Technological evolution has had a radical effect on humanity and continues to do so. As the human-machine intervention increases, machines will develop an innate ability to think and perceive. Artificial Intelligence (AI) is thus the new era of progression we are stepping into. Take for example the popular social networking site, Facebook. In December 2010, Facebook launched a new feature called “photo tagging”. According to Facebook, this feature intends to make photo tagging, which is otherwise quite a mundane activity, much simpler. Facebook uses AI/face recognition software to identify faces from the photos being uploaded and provides suggestive tags based on what has already been tagged by you.

Google is another technology savvy company dabbling in AI. Its “auto complete” feature is a simple yet impressive example. Google’s ability to understand what you are looking for when you start typing a query and to suggest possible terms/phrases is just amazing. The company recently announced that one of its more difficult projects involves translating “poetry”. This ambitious AI project of theirs is far from reality but they are certainly making good progress. According to the researchers at Google, translating text is easy, but translating poetry is akin to tight-rope walking since you need to hit the right meter and rhyme so you don’t lose the feel and essence of a poem.

In the banking world, AI has been used to detect fraud and investing in stock trading. KPMG claims that every year anywhere between $590 billion to 1.5 trillion is laundered globally. AI helps banks fight this crime by looking for unusual patterns. According to a study, more than 30% of the stocks traded in the USA were driven by automatic algorithms. Many mutual funds make their investment decision based on the recommendations made by these AI tools. It is also reported that mutual funds which used these tools outperformed their benchmarks.

While artificial intelligence and technology opens up a world of possibilities for most industries, there is a long way to go before we can entirely rely on it. In my next blog post, I’d like to discuss the role on AI in wholesale banking and the complexities that currently exist. Stay tuned.