The Cambridge Centre for Alternative Finance (CCAF) has partnered with the World Economic Forum (WEF) to jointly launch a research project addressing Artificial Intelligence (AI) in financial services.
CCAF is an academic research institute at Cambridge Judge Business School, University of Cambridge, and is the global leader in alternative finance research. The Centre’s publications have become a touchstone for policymakers around the world seeking to encourage Fintech innovation and better understand emerging trends in financial services.
The World Economic Forum is a global non-profit that engages leading political, business, and other stakeholders who shape global, regional and industry agendas. The Forum was established in Switzerland in 1971 to provide an independent perspective on a plethora of issues, most pointedly economic issues.
According to CCAF, the research will incorporate a survey of the applications, evolution, and impact of AI in financial services. The project will query both traditional financial service firms as well as emerging Fintechs. CCAF-WEF will seek to better understand the utilization of AI by applying both empirical quantitative and qualitative data in a global and comparative context.
The data will be used to create a comprehensive report which is expected to be published in the 4th quarter of 2019.
Bryan Zhang, the Executive Director of the CCAF, commented on the announcement of the pending AI research:
“With the increasing application of AI in finance by incumbent banks, Fintechs and Big Techs in recent years, comes a lot of hype and hyperbole which are not underpinned by empirical evidence. The Cambridge Centre for Alternative Finance and the World Economic Forum’s AI in Finance Global Survey aims to bridge that gap in research and collect first-hand empirical data to understand the usage, evolution and impact of artificial intelligence in financial services globally. The resulted report should be able to inform business decision-making as well as regulatory discussions in regard to AI in finance.”
Specifically, the research seeks to accomplish the following:
- Inform business decisions regarding AI development and implementation
- Illustrate the impact of AI in transforming financial service business models
- Analyse the current state of AI application and awareness
- Evaluate future AI-driven trends within the financial services industry
In 2018, the World Economic Forum published The New Physics of Financial Services which reviewed selected use cases and implications of AI across financial service providers. This report cautioned readers that this shift will have “far-reaching consequences for the make-up of financial services, placing legacy business models under pressure from those whose businesses are built around these new attributes.”
AI will inevitably become intertwined into the development of all other technological innovations transforming all aspects of financial services. While AI has garnered a good share of hyperbole, and popular commentary remains “highly sensationalized, creating an excess of both exuberance and fear,” the CCAF-WEF research should help clarify where AI and financial services stand today and what to expect in coming years.
As more processes become automated by tech, financial service firms will need to refocus its human capital to be more effectively distributed.
The transformation of the back office will shift the competitive basis of firms towards the front office, and change the distribution of talent in the industry. The WEF report states “talent will shift from financial institutions to service providers.”
While the opportunity is profound there are few foregone conclusions except for the fact that AI is coming, fast.
CCAF emphasizes that all collected responses from the survey will be fully anonymized and sanitized.
The resulting report will only present aggregate, industry-wide figures and no organization-specific data will be publicized in any way.
As with all of the other CCAF reports, the document should help regulators and other policymakers better manage challenges and questions surrounding AI and financial services.
The AI in Finance Global Survey will be closed on 31st August 2019.
Inquiries about the AI research project may contact Lukas Ryll at [email protected].