You may be up to date with the booming financial technology sector, but for those of you who aren’t FinTech is essentially the incredible industry of emerging companies disrupting traditional financial services. You can read all about it in our recent article, Move Over Robo-Advisors, It’s a Fintech World. And as eye-opening as these apps and tools available to the financial professional are, there’s something even cooler coming at the financial world, AI.
Yes, I’m talking about C3P0 level robots capable of making thoughts and opinions on their own, blurring the line between man and machine. We truly are at a turning point in technology. Cars are driving themselves, wallpaper is able to wirelessly charge your electronic devices, and scientists have developed a cancer detecting smart phone case. Innovation and invention are changing the way we travel, communicate, work and play, and there are no signs of slowing down. But I still think one of the coolest, and slightly eery, developments in modern technology is the advancements in AI.
So what exactly is "A.I"? AI stands for artificial intelligence. Although we all have a little AI capabilities in our phones and Macbooks - Hey Siri - AI goes beyond traditional technological functions, like when a human asks a computer to calculate 4+6. AI is beginning to work a lot like a brain - thinking, and anticipating - to draw from the endless amounts of information available at a moment’s notice. What’s incredible about the possibilities of AI is that these, for lack of a better word, machines, have the ability to evolve and learn from the environment and every interaction in the digital and physical world.
As early as 2011, the general public got a taste of the incredible power that AI has, and was introduced to Watson. Watson was developed by IBM for - get this - Jeopardy. That’s right, some of the brightest minds in the world created this sophisticated technology to compete on a gameshow. But the experiment was groundbreaking all the same. Watson wiped the floor with Jeopardy’s two most successful contestants. Of course it was all for a good cause. I highly recommend watching the clip of the show, it’s not only a glimpse of the technology, but pretty funny too. And if you have a little time, this mini-documentary talks to the developers behind Watson and that now infamous Jeopardy match.
It may seem like a glorified Google, especially with how connected we all are to technology, but let’s just take a step back and allow ourselves to be in awe of what happening in AI. Before 2000, this level of intelligence wasn’t even considered possible to be recreated by machine - to essentially program intelligence. To have a technology so organic that we, humans, don’t even feel the ‘wonder’ anymore is pretty mind-blowing in itself. Just think, for Watson to win at this Jeopardy game, he needed to process what the question was, recall information stored from millions of lines of information, make a decision of whether or not that is in face the correct answer and buzz in, all within mere seconds, if not within a single second. And for anyone who’s watched Westworld, the line between man and machine is becoming increasingly harder to define.
After its initial success, Watson’s developers at IBM began to expand the reach of the technology, opening up the capabilities and scope that Watson could tackle. In February 2013, IBM announced that Watson would take on its first commercial application in the healthcare sector. Watson was integrated to help support management decisions in lung cancer treatment at Memorial Sloan Kettering Cancer Center, New York. Watson was used to guide decisions for treatment and care for patients diagnosed with cancer.
After that, Watson further become a fixture in the healthcare sector in the states. It’s a natural pairing because of Watson’s deductive capabilities and ability to pull information at the drop of a hat. Of course nothing will replace experience or the human element to healthcare, but the combination of AI and human instinct will allow for medical diagnoses to be more precise and efficient.
With Watson becoming more and more available to different industries, it’s no wonder that AI is beginning to creep into financial services. This year you may have seen these ads running on TV - maybe you’ve caught one while you were fastforwarding through your favorite show. If you haven’t, H&R Block’s Super Bowl commercial is pretty convincing that we’re living in the future.
H&R Block partnered with IBM’s Watson to take filing your taxes to the next level. Tax preparation can seem like rocket science when you’re trying to make sure you’re not only filing properly, but getting the most from your return. Now instead of relying on yourself, or your accountant alone, H&R Block is harnessing the power of AI to scour the lines, upon lines, upon lines, of tax deductibles in order to advise you on your taxes.
Will something like Watson be in every office of every financial advisor? Probably not. But in large firms and banks, this model of combined human and artificial intelligence is probably the future. Essentially IBM’s Watson is helping to reduce mistakes from human error. This partnership is, “reinvent[ing] tax preparation,” according to a recent Digital Trends article. “With Watson’s help, combing through the massive amounts of data necessary in tax preparation may be a bit easier. After all, the federal tax code is comprised of more than 74,000 pages and comes with thousands of law changes every year, each of which can affect our own tax incomes.”
“By combining the human expertise, knowledge, and judgment of our tax professionals with the cutting-edge cognitive computing power of Watson, we are creating a future where our clients will benefit from an enhanced experience and our tax pros will have the latest technology to help them ensure every deduction and credit is found,” said Bill Cobb, H&R Block’s president and chief executive officer.
If this foray into the world of taxes proves successful, which there are no indication why it won’t, we may be seeing IBM’s Watson pop up in many more financial services. From stock advising, to financial planning, AI’s potential is limitless.
I look forward to hearing from our readers their opinion on this subject.