If you are still waiting for the time when Artificial Intelligence (AI) comes into your life, you have missed that day. What is AI and how it can be spotted around?
AI is a set of technologies that allow computers to perform advanced functions: to see the environment, understand language, analyse data, make recommendations, and more. Examples of AI applications include self-driving cars, robots, automated financial investing, and marketing chatbots. Google Search is also a form of AI.
AI can also write texts. The following text about Cyprus was written by Artificial intelligence, not a human. The text is provided as it was written by a computer without any changes, corrections, or editing:
“Cyprus is a small island country in the Eastern Mediterranean. It has a population of around 1.1 million people. The capital and largest city of the country is Nicosia. Cyprus is an island country with an area of 9,251 square kilometers (3,590 sq mi).
The name Cyprus comes from the Greek word “Kupros”, which means copper. The metal copper was mined on Cyprus for many centuries and it became one of the most important metal resources in ancient times.
The climate in Cyprus is typically Mediterranean with warm, dry summers and cool, wet winters. There are two main seasons: summer which lasts from April to October, and winter which lasts from November to March.”
On one hand, the text is obviously based on existing publications written by humans, on the other hand, the text is well structured and after further developments in the technologies, it will be impossible to distinguish a text written by AI from a text prepared by a human.
AI is incredibly good at data analysis. Like statistical techniques allow drawing conclusions about the full population from analysis of the sample data, AI algorithms can learn from known data examples and apply studied data patterns to new unknown data sets. But AI techniques are much more powerful than statistical approaches. AI algorithms can detect the preconditions of a model’s break or anticipate the probability of a regime switch even in highly non-linear systems.
We are moving to a digital epoch where the economy to a great extent is driven by data. Finance is one of the most data-empowered industries. AI capabilities can be used for the automation of decision-making in finance, including trading, asset allocation, portfolio optimization, risk-taking, etc. In fact, AI revolutionises finance.
The following two paragraphs about the future of finance and its interface with AI were written by Artificial intelligence:
“The future of finance is not about the dominance of humans or AI. It’s about how we can create a symbiotic relationship between both.
We are already seeing this in the form of robo-advisors who use AI to give advice on investments and financial planning. These machines are able to analyze big data, crunch numbers and make recommendations based on the user’s needs. They are also able to provide better customer service through chatbots that answer questions and provide information relevant to the customer’s needs.”
Top-5 predictions on the future of finance made by AI:
- Robotic Portfolio Management
- The Rise of Industry 4.0 and the Demise of Human Labor
- Disruptive Technologies in Banking and Payment Systems
- The Shift Towards Crowdfunding as an Alternative Investment Vehicle
- A More Sustainable Economic System with a New Kind of “New Normal”
What could be concluded from the above? AI might be wrong in details, but without any doubt, the core trend has been revealed correctly: the future of finance is digital.
Also, something AI is not aware, in-depth knowledge and business-ready skills related to both classical and innovative digital finance can be acquired by completing the MSc Financial Services Programme at CIIM.
by Dr Andrey Afanasiev
Associate Professor of Finance and Risk Managemen & the Director of the MSc in Financial Services
Cyprus International Institute of Management – CIIM