As far back as 1990, financial experts were predicting that in the not too distant future, investment and money management would be aided by sophisticated computer technologies. Flash forward a couple of decades, and that future is here.
Robotics experts predict that by 2025, robots and other kinds of “smart” digital technology will have achieved processing power equal to that of the human brain: an achievement of true artificial intelligence that promises to change our world in countless ways. Among them: investing, financial services and the global money markets.
The use of automated technologies in banking and finance isn’t new, of course; ATMs, so common now that we don’t even remember what the letters stand for, complex spreadsheet and asset management software, and even ebanking have been around for so long that these technologies are simply a part of everyday financial management for everyone from individuals to big corporations.
But true artificial intelligence takes those functions much farther, with the promise of making financial dealings of all kinds faster, cheaper and more accurate – as well as more user friendly. But experts warn that there are downsides to the onrush of AI technology, too.
What is artificial intelligence? It’s computing technology that’s several generations removed from simple automation. AI refers to the ability of a computer to understand questions, provide answers and offer options based on available information. With rapid advances in computing speed, AIs can sort information, make decisions based on branching options, and handle complex sequences o tasks in the same ay every time, removing the risk of human error.
The power of this kind of “smart” computer was once a novelty, trotted out to amuse and astound people with feats like beating a chess master at his game, writing poetry or predicting the future. But behind the scenes, supercomputers have been directing missiles, assisting in surgeries and medical research – and even acting as monitors and companions for the elderly.
Now, advances in artificial intelligence and other digital technologies affect just about every aspect of human life. Robots routinely assist nurses in hospitals. Artificial animals have been developed to move just like living ones, capable of traveling where humans can never go. AIs enable space probes to land on comets and visit Pluto.
These technologies also help to move money all around the globe. From the early days of ATMS and electronic transfers, financial experts now envision a world in which virtual financial advisors help with investment management and conduct transactions. Digital currencies can be kept and tracked in virtual “wallets” for transactions conducted at any hour, from anywhere.
AI technology will help investors calculate risk, make adjustments based on current conditions, and evaluate new opportunities. On the real estate front, these technologies let potential homebuyers take virtual tours of properties they’re interested in, “decorate’ them at the click of a mouse, and complete the purchase all in one interface.
It’s obvious that in a world where AIs are assuming more and more tasks normally carried out by people, some jobs filled by people would no longer be heeded. In this brave new world, financial planners, investment advisers, real estate agents and a variety of other professions would disappear.
Losing human jobs to technology is only one of the risks of runaway AI technology that worry many economists and market watchers. A world increasingly reliant on AI technology could be crushed if those systems were hacked or if they failed. And the increasing use of AI technology for military and defense purposes raises the specter of a global disaster arising from a system failure or other glitch.
Still, the shadow side of the advancing wave of AI technology is, as Jason Hartman points out, more of an opportunity, rich with benefits, than a threat. AI applications have the potential to revolutionize the way we do business and live our lives. And if you own a smartphone, use a GPS or boost your fitness regimen with a Fitbit, you know the AI revolution is already underway. (Top image: Flickr/ju-x)
Read more from The American Monetary Association:
The American Monetary Association Team