AI & Financial Services: How to Prepare for the Impact on Your Workforce
Idea in brief:
A new report reveals automation could impact financial services jobs by as much as 42%. Here’s how to prepare your workforce for AI’s potential effects.
If you read the first article in this special series on artificial intelligence and the workforce, you know AI has the potential to replace millions of jobs by 2030. That’s from the exhaustive January 2019 report from the Brookings Metropolitan Policy Program.
The Brookings report cautions that AI could create profound implications not just for the U.S. workforce but for society in general. It places a quarter of jobs at elevated risk, another 36% at medium and the rest at low risk.
Finance and insurance jobs face medium to low exposure, but they’re still subject to AI’s impact. Here’s why and how workforce development programs can help you prepare.
Know AI's disruptive upside for financial services
Despite the workforce risks, AI has already disrupted the financial world and changed the game for consumers – in a good way. AI-driven chatbots now answer questions on demand. AI-powered virtual agents provide always-on service. And AI “conversations” help expedite financial transactions for time-pressed consumers.
Personal investors are benefiting, too. Robo advisors are helping manage portfolios. And data-driven tools are building innovative personalized investment products.
According to Autonomous Next’s 2018 Machine Intelligence forecast, banks, insurance companies, and investment management firms that include AI technology investments in their business models could save in excess of $1.0 trillion by 2030.
Imagine the efficiency gains from these real-world examples of AI in financial services:
AI is bolstering Wells Fargo’s business enterprise-wide. At AI World 2018, the financial services multinational discussed the transformative effects of AI on their customer experience, operations and risk management.
AI World 2018 also brought Fannie Mae, which talked about how it’s using automation to improve data reliability and service capabilities. And State Street Bank vouched for AI’s ability to enhance the delivery of financial services. For instance, AI-driven technologies let companies like State Street handle limitless transactions at the same time.
Use training and development for help mitigate the risks
Financial services institutions across the globe are already seeing gains from AI. But what’s the jobs impact of finance automation? This Deloitte report predicts 56% automation potential for such roles as financial administrators. As with other industries at high risk of automation, high-risk financial workers should start looking to learn new skills now.
One option: Learn the skills needed to run financial software. For instance, accounting software that breezes through bookkeeping tasks gives former bookkeepers an opportunity to become software consultants.
Retrain and retain high-risk financial workers
Financial services executives, like those in other industries, worry about how to integrate automation with minimal impact to their workforce. In a recent article in MIT Technology Review Joseph Aoun, president of Northeastern University and author of “Robot Proof: Higher Education in the Age of Artificial Intelligence,” offered this advice:
Keep learning: As AI transforms the workplace, Aoun believes education and training will be a crucial element in employee retention and job satisfaction.
Focus on strengths: Creativity, entrepreneurship, teamwork and the ability to appreciate issues from diverse perspectives are common skill sets. Play to them.
Inspire collaboration: Human nature works against robotic integration. Staffers might detach from the robot and hoard work, decreasing overall efficiency. Help internal teams learn the nuances of working with robots.
In a similar vein, the Brookings report outlines five strategies for supporting workers’ needs for learning and skills development:
- Upskill employees.
- Expand accelerated learning and development.
- Provide tuition assistance.
- Align and expand traditional education.
- Foster uniquely human qualities.
The Brookings report also shows that a little education and training can go a long way toward minimizing vulnerability. In the case of bookkeepers or payroll clerks, for instance, the right bachelor’s degree or certificate program can enhance tech skills and safeguard against job loss. It can also lead to higher wages.
According to the report, “Near-future automation potential will be highest for roles that now pay the lowest wages. Likewise, the average automation potential of occupations requiring a bachelor’s degree runs to just 24%, less than half the 55% task exposure faced by roles requiring less than a bachelor’s degree.”
Bottom line: The better-educated the earner, the lower the automation impact. And the better for the future of financial services all around.
Contact the Workforce Partnerships team at Southern New Hampshire University to learn about our tailored learning solutions.
Betty Egan is a writer and marketing/communication professional. Connect with her on LinkedIn.
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