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‘Collaboration’ key to seeing full potential of AI

‘Collaboration’ key to seeing full potential of AI

New calls have been issued for the finance industry to change its mindset and embrace “greater collaboration” to leverage the full potential of artificial intelligence and machine learning technology.

Education provider Kaplan Professional and regtech company Red Marker issued the call after noting that the financial advice industry had been looking for automated compliance solutions given that new reforms require financial advisers to be covered by a compliance scheme by 1 January 2020.

However, before an artificial intelligence (AI) or machine learning solution is put in place, the automated solutions are not a panacea for all compliance needs, Kaplan Professional and Red Marker suggested.

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According to the two bodies, financial advisers need to embrace an element of “collaborative” work in order to get the most from automation.

The two companies suggested that expectations need to be managed, as automated solutions “will not be available ‘off-the-shelf’ to replace or meaningfully reduce the amount of supervision required”.

Further, they warned that while significant training data exists, there are limitations. These include files requiring optical character recognition, or the quality of data extraction leading to challenges around natural language processing.

Lastly, the two companies said that the industry seems to be “diverging”, rather than “converging” on standard approaches to statement of advice (SoA) construction, automatic programming language and product comparison logic.

Red Marker CEO Matt Symons elaborated: “The industry has been looking for automated compliance solutions for quite a while now and several vendors are developing them, which is terrific news.

“However, there needs to be a mindset change in how artificial intelligence and machine learning tools can best assist the industry.

“It is important both dealer groups and vendors progress with realistic expectations, particularly around the ‘pre-work’ that needs to be done to ensure financial advice can become an ideal candidate for automated solutions,” he said.

Mr Symons concluded: “If the financial services industry wants to increase the likelihood that effective statement of advice review solutions emerge at a faster rate, then we need to come together and collaborate… working together is going to be key to developing highly reliable, automated review solutions.”

He added that AI and machine learning are best applied where there are standardised inputs.

Likewise, Kaplan Professional CEO Brian Knight also pointed to the code monitoring scheme, which will be mandated by the Financial Adviser Standards and Ethics Authority (FASEA) in the near future.

“With 1 January 2020 on the horizon, it is a suitable time for the industry to look to maximise the assistance of technology,” he said.

“Over the next 12 months, the industry needs to see this as an opportunity to be much clearer and crisper in its documentation and procedures.

“It needs to be down to the level where the industry can utilise these technologies to assist those on the frontline, while training the next generation and retraining existing advisers on their exact obligations,” he said.

Mr Knight said Kaplan Professional will be leveraging its extensive and long-standing relationships with licensees to work towards a solution.

[Related: AI could transform loan servicing: S&P]

‘Collaboration’ key to seeing full potential of AI
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