of intelligent development with less risk, AI seems to be the only way ahead for this sector.